I used to consider SWOT analyses to be “silly exercises,” but after using them on a number of occasions during strategic planning processes with clients and, after conducting research for my book The Complete Idiot’s Guide to Strategic Planning, I’ve come to believe that (if done effectively) they can help drive better strategy development.

If done correctly, SWOT analyses should:

• Be based on “real” data – not guesswork. If the SWOT is grounded in reality, the strategies that are developed from it will be realistic and will appropriately direct the efforts of the business. For instance, if an organization says that its strength is customer service (without data to substantiate that opinion) and creates a strategy designed to leverage this great reputation, that strategy is destined to fail. By the same token, if important data is not used or considered during the SWOT process, opportunities may be missed.
• Include broad input. Often when I work with groups on strategy development I will recommend that once they have developed their SWOT analysis, that they share it with key constituencies including employees, vendors, customers, etc. Gathering that broad input can provide an important “reality check” for the work done by the project team and, especially with employees, can generate support and buy-in for the plan.
• Be prioritized to focus on the “big rocks.” Once a list is developed I recommend that clients prioritize it using some type of group rating process to identify the most important items under each category. Those, then, provide the basis for the development of strategies.
• Finally, the SWOT should serve as the framework for strategy development. Strategies should be derived directly from the SWOT and should be focused on leveraging strengths and opportunities and overcoming strengths and weaknesses. This is actually the area of strategy development where organizations have an opportunity to be most creative and where innovative ideas can emerge, but only if the SWOT has been appropriately prepared in the first place.

Some of my thoughts on the SWOT analysis were included recently in a Business News Daily article by @NicoleFallon.

What do you think? Have you used the SWOT analysis? Has it worked for you?

Recommended Reading:

The Complete Idiot’s Guide to Strategic Planning

More Strategic Communications blog posts on strategic planning