SWOT Analysis: What is It, How to Use It to Charge Up Your Business
Mamie Patton
Brand Strategist, Writer, Speaker | Helping B2Bs Win by Activating the Full Power of Their Brands |Transforming Couch Potato Brands into Power Brands
A SWOT analysis is a valuable, often underutilized tool that can help your business seize opportunities and manage risks. Learn what it can do and how to conduct one in this article.
Do you lie awake at night wondering if you are proactively managing your business risks as well as you could be?
Do you have a dedicated team, but you are not sure they are focusing on the right priorities?
Does your value proposition have all the impact of a soggy french fry?
If any of these questions resonate, you may be in need of a SWOT analysis.
What is a SWOT Analysis?
A SWOT (Strengths, Weaknesses, Opportunities, Growth) analysis is a tool to help you build effective business plans. Use it to benchmark where your business stands presently (internal strengths and weaknesses) and identify strategies that support sound growth (external opportunities and threats).
Why is a SWOT Analysis Important for Your Business?
"All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved." - Sun Tzu
SWOTs are an important part of business planning and management. By giving yourself and your team a frank reading on your business, you establish a common perspective. You can then pull together to create goals and objectives that are in alignment across all departments.
A SWOT analysis informs your business planning with:
All of which empowers you to capitalize on your company’s strengths and opportunities while proactively managing risk from weaknesses and threats.
How I Use the SWOT Process to Help My Clients Succeed
SWOTs can range from a topline exercise to weeks or even months-long projects. As a SWOT guide and brand strategy consultant, I focus on helping small and medium B2Bs conduct SWOTs for specific needs, with an emphasis on delivering practical, actionable results. A new startup company doesn’t normally need a deep dive, but they do need a realistic overview of their situation compared to their competitors and other marketplace forces. On the other hand, an established brand in need of some serious long-term planning likely needs a thorough SWOT review – especially in times of upheaval. That’s why I provide a customized approach to each client.
I’m going to share with you the process that I use in partnership with my clients. It works for organizations of all sizes because it is easily customized for each situation. This is the tool that has helped my clients make smarter business decisions, sharpen their brand positions, gain internal alignment, improve processes, and save tens of thousands of dollars by making smarter decisions – or avoid making the wrong ones.
In the following Information, I’ll walk you through each of the steps in the three phases shown below.
Clients often discover that the SWOT analysis doesn’t necessarily reveal new things they weren’t aware of;?rather, it pulls back the curtain and shines light on concerns that don’t get attention in the day-to-day marathon of running the business. It helps them prioritize and focus on the most important issues. It draws connections between the four categories of strengths, weaknesses, opportunities, and threats that had not previously been considered.
The Five Step Process to Conduct Your Own SWOT Analysis
1. Purpose
The first thing I ask any client who wants a SWOT is why they need it, as this will indicate not only their motivations, but also the level of analysis needed. It’s not unusual for me to be consulting with them on branding strategy and to recommend a SWOT based on what I learn in discovery.
One client came to me for help to re-energize their brand. They had enjoyed great success for years, and over time that success was taken for granted as something deserved rather than earned. The general mindset was a “we’ve always done it this way and it’s worked” attitude. They were the industry leader by a comfortable margin, but now innovative competitors were exploiting their weaknesses and nibbling away at market share. To re-energize the brand and take a first step to shake up the “we’ve always done it this way” mentality, we gathered key executives and managers to conduct a SWOT analysis. It forced everyone to acknowledge previously ignored external threats and opportunities, and to focus together on core weaknesses as well as their strengths. After much discussion, we identified key issues and prioritized strategies to address them. This gave them a robust tool to develop a forward-thinking business plan. Having an objective platform in place prevented the tendency for each department to create their own agenda based on personal beliefs or biases. It pushed them out of their “think like we always have” comfort zone.
Another client was launching a new business and needed a basic SWOT analysis as a risk management tool. It’s tempting to underestimate competitors or other threats in the excitement of launching your own business. The exercise gave them a realistic assessment of what they would be up against in the external environment. By focusing their efforts on serving with their strengths and managing the risks, they operated with greater confidence and their business thrived.
2. Participants
Once you have defined your reasons for conducting a SWOT, the next step is to decide who should participate. It might be just the top few executives for a quick topline, or if it’s a deep dive, it might require multiple teams. Mid-sized businesses often benefit from having separate executive, manager, and employee sessions. This ensures you are getting perspectives from throughout the organization. It helps people at all levels feel included and wins their engagement and willingness to help make changes that result from the analysis.
Critical keys to success
3. Session Structure, Agenda and Environment
The right setup for the exploration sessions makes all the difference. Generally, SWOT sessions run 4 to 6 hours – less if it’s a small group for a brief topline, more if it’s a larger group in a deep dive. You’ll be surprised at how quickly time flies when your group is fully engaged. You may want to break it into two sessions, tackling internal Strengths and Weaknesses on day one and then external Threats and Opportunities on day two. This gives people the benefit of processing information between the two sessions, and they often come back with additional ideas.
Build your agenda to include a few minutes of introduction/warm up time at the beginning, and team conclusions and strategy recommendations at the end of the meeting. Build in breaks as needed. Make sure you also leave time for a final summarization and thank you.
