How to Perform A SWOT Analysis
Learn how to craft actionable items from a SWOT analysis. Take your Strengths, Weaknesses, Opportunities and Threats and capitalize on them!
For more resources on building your strategic plan, view the Essentials Guide to Strategic Planning.
Today’s whiteboard session is on putting together a SWOT analysis for your organization. SWOT simply stands for Strengths, Weaknesses, Opportunities, and Threats. The purpose of a SWOT analysis is to create a synthesized view of your current state. Great planning starts with an understanding of where you are today so you can build a future.
A SWOT analysis is a great way to capture and frame up what your current state is, so I’m going to talk to you about what it is in a little more detail, how to put it together, and then quickly how to put it to use. Let’s jump in.
Strengths – we build on our strengths.
Weaknesses – we shore them up.
The right-hand side of your 2×2 matrix, which is your SWOT, is your internal perspective.
On the other side, we have our Opportunities – which we invest or capitalize in.
Threats – which we monitor.
These items are external perspective.
Tip number one, do not confuse your internal and external perspective. We’re looking for a holistic view of your organization, and it’s important to be really clear about what we can impact and directly influence (internal) internal and what we can influence but not directly impact (external). I’ll talk more about that in just a minute.
So this is the structure for your SWOT. When you’re done with it, you’ll have maybe 10 to 15 bullet points in each of the four quadrants. So how do you figure out what goes in those quadrants? The simple thing to do is to hop into a room with a whiteboard and brainstorm with your planning team and fill out your SWOT.
Taking it to the next level is bringing data into your SWOT analysis. Absolutely go pull in some data so you have more of a databased view of what’s going on.
For internal data sources, get perspective from executives, board members (if you have them), partners, and vendors. Gather that through one-on-one interviews. Employee perspective is super important to help understand what’s working and what’s not working.
Customers provide the same thing. You cannot have a great SWOT analysis without understanding what your customers are saying about what you’re doing well and what you’re not doing well.
And last, but certainly not least, pull in some of your key performance indicators or very simply your current performance over the last year, three years, five years – whatever makes the most sense.
If you’re a little pressed for time, make sure you pull in your employee perspective and your customer perspective.
On the external side, you need to do the same thing. What are your information sources? I like to think about external data kind of in concentric circles, starting from the outside.
Megatrends, those are those really big things that are impacting most all organizations across our country or potentially across the globe, aging baby boomers, growth of millennials, that type of thing.
Industry, so your industry has tons of information. There’s tons of information from industry associations, and industries have all kinds of trends that impact organizations. So check out your industry association for reports on potential opportunities, threats, and trends in your area.
Coming in a little bit closer is your market. The market comes in two flavors, your geographic market or your target markets. Data sources include your economic development organization for current market information and then Census Bureau for target market information.
Competitors, everybody has competitors. Understand what your top three competitors are doing. Super important to have a holistic view of your external perspective.
If you’re pressed for time, make sure you get industry information and make sure you bring in competitive information into your SWOT. If you have a little bit of budget, you can buy reports that will make this that much richer and that much more databased. If you don’t, go with the ideas that I already shared with you.
So you have all this information. What do you do with it? Synthesize it into 10 and 15 bullet points, like I mentioned before. Group them up, sub-bullet point them such that you have a pretty well-rounded SWOT. It’s nice for it to fit on one page. Like I said, you want to be able to see your current state, one page, 11-point font. There are always more Weaknesses than there are Threats, so take that as a rule of thumb. It doesn’t have to be perfect.
Here’s tip number two. Do not confuse Weaknesses and Opportunities. This happens all the time and it results in your SWOT falling apart.
For example, one theme that might come out of your work is improving communications. Improving communications sounds like an opportunity, right? But it’s not because our external perspective are things we can influence but don’t directly control. We control communication. It’s more like a weakness, but it’s not phrased like a weakness. So it needs to live in the Weakness quadrant. If you have a lot of things like that, you might reconsider renaming this quadrant “Areas of Improvement”. If you do that, just make sure all the bullet points in this area are phrased that same way – improve communications, for example. If you want to keep it as Weakness, change it to “lack of communication” and then you have a statement that sounds like a weakness.
So why is this important? When you process out your SWOT you’re going to want to start with Opportunities. We have a whole video on that, so go check that out This is your growth area. Planning is about growth. If you have stuff in here that isn’t about growth, the SWOT doesn’t work.
Opportunities are growth goals. That’s what you do with those.
Threats don’t turn into goals most of the time. You merely watch them. You might make an initiative or two, but most of the time you’re watching them.
Under Weaknesses, these are going to turn into your operational and people goals and initiatives.
And last, but certainly not least, your Strengths are a source of your Competitive Advantage or a starting point to identify them. We have a whole video on that, so check that out to identify your competitive advantages.
Last tip, whatever you do, do not go through the exercise of putting your SWOT together and then not use it. We see that all of the time. Great planning starts with understanding where you are today and this is how you accomplish that. Make sure you use it to build out your goals and your competitive advantages.
That’s all we have for today. Thanks for tuning in. Check out our channel. Happy strategizing.