Completing a SWOT analysis

Question

I've been asked to complete a SWOT analysis covering my small R&D group with reference to an enterprise wide project combining R&D groups from across the organisation. One section has already completed this analysis and we are asked to add any additional entries and also comment on how the entries already stated apply to our group.

I am not a manager as such and haven't done a SWOT analysis before. I really get the feeling that we are going through this process because someone read in a management book that it's a good thing to do, rather than because it will be particularly useful in this case (I'm not suggesting the whole technique is worthless, just the way this is being applied in this case).

In any case, I've read up a bit on the meanings of the 4 categories and I understand that the difference between the SW and OT is internal/external. However, reading the analysis that has been done, it seems clear that the distinction being made is temporal. The SW are the current state and the OT are things are in reference to the future. Is this an approach that is typical, or is it more likely to have been just how the people completing the analysis interpreted the meaning?

Answer 1

I disagree with Deer Hunter almost completely.

The SWOT analysis is a simple and very powerful tool and is an input to so many other pieces of business analyses: product selection, vendor selection, project selection, outsourcing, and insourcing to name a few. It is done at the organization level, and then decomposed at the division level, business unit level, team level, and even individual level. It is performed on a set frequency, like yearly when you are developing next year's plan, and on an ad hoc basis when you are preparing for a specific effort.

Remove static and dynamic from your thinking here. Nothing is static. SW describes your current situation for whatever you are measuring, e.g., your capabilities, your products or services you sell, intellectual capital, etc. I am strong at this but am weak at that. You cannot just claim it, you have to substantiate it. If you say you're strong at something, how, why, show the evidence. Same is true for weaknesses.

OT is your risk analysis for both favorable (O) and unfavorable events (T). Is your risk management just a thing you do because it was written in a management book? It describes the future. Risk requires a ton of analysis so this would not qualify as something that was exaggerated.

Do it, do it often and do it well. Invest in this because it is an input to so many other decisions you have to make. In fact, it would not be unwise to bring in an outside party to help with this as that would help to remove the politics. It requires brainstorming, research, analysis, deep thinking, many iterations, and the result is a living document designed to keep evolving as your company evolves and the environment continues to change.

Answer 2

The word analysis in SWOT is wildly exaggerated. What you feel is most likely correct: "I really get the feeling that we are going through this process because someone read in a management book that it's a good thing to do"

However, back on topic. Yes, Strengths and Weaknesses are static and mostly internal (unless your team is particularly favored/discriminated against by the management), Opportunities and Threats are dynamic, but may be internal as well as external.

One more thing, though. It is a mistake on part of your managers to allow you to read SWOT from another team for obvious reasons of cross-influence and induced groupthink.

EDIT: SWOT is in my experience a very basic exercise to discipline the mind. The disadvantage is that there are much more complicated, involved and fruitful exercises of the same kind. Doing explicit risk management trumps SWOT any time; calculating ROI of various investment opportunities, wargaming likely moves by competitors/suppliers etc. etc. all take time and produce tangible results. SWOT is an intermediate input into decision-making and requires a certain mental model and attitude; from the same SWOT analysis 5 different managers will likely draw 5 different conclusions.

Answer 3

I think David's answer is on-target, although I think that more emphasis should be placed on the 'substantiate' aspect of what he said. The SWOT analysis is really an 'assessment' of the situation, and needs to be reality based. All too often the analysis ends up being a statement of what the team 'wants' themselves to be, not what they really are, and this is where the substantiation has to come into play.

"We are strong in this area." Great, show me how you came to that conclusion and see if I agree. "We have this opportunity." Really, based on what, and what has to happen for that to be a reality? Don't say you have the opportunity to be number 1 or 2 in your market when you're number 9 now and not doing anything differently.

I once led an org through a SWOT and the leader was adamant that their core strength was developing leaders, and everyone on the exec team agreed. But when challenged for evidence he couldn't point to a single leader they had developed internally. He 'wanted' to be good at it, so he considered it his strength.

So follow David's advice, and remember that there must be evidence of your conclusions, and the whole team has to agree.