SWOT analysis

The method establishes the context an organisation or a venture sits in, whether it already exists or is only planned.

It was developed in the 1950s and 60s at Harvard Business School.

When to use it

  1. When you want to understand which efforts to put your people and money behind for the best return.
  2. When you are preparing for a TOWS analysis.

When not to use it

  1. For working through problems — there are other tools for that.
  2. For weighing the consequences of a decision taken or planned (12 questions / the PLUS model).

The goal: used well, the tool gives you something to hold on to when you turn to short- and medium-term strategy.

How to use it

A SWOT analysis draws out the context, inside and out: opportunities and threats, strengths and weaknesses.

1. Ground rules — what to keep in mind

  1. That you are trying to understand:
    1. which internal factors you can build the venture's strength on, and which ones slow you down;
    2. which external factors are in your favour, and what could do you harm.
  2. That this knowledge is what you will use to settle a strategy for growing, for changing how you behave, or for staying out of certain situations.

2. The purpose

Every SWOT analysis should be run with a particular purpose in mind, for instance:

  1. What the whole organisation is capable of.
  2. Whether a product can be delivered.
  3. What a given market is worth.
  4. What one part of the organisation is capable of.

Unless you are looking at the whole organisation or the whole venture, the purpose should be fairly specific — "what the organisation is capable of if we are to double the headcount within two years", say. The result is then more precise, at the cost of being less general.

3. Running the meeting

  1. Define the purpose clearly.
  2. Let the team paraphrase it, to see whether it has been understood as clearly as you think.
  3. Go through the ground rules from point 1.

Your team should be the people involved in the venture, between them responsible for all of it.

4. The analysis

A SWOT works by bringing together — discovering jointly — the factors that members of the team already know separately.

Write those factors out without arguing, at this stage, about whether each one belongs, the same way you would in a brainstorm.

Once they are written out, you can work through them against the lists of aspects from the 5W+H variants, or a list of aspects of your own.

5. Putting them in order

Now is the time to weigh up each strength, weakness, opportunity and threat. A few that matter beat a dozen that barely do.

6. Where to go next

A SWOT is only the beginning. What lies ahead is turning this knowledge into actual strategies, and for that there is the TOWS analysis.

It is worth looking at how the pieces work together: two or three closely related ones — a weakness, an opportunity and a threat, say — can often be addressed for barely more effort than any one of them alone.

Use it in TeamKit