Thoughts on SWOT

For all the talk about how to track progress on goals (cough OKRs) there seems to be much less said about figuring out goals in the first place. Over the last couple years I’ve been adopting SWOT thinking as a key piece of this puzzle.

It’s not a complex process, but it brings together looking both inward and outward and considering both the positive and the negative. It’s simple and (can be) effective. Its goal is to help you do one important thing: avoid blind spots.

Since I’ve made this part of my process for figuring out objectives, I can’t imagine not doing it.

This was really driven home for me a couple months ago, less than a month after incorporating a new business, when the world got turned upside down by a virus.

The Matrix

The quick summary is SWOT is a 2×2 matrix that is breaks down into Strengths, Weaknesses, Opportunities, and Threats.

It evaluates on two dimensions. First, what you have going for you versus what is against you (ie, positives and negatives). And second, the characteristics of your organization versus the broader environment (ie, looking inward vs. outward).

Positive and inward looking = Strengths.

Negative and inward looking = Weaknesses

Positive and outward looking = Opportunities.

Negative and outward looking = Threats.

It’s useful to visualize this in quadrants (which I currently I currently use Notion to quickly put together):

Strengths – what inherently about your team points to success	Weaknesses – what inherently about your team points to failure
Opportunities – what your environment makes available for success	Threats – what in your environment wants to take you down

“You are here”

These four quadrants are very understandable, which is a great starting point. The power of this categorizing is in thinking deliberately about each of the categories for your current situation.

SWOT is like the “You Are Here” flag on the map.

If you work on this in a group, it’s a great foil for brainstorming to get a take on where you stand. I have found this will generally uncover a couple things. First, there are probably at least a couple things in the categories that you personally hadn’t thought of. Second, you may find that what someone thought was in one category was really in another.

For example, small team a strength? Often, absolutely. That’s how early fast progress is made. But, at some point, is a small team a weakness? Often, absolutely. That’s when we find we need to grow our teams to scale the business.

The key here is that these are uniquely ours. We have to figure them out for ourselves. Not only that, but they are true for a particular point in time. Strengths can become a weakness (small team) and weaknesses can creep up on you (technical debt). Opportunities can present themselves (imagine being Zoom and suddenly everyone and their mother (really, literally) needs easy videoconferencing?) and threats can crop up pretty quickly too (will consumers stop spending for a while?).

Fast and Slow

As a baseline, I think it makes sense to do SWOT thinking at the same pace that you are doing goal setting. Once you think of these four categories, how could you not factor them into how you decide your Objectives?

That means, probably, a quarterly revisiting.

Something I’m careful to do is not look at my previous SWOT thinking until I’ve thought through how it looks currently. I think that this keeps from getting stuck with the thinking of the past.

I start each SWOT exercise fresh, trying to be honest about all of the categories. I find it’s a great way to think about the overall environment (industry, economy trends, consumer trends, etc), and evaluate how myself and the organization are performing.

One of the strong benefits of doing this exercise on a regular basis is so you don’t become the well known metaphorical frog in the slowly warming water that never gets out even when it gets to a boil. The whole point is to take an honest evaluation of the situation as it currently is so you can take the right actions in the direction of success.

Only after I feel like I’ve fleshed out what I can in all of the categories do I look back at a previous iteration to see how it compares. This is a chance to see if I’ve forgotten anything, or may something moved from one category to another (hopefully not unexpectedly).

So that’s the slow. Probably quarterly.

The “fast” is when things get shaken things up and can’t wait. It shouldn’t happen too often, but COVID-19 was one of those.

In these emergency situations SWOT thinking helps organize my thoughts and sets things up to be in perspective. From this more deliberate vantage point it is easier to figure out what needs to be done. Even when there’s no good path forward, there’s still a best path forward. Taking stock of the situation, the good and the bad, looking inward at the organization (or myself!), and outward at the outside world, gives context needed to act.

