Industry Update
Opinion Article 2 June 2017

Getting Your SWOT Analyses Right

By Paul Sarlas, Founder/CEO at Savvy IQ Hospitality Consultants

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Most of us have probably taken part in a whole boatload of SWOT analyses. Certainly, in my time, companies and staff have shared numerous SWOT analyses with me. They all seem rather basic, Marketing 101 kind of stuff. Yet, just because SWOT analyses are basic does not mean that most companies carry them out well, or that they even get them right.

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In fact, most people carry out SWOT analyses very poorly, and they get them wrong, no, very wrong. Let me share with you why so many people mess up their SWOT analyses, and, more importantly, how to get them right.

Getting SWOT Analyses Wrong

In order to explain why so many companies get SWOT analyses wrong, let me describe how most companies develop their SWOT analyses. I admit that what I am about to share with you is a parody, but it is only just a parody…

Most people start their SWOT analyses with their strengths, which the participants in a SWOT analysis session typically feel pretty good about. They know that they have to admit to a few weaknesses, so they move onto that next, but nothing that would be politically problematic. At that point, the participants are feeling somewhat tired, so they pull together a few opportunities, and finish up with a handful of potential threats.

At this point, it is close to lunchtime, so the group arranges for a junior staffer to type up the results. The staffer circulates the document and places it on a company server, where it is promptly ignored until it is archived and deleted a year later. The end result of all of this effort is, to be precise, nothing.

Getting SWOT Analyses Right

So, how do we get SWOT analyses right? The answer to that question is to remember that the purpose of a SWOT analysis session is to identify the opportunities that we are going to pursue over the following year.

We should therefore, start any SWOT analysis by focusing on opportunities, and by that I mean only those opportunities that are likely to be substantial enough, and doable enough, to be worth pursuing. In practice, as we will see, we will end up spending the bulk of our time on opportunities, and very little on anything else. After identifying opportunities, we should then list any serious threats. Just as with opportunities, we should only focus on those threats that are likely to be material enough, and probable enough, to be worth considering.

My basic advice when it comes to strengths and weaknesses is to spend very little time on them in any SWOT analysis meeting. While identifying strengths and weaknesses may be an interesting exercise, it is rarely time well spent. The only reason why we spend any time at all on either strengths or weaknesses in a SWOT analysis is to make sure that we can realistically attain our chosen opportunities, and deal with any serious threats. I wish to emphasize in this context that a strength means absolutely nothing, unless it enables us to pursue a sizable opportunity or deal with a significant threat. All other so-called strengths are not actually strengths at all, but merely irrelevances.

At this point, we now have the raw material for a successful SWOT analysis. But we have to take it a level deeper if our SWOT analysis is actually going to be useful. We have to remember that "we can only do three"…

We Can Only Do Three

Steve Jobs would gather together his lieutenants each year to lay out the opportunities that Apple could pursue over the following year. Inevitably, the Apple management team would come up with a long list of potential opportunities that Apple could go after. Jobs would then say that "we can only do three", and he would list the three opportunities that Apple would focus on over the upcoming year. What I would suggest is that if that is true for Steve Jobs and Apple than it is true for all of our organizations. Realistically, we can only do three.

We should make sure in a SWOT analysis meeting that we select the Top Three opportunities that we should go after, and the Top Three threats that we need to deal with. Because we cannot focus on everything, we should then ignore the rest for the time being.

From SWOT Analysis To Actionable Results

As in any other project management meeting, we should finish up our SWOT analysis by allocating responsibilities, milestones and deadlines for each of the three threats and opportunities.

My approach to SWOT analyses may not be quite what we have all learned in business school. On the other hand, if we go through the approach to SWOT analyses that I have just laid out, then our SWOT analysis meetings will be much more productive, and they will actually produce focused and actionable results.

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Paul Sarlas

Paul Sarlas was born in Sydney, Australia and was exposed to the hospitality industry from a young age, growing up in a family that owned and operated cafes and restaurants. Paul began his career in the family business, working in all aspects of the restaurant industry, whilst studying commercial cookery to become a qualified chef.

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