How many times have you participated in a SWOT analysis only to set it aside and not use it again? How may SWOT exercises miss big issues? Why is that? What are we missing? What would we be able to do if we had a robust SWOT and knew how to use it?
Let’s start out with an explicit definition of landscape. Landscape is the environment relevant to an organization’s vision mission and values. The key word in the previous sentence is relevant. Landscape can favor or challenge the organization. Sometimes the same landscape element is potentially both a challenge and an advantage. As an example, having the production capacity of a large asset base can be an advantage when demand is high and a challenge when demand is low.
Landscape is made up of individual elements. An element is just a part of the landscape. An element can be broad or granular depending on how it is defined. In a SWOT exercise, the strengths, weaknesses, opportunities and threats are all landscape elements.
Landscape can be either internal or external to the organization. Internal landscape is what is found inside the organization and generally under control of the organization. Internal landscape features include technology, talent, facilities, intellectual property, and financial resources. External landscape is the environment outside the organization. External landscape elements include customers, financial markets, the economy, and competitors.
SWOT is a way to rationalize the landscape. It is a way to bring order to the chaos around us. There are more complex ways to capture landscape than just SWOT, but the concepts we are discussing can be comprehended without complexity.
The role of a landscape analysis such as SWOT is to confront reality. Any planning process needs to be grounded in reality to have a chance at execution. Building off our opening question, what did you do with your SWOT we can see times when the landscape exercise becomes detached from the planning process. When this dissociation occurs, the likelihood of delivering target outcomes decreases. Risk increases.
So how do we do this? Developing a shared understanding of the landscape prior to developing a strategy is like looking at a map prior to starting a backpacking trip. Like any good map, ours need to decide on a scale of proportion. Putting features with different scale on a map leads to confusion and frustration for hikers. The same is true of SWOT analysis. If we have very big issues right next to relatively inconsequential issues decision-making could be corrupted.
Preparing a SWOT with proportionally similar landscape elements in the early stages of strategy development provides a map for the team to follow. The SWOT has several requirements to be helpful. It needs be grounded in the reality of the organization. The vision, mission and values need to define its context. The work needs to be thorough. Being thorough means that all perspectives are considered in developing the SWOT. The role of different functions and experiences in preparing a SWOT is to reduce blind spots.
Let’s say we have a good quality SWOT, then what? We now have a map we can use to define initiatives. The SWOT should indicate where core capabilities are not performing at a level required to reach our three to five year goals. Opportunities in the market and threats from competitors will be clear. This grounding becomes the template for enterprise strategy.
Strategically we want to do several things. We want to leverage strengths, we want to address weaknesses, we want to seize opportunities, and we want to mitigate threats.
The criteria for determining which SWOT elements get focus can be determined before the SWOT is conducted. When the SWOT is completed the team can apply the criteria and decide where the focus will be. That does not mean we do not do the rest of the work.
How many SWOT exercises are conducted as a pro forma exercise resulting in a list but no action? How many times is SWOT conducted after the strategy is finished? Does that make sense? Why would we not consult the map before planning the journey?
Any view of the landscape must be kept current. As the team moves forward we may find there are SWOT elements that were missed. Some may be more significant. Some may be less significant. Keeping track of the landscape during execution helps keep the team focused on the right things. A SWOT needs to be refreshed to be helpful, just like any map for any journey.
How are you keeping track of your organization’s landscape? Are you developing your map before you plan your journey? Executives who make ongoing landscape analysis part of their planning process will find their journey much smoother.
© 2016 Differentiating Strategies, LLC