Management - Learn How to Manage with Insight & Vision

Chapter 1: Management

Goal: Learn to Manage with Insight and Vision

Take Stock: Conduct a SWOT Analysis

Are you familiar with the concept of SWOT analysis? This is a great offensive and defensive study and activity.

Large corporations and progressive small businesses (such as PRO, President’s members) use SWOT—an acronym for Strengths, Weaknesses, Opportunities, and Threats—as a strategic planning tool. But SWOT can benefit smaller firms, too. Because unlike financial statements, SWOT won’t just tell you where you’ve been.

It can tell you why. And what can help you go further.

SWOT is part internal review (i.e., your corporate strengths and weaknesses) and part external analysis (i.e., market opportunities and threats). It doesn’t have to be an elaborate process, but it should be a thoughtful and honest one. Don’t go it alone; if you have key employees, ask them for input, too. Please note: your strengths can also be your weaknesses, such as a business concentration with a single prestige account. Here’s what you accomplish when you conduct SWOT analysis.

Identify Your Company’s Strengths

Pinpoint the things that your company does well, the company’s strengths. For example, perhaps you have a strong sales force, or you’ve developed a unique niche, or have a key account that is significant in your industry.

Often, your strengths are qualities that differentiate you from your competition, the ones that prompt customers to buy from you and stay with you, such as your brand acceptance. Whatever your strengths are, obviously you want to build on them.

Be aware, however, that your strengths also create vulnerability for you. Say your key strength is your high-powered sales force. Your competition may eventually recognize this and attempt to lure your people away.

Once you identify your strengths, develop an action plan for protecting them—in this case by, say, sweetening compensation or diversifying your sales force. Your goal in identifying your strengths is to leverage them—to take advantage of them.

Your people may also be one of your strengths. You want to emphasize and work with their individual strengths.

Acknowledge Your Company’s Weaknesses

While you’re undoubtedly aware of your weaknesses, face them head-on. If you lost accounts recently, why? If you didn’t get the new business you sought, why? Do your products need updating?

Is your workflow inefficient? Are you engaging in workarounds instead of fixing a core problem? If so, address it now.

Perhaps there are weaknesses in the way you run your business. For example, if much of your business is structured around one huge account, you may have too many eggs in one basket. Should you lose that account, could you survive? Invest in developing secondary accounts.

One difficult weakness activity is to conduct a review of your employees. You must identify those who need additional training—and harder yet—those that require you to make a change.

You may have to grade weaknesses from extreme to minor and the impact on your business. Obviously the initial activity is to remedy your extreme weaknesses. But keep in mind that you’ll get greater results from leveraging strengths than investing in fixing minor weaknesses.

Target Your Potential Opportunities

While strengths and weaknesses are internal in nature, opportunities come from the outside world. Take a good look around: where do you think your market is headed, and how can you get there before your competition? Buying trends…pending legislation…evolving technologies…do any of these offer potential growth opportunities?

Opportunities exist in every market and economy, but you need vision to spot them. So read books. Talk to your customers. Attend community business events. Keep your eyes and your mind open. A responsibility of leadership is to predict. Therefore, you must get out in the world to gather information—another reason peer board participants’ businesses do better.

Learn ‘Hands On’ Experience with a PRO Board - Identify the Biggest Threats to Your Business

What are you most afraid of? Does your competition have something you don’t, say better pricing or a superior product? Are market conditions creating new challenges for you?

Instead of obsessing about the dangers that threaten your business, brainstorm strategies to overcome them. When the going gets tough, the tough gets going. It’s only in facing your threats that you can diffuse them of their power to hurt you.

Earlier, I mentioned that you should involve your employees in SWOT analysis. For one thing, you may learn some surprising and helpful insights this way. For another, conducting group SWOT analysis can build unity within an organization and a shared sense of renewed purpose. Make sure your team is one of your strengths.

Crunching numbers is important and necessary, but understanding the forces behind those numbers can be even more powerful, especially when it comes to positioning yourself for what lies ahead.

Sometimes contingency plans may need to be made for an external action you expect will impact your business. A useful contingency planning tool is the creation of “book ends.” A “book end” is where you determine that if a certain action occurs, you will take a certain pre-determined action.

For example, a sales decline—if sales hit a certain level; it will trigger the action you’ve already identified. Small Businesses have a tendency to wait too long to take action.