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The environment is critical. Make sure people know they are expected to devote their full attention – I ask people to turn all devices off (scheduled breaks allow people to check emails, texts, etc.). Provide a comfortable, informal but professional room with plenty of wall space for sticky notes, a giant sticky pad, markers, and easel for the moderator, plus snacks and beverages to keep energy high. Make sure the room temperature is not too warm. But don’t freeze them out, either! I once was moderating a session in a room that was notorious for its Arctic qualities, so we made sure participants were asked to bring a jacket or sweater, and I even provided a few shawls and blankets for those who were extra prone to chills. By showing such consideration, it helped people feel at ease and safe – and gave us all something to laugh about.
Critical keys to success
4. Exploration
Your participants understand what the SWOT is for and how it will work, because you’ve prepared them with great communications. They’ve received the agenda well ahead of time and they are excited to participate. All that helps you kick things off to a strong start. Your meeting leader or moderator should set a tone of positive energy. I like to begin the session with a quick recap of why we are meeting, and introductions. Then I move right into a strengths discussion, followed by weaknesses. (Generally, the internal categories generate more input than external ones, so it’s an effective way to get momentum.)
Depending on the group, I will either ask for input and write it on a giant sticky pad, or I will ask each person to write their own category thoughts on small sticky notes and put them on the wall. Either way, collect the thoughts for a category, discuss their meaning and then vote to get consensus on ranking – the most important issue is number 1, and so on. Listen closely to language – often multiple people will state the same issue differently, and that can provide unexpected insights. Invite questions and encourage discussion, but keep an eye on the clock to avoid getting sidetracked. Establish an area on the wall for parking lot sticky notes – issues or ideas that are important and should be followed up separately, but are not directly relevant to the SWOT topics.
Once the strengths, weaknesses, opportunities, and threats have been discussed and ranked, move on to the Four Connecting Questions:
Brainstorming answers to these questions can reveal valuable ideas and strategies to incorporate into your overall business planning.
As a session moderator, I try to manage those who naturally tend to dominate a meeting, and draw out the quieter participants with open ended questions. Encourage frank discussion but be sure it is respectful and not personal. If your group includes a mix of top management executives and mid-level managers and employees, make sure the senior leaders listen more than they talk, and ask questions without making people feel fearful or defensive. I normally encourage separate groups for each level. This makes people more comfortable to speak freely, and executive level leaders can openly discuss more confidential, C-level issues among themselves.
Wrap up the meeting by summarizing what you’ve all accomplished together – the issues, insights, and ideas. Explain what will happen next – either at the next meeting, or when they can expect to see the final SWOT report that they have helped create. Thank everyone for their contributions. Participants should leave feeling good that they have helped contribute to building the future of the company. Down the road, they’ll be more inclined to be frontline cheerleaders for resulting changes.
Critical keys to success
5. Analysis and Reporting
A successful session will generate a healthy list of insights, ideas, and issues. If you have retained a professional moderator, a significant part of their responsibilities is to deliver a quality analysis report to use in your business planning. If you are doing it in-house, plan on a substantial chunk of time to review all notes and recommendations, and create the final analysis and recommendations.
The report should include the following:
Sometimes two versions of the report will be generated. One version is for general distribution to all participants, so they can see the results of their work and know that it’s being acted on. A second version is for top executives only, containing more sensitive information that is not appropriate for all eyes.
Follow Up Plan
Your new SWOT analysis is invaluable, but only if you use it to achieve your business goals. For each strategy, work with your management team to define specific actions to achieve the objective. Make sure your departmental managers know they are expected to integrate the SWOT strategies into their own plans and processes.
One client I worked with went so far as to use a simple scorecard for each strategic objective. They had identified a great opportunity to improve product design and innovation, but it required new processes across multiple departments. At each monthly management meeting, department leaders reported progress on their specific part of the strategy. A year later, they had vastly shortened product development time and introduced new quality improvements. Customers went from complaining about the continued failure to address known problems to enthusiasm about the company’s updated products. Sales soared.
Critical keys to success
The Bottom Line
Done well, a SWOT analysis is worth the investment many times over. It can help you improve resource utilization and business processes. It can guide you to identify and capitalize on new opportunities. Critically, it empowers you to manage risk appropriately. And it brings your team together, because when employees are involved, they have skin in the game. When they understand the strategies that are underpinning the business plan, they’ll help advance change rather than resist it.
Consider a Guide to Navigate the Process
If you want a SWOT analysis but don’t have time or expertise to do it yourself, let’s talk. There are significant advantages to having an objective, experienced leader at the helm, especially to moderate your exploratory sessions and produce the follow up analysis and recommendations. As mentioned previously, the analysis often brings up known concerns that could be ignored on a daily basis, but over time will affect performance. A outside resource brings in untainted eyes and ears to help you focus on issues with fresh perspectives.
Questions? Want to talk further? Contact me and I'll reply promptly.
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Free SWOT Analysis Guide
A SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis is used for brand strategy development and general business planning. If you've ever felt like there are nagging issues or opportunities that aren't being addressed in the day-to-day business of managing your company, a SWOT analysis could help your team to pause and focus on what's important. This is a meaty guide with explanations, checklists and templates. Use it to conduct discovery and brainstorming sessions with your team. Download it here.