Do the SWOT! – Laying the Foundation for Strategic Planning

I’m working on a book project on strategic planning and thinking about all sorts of strategic planning related topics these days. One critical element is the SWOT analysis. Common in large organizations, many small businesses and solo-preneurs may not be familiar with the tool. It can be a powerful way to lead off your strategic planning process (now, I know that many people steer clear of the “p-word,” but trust me, taking the time to plan can really increase the odds of your success).

Let’s take a look at how this might work. We’ll use an example that most of you should be able to relate to – planning a family vacation. While it’s not likely that you actually go through a formal strategic planning process when you plan your vacations (at least most of you probably don’t!), there’s a good chance that this planning is going on in your head at some level.

So, you’re planning a family vacation and let’s pretend that you’ve gathered your family members together to do a SWOT analysis. You’ve come up with a broad list of strengths, weaknesses, opportunities and threats and you’ve narrowed that list down to the top 3-5 items in each category which are:

Strengths:

1. Plenty of money in the budget for a trip.

2. The entire family is excited about taking a trip together.

3. The entire family agrees on a vacation destination.

4. The entire family’s schedule allows for two weeks away.

Weaknesses:

1. Little brother gets car sick and Mom is afraid of flying.

2. Big sister doesn’t want to leave the family dog behind.

3. Dad wants to plan the itinerary completely in advance; Mom prefers to be more spontaneous.

Opportunities:

1. There’s a great deal on rooms at a wonderful hotel in your destination city.

2. Because of the many cultural and historical aspects of the city the kids will actually get some educational value out of the trip.

3. Mom is able to take advantage of the opportunity to meet with a potential new client.

Threats:

1. It’s a beach vacation and there’s always the potential for bad weather that could spoil the trip.

2. You’ve read some recent reports of increasing crime in the area.

3. An important meeting at Dad’s place of employment could throw a monkey wrench into the timing of the trip.

As you review this list of top strengths, weaknesses, opportunities and threats, hopefully you can quickly see how you would attempt to leverage (or take advantage of) the strengths you identified, how you would consider the weaknesses and their potential impact on your plan and consider ways of potentially overcoming these weaknesses, how you would take advantage of the opportunities as you develop your plan – and how you would take steps to avoid or minimize the threats (or, in cases when you have no control – e.g. bad weather – how you might incorporate elements in your plan to address these potential threats).

And that, in essence, is exactly what you would do in your business as you move forward with the strategic planning process! The issues you identified through the SWOT analysis are the foundation for the next step of developing the actual plan.

It’s that simple – and that powerful.

I’d be interested in hearing from those of you that have conducted SWOT analyses in any types of strategic planning settings. What has worked for you? What hasn’t? What tips would you have to share with others?

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