Strategy · Proving to Scaling
The SWOT analysis: from four lists to choices
You make a SWOT that ends in three choices for your company, instead of four lists nobody reads again.
Worth reading first: What you do better than anyone
Does this sound familiar?
- You once made a SWOT at an away day. It's sitting in a folder somewhere, and nothing came of it.
- Under Strengths it says 'committed team' and 'high quality'. Your competitor would write the same.
- Under Opportunities it says 'do more on LinkedIn'. That's something you're planning to do yourself, not something that's changing in the market.
- The leadership team came up with twenty points per box, and nobody knows which ones matter.
Who it's for, and when
For founders and leadership teams who want to take a hard look at their position before a strategy session, a quarterly session or a big decision. It works from Proving onwards: in Searching there's too little yet to be strong or weak at, and the Lean Canvas helps more.
The model
A SWOT puts four things side by side. Inside your company: your strengths and your weaknesses. Outside your company: the opportunities and threats in your market. Inside is what you control yourself. Outside is what's happening, whether you take part or not.
The four lists are only half the work. The value is in the next step: you set inside against outside. Which strength can you use on which opportunity? Which weakness leaves you exposed to which threat? The choices come out of those combinations. That's called the confrontation matrix.
A strength only counts if your customer sees it and your competitor doesn't have it. It's the same question as in the lesson What you do better than anyone. What everyone in your sector has, you need just to take part; it doesn't set you apart.
Attributed to Albert Humphrey (Stanford Research Institute, 1960s); the format also comes from the Harvard textbook Business Policy by Learned, Christensen, Andrews and Guth (1965). The confrontation matrix is Heinz Weihrich's (1982), who called it the TOWS matrix.
Strengths (inside)
What you do better than your competitors, seen through your customer's eyes. Concrete and checkable: 'we deliver within 24 hours, the rest take a week', not 'customer-focused'.
Weaknesses (inside)
What you do less well, or what your customer misses. Also what only you know: one customer bringing in 40% of your revenue, or all the know-how in one engineer's head.
Opportunities (outside)
What's changing in the market that could work in your favour: new rules, a competitor closing down, a group of customers that's growing. Something you want to start doing yourself isn't an opportunity; it's a response to one.
Threats (outside)
What's changing in the market that could work against you: rising wages, a new player with a lower price, AI making part of your work cheaper.
Pitfalls
Mixing up inside and outside
'Do more on LinkedIn' under Opportunities, or 'the market is growing' under Strengths. Ask of every point: do I control this myself? Yes is inside, no is outside.
Only looking from the inside
A leadership team writing down its own strengths writes down what it's proud of. Ask three customers why they chose you and what they miss, and look at what a customer who left said. Then you get the strengths that count.
Watch and read
The four boxes in three minutes, with the difference between inside and outside. A good start if you don't know the model yet.
Watch on YouTubeIn Dutch, and exactly about the step most SWOTs skip: setting inside against outside, and getting options out of it.
Watch on YouTubeHow to run a SWOT with your team: who to involve, how to sharpen the points and how to choose what matters.
Watch on YouTubeRead
Good Strategy/Bad Strategy: The Difference and Why It Matters
Richard Rumelt · 2011 · ISBN 9780307886231
This book is about the step after the SWOT. Rumelt shows that good strategy starts with a diagnosis of your situation, and then chooses. A list of wishes isn't a strategy. Around 320 pages.
View the bookApply it
- 1
Bring in the outside world first
Before the session, call three customers: why did they choose you, what do they miss, who do they compare you with? Look at what your competitors changed over the past year. That way the strengths and opportunities don't only come from your own head.
- 2
Fill in the four boxes, and keep five per box at most
Everyone writes on their own first, for ten minutes. Then together: remove duplicates, make the vague concrete ('good service' becomes 'an engineer on site within 4 hours'). Rank what's left. Five per box at most.
- 3
Set inside against outside
Four questions. Strength and opportunity: where do we go all in? Weakness and opportunity: what do we need to improve to take this opportunity? Strength and threat: how do we defend ourselves? Weakness and threat: where are we exposed, and what do we do about it?
- 4
Choose three, and turn them into work
From the answers, choose three choices at most. A choice for this quarter becomes a rock or OKR on Priorities. A choice for the longer term belongs with your success strategies on the strategy canvas.
Examples
An installation company with thirty engineers
Strength: an engineer at a breakdown within 4 hours, the competitor takes a day. Opportunity: heat pumps become mandatory on replacement. Threat: engineers are scarce and wages are rising. Weakness: all the planning in one planner's head. The choices: a maintenance contract for heat pumps with the 4 hours as the promise (strength on opportunity), and this quarter, the planning into a system (weakness on threat: one planner off sick and the 4 hours are gone).
A marketing agency of fifteen people
The leadership team wrote 'creative' and 'committed' under Strengths. Three customers said something else: 'you get our sector', all of them technical wholesalers. That became the strength. The threat was AI making content production cheap. The choice: stop doing one-off content, and advise technical wholesalers on strategy.
Do this in your own business
Everything up to here is free. What you fill in for your own business, you keep in Boldcaster.
- Go to the SWOT analysis. Under Blueprints you'll find the SWOT analysis with its four boxes. Fill it in with your leadership team, save it, and take it to your strategy session as a PDF. The choices that come out of it go on Priorities or on the strategy canvas.
- You assign the lesson to your team and see who has done it.
- The quiz counts towards your progress, and you see which lesson comes next.
Four weeks free. You'll land straight in this lesson.
Quiz
6 situations. You need 5 of 6 right. You can try again at any time.
1.Someone puts 'we're going to start a web shop' under Opportunities. What's wrong?
2.Which strength counts most in a SWOT?
3.Your leadership team has filled in the four boxes. What do you do now?
4.Weakness: one customer brings in 40% of your revenue. Threat: that customer is being taken over by a group with its own purchasing department. Which box of the confrontation matrix is this?
5.What's the best preparation for a SWOT session with your leadership team?
6.Six good ideas come out of the SWOT. What do you do with them?
Nothing is saved here. In the app, the quiz counts towards your progress.
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