Getting back to the frog… Given he has some time to kill he may do a SWOT analysis of his situation that looks something like this:

Strengths – I can swim – I can jump well	Weaknesses – I don’t always notice slow change
Opportunities – No lid on this pot I’m in – Nice swamp nearby with lots of flies – This water is warm and relaxing	Threats – I’m in a pot on a stove – I have tasty legs

Knowing is (only) Half the Battle

Juat as the S, W, O, and T’s are unique to the organization, so are the options for what to do about them. SWOT is a way to capture context, and not a formula for what to do about it. Deciding is where the money is earned.

Maybe we need to build up a strength before countering a threat.

Doubling down on strengths could be more important than addressing weaknesses for a quarter.

Or maybe we need to eliminate a weakness before we can take advantage of an opportunity.

For threats in particular something I’ve found useful is to further characterize each one with a likelihood or with a timeframe, which are valuable when it comes to trying to prioritize and time efforts.

If we revisit our frog friend and his SWOT analysis there are a couple directions we can imagine it going in. If he’s really risk averse he may decide to eliminate his one big threat given how well it lines up with his weaknesses and can exploit another opportunity utilizing his strengths. However if he’s more open to risk he may decide he likes that warm relaxing water enough to stick around, for now. Maybe with a plan to be triggered if his threat upgrades (say, someone lights the stove).

Hopefully our frog at least reconsiders his SWOT analysis again before long, at which point “the stove is lit” or “this water is getting hot” make it to the list of threats and his action plan becomes more obvious!

One SWOT To Rule Them All? (no)

There are multiple ways to evaluate S, W, O, and T’s because reality of situations is multi-dimensional. As a startup, when COVID rocked the world we actually did two SWOT breakdowns. One was a Product SWOT, and the other was a Funding SWOT.

The Product SWOT was framed by how the potential customer world might look. Whether our product was positioned well for the world people were finding themselves in. Would people’s habits change in ways that make the value proposition weaker? Luckily we weren’t aimed at any of the areas of the economy with Threats that are truly scary. Consider how the Opportunity quadrant suddenly looked for Zoom or how the Threats quadrant suddenly looked for Airbnb.

The Funding SWOT was framed by how the venture capital environment might look this year if that’s the path we find ourselves on. Here we were lucky again that we weren’t at a fund or die point, and I’d much rather be starting in this environment fully aware of the challenges than needing a follow on round with a business built on old assumptions. Either way it’s a valuable exercise though. I will say, the Threats quadrant had the most entries, most of which were in the form of open questions!

While both the Product SWOT and the Funding SWOT can have a daunting Threats quadrant in these circumstances, it’s the full picture that matters. The framing that SWOT provides helps to keep from getting overwhelmed with the Threats as you see your Opportunities and Strengths at the same time.

While my current thinking is in a startup environment with a singular focus, if I look back at past experience I can see where it would have been beneficial thinking for any particular team, program, or project. The S, W, O, and T’s don’t just make sense in the context of overall evaluation of an organization, but thinking this way also makes a lot of sense relative to a particular project or team.

Takeaways

In the end, here’s what I’ve found SWOT has going for it:

• It encourages diligent outward looking and keeping informed enough about your surroundings to understand your opportunities and threats.
• It also encourages introspection and rewards honest evaluation of strengths and weaknesses. This has follow-on benefits like reinforcing what is important to measure and putting in place mechanisms to do it.
• It brings together these positives and negatives, inward and outward looking, in a way that you can consider them together without getting overwhelmed.

BUT you need to keep in mind:

• It’s a context at a particular time. These facts and evaluations can change slowly and you need to re-evaluate periodically. They also can change quickly and can really help focus your thinking if you have the sense that your snowglobe just got shaken up.
• Do it from scratch each time, just look back to see if you forgot anything.
• It feeds into your decision making but it’s not a recipe for making decisions. There will always be trade-offs.

Have you tried SWOT? What have you found? I’m @shearic over on twitter.