Wednesday, February 06, 2008

SWOT analysis - why not try another approach?

People make a lot of the SWOT analysis in strategic planning. As a rudimentary approach to thinking about strategy, the SWOT works pretty well. Decades of experience has shown us that great strategy requires much more focus on strengths and opportunities.

There is so much more to great strategy than a simple SWOT analysis. Sure, it’s a great buzzword, but I’d much rather see a strategic plan built around the strategic competency work of C.K. Prahalad and Gary Hamel. Why? There are three main reasons. First, the SWOT methodology creates unnecessary friction around the weaknesses and threats. Second, SWOT-based strategies seldom push the management team hard enough on creating truly distinctive competitive advantage. And third, there has been little, if any, effort put into making the SWOT analysis more data-based (by most practitioners).

So why not just toss out your old SWOT analysis if your strategic planning isn’t working for you this year? I think this is a darn good question.

.

5 comments:

GordonG said...

Hi robert

Just how would you design "a strategic plan built around the strategic competency work of C.K. Prahalad and Gary Hamel."?

Gordon

GordonG said...

Hi Robert

Just how would you develop "a strategic plan built around the strategic competency work of C.K. Prahalad and Gary Hamel."?

GordonG

Chris Brown said...

Robert:
So if you don't think a SWOT analysis is good, what should replace it? Just throw the tool away with nothing else in it's place? Or is that where the balanced scorecard comes in?

Just curious.
Chris Brown

Robert Bradford said...

I'd start with the strategic competencies exercises in my first strategic planning book. Sometimes, I still use SW in strategic planning (depends on what I think is needed), and I still always use opportunities.

Mabs said...

It is crucial to remember what a SWOT is for. It is intended to summarise a strategic situation, with a view to deciding what the organisation should do next. Check http://www.coursework4you.co.uk/swot.htm to see why companies need this approach.