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Beware the Limits of SWOT Analysis
Executives often use SWOT analysis to assess an organization's strengths, weaknesses, opportunities and threats. It can be a good tool if used wisely, offering a standard framework for discussion. But it has some inherent limitations and sometimes can do more harm than good by reinforcing a status quo mindset.

In general, there are several common pitfalls to avoid. The first is "too much navel-gazing." Assessing an organization's strengths and weaknesses can quickly lead to the consideration of a laundry list that includes both strategic issues and mundane ones. The second pitfall is getting "imprisoned by the status quo." Winning strategies are about moving the organization forward no matter what happens in its specific industry or field of expertise. "In turbulent times," Decision Strategies International founder Paul Shoemaker wrote, "this requires much more than playing your current hand of cards better. Often, you have to change that hand by trying new things and perhaps changing your business model entirely."

The third potential trap is "insufficient systems thinking." Mapping out how social, technological, economic, environmental and political forces may impact an organization is difficult. The top strategic thinkers ask three questions: one, when will key trends might stop and why; two, over what time frame could key uncertainties play out; and, three, how do the major external trends and uncertainties interact and affect the organization. The fourth pitfall is "poor outside-in analysis." In many planning sessions, internally focused topics frequently receive too much attention, leaving little time to address "outside-world" concerns. "To escape this trap," Shoemaker advised, "you need to start your discussions by exploring how the world is changing around you. For example, a leader may first ask, 'How can we serve our customers better?' or 'How should we improve our products?'"
Inc. Magazine (09/08/14) Shoemaker, Paul
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OCTOBER 2014 EDITION
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