By Stephen Rhodes
Are there flies on your business? Use SWOT.
Businesses have been using the SWOT analysis tool since 1960 when it was first invented at the Stanford Research Institute . The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by Fortune 500 companies to find out what could be done about this failure. It was first called SOFT (Strengths, Weaknesses, Faults and Threats) but it hardly seemed robust enough for such a bold exercise.
Today SWOT (Strengths, Weaknesses, Opportunities and Threats) is used in business planning, strategic planning, competitor evaluation, marketing, business and product development and research. It’s a gut check on your business. Where’s the missing link? Why are you falling short on projections? If you are weak in accounting should you outsource? All sorts of things come to light in this simple exercise.
It’s a great tool for startups, and for established businesses it is a reality check.
This week I spoke to a number of managers of Ontario’s Small Business Enterprise Centres on how this tool might be used to help them analyze business plans prepared by their clients. Ontario’s SBECs work with small businesses across Ontario providing guidance, mentoring and resources to help them grow and prosper.
SWOT only works, of course, if you do something with the information. And it’s important to engage others in the process – staff, customers, suppliers – because they may have an alternate viewpoint.
Once complete, write action plans that help you maintain, build and leverage your strengths; remedy or consider an exit strategy for weaknesses; prioritize and optimize opportunities and counter whatever threats are indentified.
And then do a SWOT analysis on your key competitors. They likely have flies too.