By definition, the SWOT (Strengths, Weaknesses, Opportunities, Threats) process drives leaders to look inward at their company and industry challenges, creating more of an internal reflection of the company and industry. While helping executives see the forest and the trees, the traditional SWOT analysis tends to lead them to forget that there’s a world outside the forest. With this introspective focus, SWOT doesn’t spot the trends in other industries and distant markets that CEOs must factor into their plans.
SWOT analysis still has a place in the strategic planning process. It’s a valuable tool for gathering ideas and input from people inside your organization who are more internally focused and closer to day-to- day operations. However, as a top executive looking to scale your business, it’s imperative that you’re thinking on a higher strategic level.
SWOT helps you see the forest from the trees, SWT helps you see the world beyond the forest.
REPLACE SWOT WITH SWT
Alternatively, for business owners and CEOs looking to scale for the future and earn more market share, replacing SWOT with the SWT model (Strengths, Weaknesses, Trends) can focus on inherent strengths and weaknesses while exploring broader external trends beyond their industry or geography.
STRENGTHS & WEAKNESSES (SW)
All businesses have innate strengths and weaknesses. Managing both strengths and weaknesses is less about changing them and more about playing the hand the organization was dealt with. The keyword is inherent because the SWT model focuses on strengths and weaknesses that are relatively fixed. SW in the SWT model is about acknowledging with brutal honesty where your company’s strengths and weaknesses stand in context to the bigger picture of the global landscape.
Strengths reflect the core competencies of the company: the inherent sources of success through time. Executives need to be crystal clear on the organization’s intrinsic strengths or core competencies that have been the source of its success. By writing this down, you will have a clear understanding of the drivers of your business’ success and how you can counter your inherent weaknesses.
Weaknesses are inherent to the company and are highly unlikely to change through time. For example, this could be where your business is situated, making it challenging to attract a specific customer segment. Being clear on inherent weaknesses will poise
you to think about how you can compensate with your strengths and
how growing or future trends help your business fill gaps.
Signals from the future are all around you. Trends and competitors will often only give you part of the picture. And, if you’re only following what your competitors are doing, you risk missing something significant. It would be best if you had a contextual frame that goes beyond the competitive landscape.
Understanding your context will give you a clear picture of today’s trends and weak signals that will shape tomorrow. This kind of contextual assessment includes understanding market trends, emerging technologies, rules and regulations, economic climate, customer needs, competitors, and even uncertainties. It’s important not to think about these signals, trends, facts, and competitors within the scope of your current business. To paint the picture you’ll need for the future, go wider than your business.
As a business owner or executive, you should look at major trends, such as significant changes in technology, distribution, product innovation, markets, and social developments around the country or world that might shake up not only the business but the entire industry.
Forget about the competitor down the street. Is there a company on the other side of the globe that might put you out of business? Is
there a new technology that could lead to an overnight change in the way companies in your industry might do business? These are the kinds of questions the strategic thinking team must explore.
Who are the nascent competitors? What are you uncertain about that might affect your future context? A global pandemic? Buying behavior, technology?
Reflect on the following:
- The inherent strengths of the business that have been the source of your success.
- Details about the inherent weaknesses of your business that aren’t likely to change.
- Describe the significant changes in technology, delivery, innovation and social trends that might impact your industry and organization
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