It’s a SWOT Analysis, not Competitive Intelligence. What we mean by this that SWOT Analysis is just one tool within Competitive Intelligence. It’s not the only tool.
The SWOT analysis can be a relatively dry (but essential) part of a strategic process. However, there is a danger that SWOT is given just lip service, which ends up lowering the exercise’s validity. SWOT is a useful tool, but it’s nearly always done wrong.
Quick and dirty
It’s a great quick and dirty tool. That gets a group of people at least thinking about their competitive position. It has design flaws that usually makes it a useless exercise. And also potentially harmful.
Remember SWOT Analysis looks at an organisation’s current situation. It’s challenging to make SWOT look to the future. Businesses should already know where they now. And in our experience analysis is always done without any actual Competitive Intelligence.
So we end up trying to predict the future based on your current landscape. Without actually looking at future trends, the disruptive technologies and future-looking competitor intelligence profiles. Insight derived from managers experience. And anecdotal snippets from what Georgina was told by the sales manager who got it from his client Mike in the pub. (Remember them!)
Vague internal opinions
Managers end up looking at their strengths and weaknesses. Predicting the future based on vague internal opinions. And then go ahead and make important decisions from this exercise. Before starting any SWOT analysis, it’s important to understand the competitive landscape. It’s not the job of SWOT to do this. It would be best doing this beforehand. And arguably all the time. An ongoing process, frequently updated.
Before taking a pen out to write “Strengths” on the whiteboard, look at the competitive landscape. In terms of strategic trends and expert forecasts. Systems, products and services on offer, future technology changes. Understand what the implications will have on a business. And then build possible future scenarios.
Trends can be looked at and analysed by using the STEEP Trend Analysis tool. Analyse and discuss which Social, Technological, Economic, Ecological, and Political trends could impact the mid-term future. On top of this, you need up to date and accurate Competitor Intelligence profiles. Understand what they are up to and what they are going to do. Not what they have done.
Look at what’s happening within the macroeconomic environment. Build market assessments of the areas they currently work in and want to expand into.
Now they have all this Intelligence by their side. How can they make SWOT analysis work for them? If they follow the following seven steps, and they will create a more helpful and living document.
SWOT analysis is usually done internally, and it comes with some self-criticism. You have to point out what you like and dislike about the company. Political infighting risk is very much a possibility. And some people are likely to pull back from their thoughts and soften the real weakness. As a result, Strength and weaknesses are packed with inaccurate, vanilla information. So make it a No Spin Zone. Get people to agree upfront to speak the truth. Or use an external resource like Octopus to run the exercise or do the project. Only by being candid can a SWOT have any real value.
Recognise there are two distinct parts. The SW part of SWOT is like looking through a microscope at the organisation itself. The OT part of SWOT is looking through a telescope at the outside world. Make sure people think in these terms when doing the brainstorming.
Don’t settle for the obvious
Do not settle for the obvious – In listing any part of the SWOT, it is tempting just to put down what we already know. That limits creativity. Instead, brainstorm the dozen or so obvious things, then bear down and triple the length of the list (at least). By stretching for more items, you will generate some far-out and beneficial inputs. Inputs that can enrich the SWOT.
Break into groups. Rather than having the entire team do the full SWOT brainstorm, set out four tables. And work in small teams to generate the information. If you wish, have the teams rotate to different tables to view the other groups’ work and add to it.
Cognitive bias within the strategic analysis is prevalent. Even the best of them can be affected by Cognitive bias. That’s why government Intelligence Agencies have tools to isolate and manage cognitive biases. These biases are not great for SWOT. Especially the forward-looking sections of SWOT. The risks and opportunities risk flawed ill-judged thinking. Biased hierarchies and rosy views of the past. The “never happened before” and “not invented here” attitudes. To reduce this risk, find an independent person. And during the exercise, their sole purpose is to highlight and note down cognitive bias.
Clearly document the SWOT along with any required actions. Do not hide the finished work. Use it to create the strategy, and then use the items to track progress. A SWOT should be considered a living document with items changing all the time. Don’t think of it as a clay tablet for the archives.
Have some fun. If you really want people to get creative, combine the SWOT with fun activities. So the work seems satisfying and playful rather than a tedious chore that must be done.
A useful SWOT Analysis will result in the process of generating actionable strategy. And remember, it’s a SWOT Analysis, not Competitive Intelligence. SWOT Analysis is just one tool within Competitive Intelligence. Not the only tool.