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Tuesday, October 12, 2010

Moving Strategy from SWAT to SWOT

Companies have to move fast in the world of a voracious 24-hour news cycle that feeds on the slightest development and then spits out an issue for digestion by vast social media networks.  Small issues can become tidal waves in hours. We see it happen every day. There are no ideal solutions for dealing with the reality of instant access in a highly transparent environment. As in everything, advance strategic planning helps.  But situations that call for rapid fire decision making are usually caused by unexpected issues that are difficult to anticipate. Prior direct experience helps, but the range of possibilities confronting a business in assessing its choices can make an an individual's relevant experience one dimensional.

So, how do companies identify strategic choices when the pace accelerates or the pressure increases?

How do you try to provide a context that can rapidly find the major points you need to consider in coming to the right course of action?  Using three basic elements can provide a very useful solution when fast paced strategic decisions need to be made.

  • Process:  It is surprising how many companies don't have a defined and tested process for dealing with rapid fire strategic issues. This is like responding to a fire without an escape plan. So we counsel companies to develop a clear process for identifying what to do when fast strategic decisions are required.
  • Team: The second element is to assemble a small team of the right people -- usually 5-7 members who either have direct involvement in a situation and/or a cross section of related and authoritative backgrounds in specific areas. For example, if a competitor announces a disruptive technology aimed directly at a company's core market, sales, marketing, research, and product development teams are rallied together. When a new product is delayed, marketing, sales, finance and engineering meet to decide the potential impact from several aspects. When a CEO leaves, HR and PR teams are quickly aligned to develop a plan for internal and external communications.
  • Tools: If a company has done 1 and 2 -- defined a process that includes access to the right SWAT team for a particular strategic choice -- the third element is to define the choices and their potential impacts to reach the best decision as fast as possible.  This is where SWAT teams need to become Strategic SWOT teams.  

Strategic SWOT starts with a traditional approach identifying internal Strengths and Weaknesses and external Opportunities and Threats.  The key to turning SWOT analysis into a strategic tool comes in the filters you apply. Here is a brief four-step process anyone can use to master this:

  • First, use the S-O filter to match the internal strengths with external opportunities and list these in the upper left quadrant of a two-by-two matrix.
  • Next, match internal weaknesses with external opportunities and list these as Weaknesses-Opportunities (W-O) strategies in the upper right hand quadrant.  
  • Align internal strengths with external threats and list these Strengths-Threats (S-T) strategies in the lower left hand quadrant.
  • Finally, use the lower right right quadrant to list Weaknesses-Threats (W-T) strategies by aligning internal weaknesses with external threats.
At this point, your SWOT list should be transformed into a number of potential strategic options to consider.

In a perfect situation, most companies would choose offense: strategies that applies company strengths toward the greatest opportunities -- S-O strategies. But rapid fire strategic decisions don't always involve opportunities to show your best stuff. In general, here is what the the other three quadrants will lead you to consider:
  • W-O strategies overcome a client's weaknesses to pursue opportunities.
  • S-T strategies identify ways to reduce vulnerability to external threats. 
  • W-T strategies establish a defensive plan to prevent the firmʼs weaknesses from making it susceptible to external threats.
Strategic SWOT is not a perfect solution, and the strategies are not automatic.  But used properly with the right cross section of team members, it can get you a lot closer to better decision making when time constraints are the most pressing. If you've had experiences -- good or bad -- using this or another form of SWOT, we please let us know.

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