The SWOT analysis — or Strengths, Weaknesses, Opportunities and Threats — is one of those darling strategic planning tools that people still cling to.
There was also a great article at Nonprofit Hub titled Why Most SWOT Analyses Stink that speaks of the dangers of a SWOT chart if done incorrectly.
I want to go up one level here. I remember Roger Martin, author of Playing to Win and former dean of the Rotman School of Management at the University of Toronto, saying this about the upfront SWOT analysis:
Perhaps the single most common way to kick off a strategy process is with a SWOT analysis. However, there is simply no such thing as a generic strength, weakness, opportunity, or threat. Roger Martin, "Three Quick Ways to Improve Your Strategy-Making"
You can read his insights here.
I won't bore with the history lesson. I take it that you're a SWOT refugee looking for refreshing validation on why not to use it in the present era.
My top reason is this:
There are so many things a SWOT analysis cannot capture.
This cascades into various other reasons which you'll discover below.
SWOT charts have long been dismissed and carted off as a derelict tool of a foregone time. Eavesdrop into any strategic planning discussion, and you'll likely hear some skirmish between proponents for and rebels against the SWOT.
By the time this list-making exhibition wraps up, the information ages and expires. Consultants claim that the true problem is with the facilitator's over-reliance, ignorance, or both, and that may be true.
But they'd still claim power in the SWOT, but I'd never use them even if asked to complement the strategic process.
Consider the unforeseen problems, obstacles, crises, or opportunities that arise along the way.
How often have you discovered that you still had missing data and open questions despite a SWOT chart?
When's the last time you actually referred back to a SWOT to:
- Adjust on-the-fly because x y z happened?
- Deal with competitors? (if you're a nonprofit, you will still have competition)
- Decide what your real challenges are? Refer to the Outcomes Awareness page to get an example of the various collaboration outcomes. Here's an explanation.
- Explore imminent business problems?
- Untangle huge organizational messes?
And how often have you discovered information that was overlooked, terribly inaccurate, or just plain wrong? Yet, the group actually went along with it?
BOTTOM LINE: Organizational issues are crazy complex. Anywhere from competition, fundraising, hiring talent, program issues, and adjusting a nonprofit's direction. Boxing data into four rigid quadrants is a poor substitute for actually exploring the depths. It's vague, and so many things happen in the field that can render the expensive SWOT chart outdated and useless.
So what to do?
Here's an always-updated list of reasons, pointers, and counter-suggestions:
1. Consider the overall process
And not just the tool.
Mission-Money Matrix, the MacMillan Matrix, the Force-Field Analysis, Life Stage Models, PPCOs, Barney's Resource Based View, SWOC, PESTEL, SIGH, BORE, TURD, and other ones you can come up with.
SWOT charts are just platforms for data input.
But consider the process surrounding these tools. I'm a major proponent of lean startup principles, and one massive tenet I suggest from the absolute start is testing assumptions as early as you can: Rather than jumping into SWOTs, you need a robust process to test assumptions about what the real strengths, weaknesses, opportunities and threats are, and then to choose the ones that are relevant to tackle, correct, or solve.
What is process?
Process is the set of steps and activities used to explore strategic questions.
That's it. Call it the strategic process or whatever, but it's essentially question-storming.
Strategic thinking is an inherent act of creative inquiry. If you're trying to chart a new way forward, it's going to take seeing things at a new angle. How your consultant or facilitator will guide you through those questions is at your discretion.
Because if the "old ways" weren't working, then obviously designing a fresh route involves problem-solving, calculated risks, and making small bets on something new.
Strategic thinking is an act of creative inquiry.
BOTTOM LINE: Consider process awareness, or process design. Find someone who is transparent and explicit about how your needs will be explored.
It's easy to funnel money and energy towards the wrong things. Which leads us to the next point:
2. The quadrants are ambiguous
And this opens up a vortex of guessing and subjective thinking.
Participant emotions arise when deciding if something's really a strength, weakness, opportunity, threat etc.
"We're not getting enough donations," says one person in the room. "I think it's because we aren't doing enough social media."
"Um, yes we are!" Says a voice across the room who reacts defensively: It's the staff person who does the social media marketing thing, but now has risen to defend themselves. Can't they see? She has been doing her utmost best, but now she feels unappreciated for her efforts.
Is that really a strength? Or is that a weakness? Maybe a bit of both? The fact that we're scrappy and frugal means we can free up resources to do other things. So do we really need to list that under "weakness?"
Are our partners really collaborators? Or competitors? If so, do we consider them threats? Our missions are somewhat complementary. So maybe we can flesh out a collaboration? That could be an opportunity, not really a threat?
SWOT charts open up a new realm of unanswered questions. So, consider context: What are your top strategic issues? For example, if you want to really know where most of your overhead is coming from, then the context is going to be your nonprofit's business model. Maybe you'd explore your nonprofit's revenue streams and nonprofit marketing setup. Use the Nonprofit Business Model Canvas to explore that context.
Trust me, visualizing the flow of resources in your nonprofit can save time and precious mental energy.
Read the Skylance.org entry on Nonprofit Business Model Design.
BOTTOM LINE: Of course, a good facilitator can lift the fog of confusion, help draw out the details, and soothe fiery responses, but the point is that there's just no such thing as a generic strength, weakness, opportunity, or threat. Without clarity here, the rest of your strategies, action plans, and objectives are also doomed to be vague.
That takes us to point 3.
3. Consider cross-functional team design
I make a hardcore contrast between annual and everyday strategy. Some would advocate monthly SWOT chart refreshes. Other solutions are being spun as real-time strategic planning.
I say this reluctantly with finger-quotes, because strategy is driven by the people who put it into action. Attention should also be focused on how people are formed into teams.
So what's overlooked is the mindful construction of task force teams to get things done every day.
Strategy is an iterative cycle of doing and sensemaking. How else would you know whether that nice SWOT chart was accurate, or an utter waste of time?
We love to celebrate team diversity, but we need to be explicit in what we mean and why it's so important in the messy world of nonprofits. This isn't exclusive to Fortune 500s or the S&Ps or multinationals. So long as you're a human institution, it all counts. Allow me to explain:
There are two kinds of team diversity.
Subject Matter Diversity: This is the knowledge, opinions, values, life experiences, et al. It's what you know and have gained through life. And it's also what you were hired for. Some would claim you just need to get your best and brightest in there with the right expertise, and then "facilitate strategic discussions."
Hopefully something good comes out of it before they go back to work.
But it just doesn't matter what you know, but how you can use that information to create new pathways forward. That's why it's insanely hard for a committee of experts to create breakthroughs on knowledge alone: They're tipsy on their own convictions and expertise, afraid to take risks or refuse to believe they need "creativity" for an actual breakthrough.
They're only convinced with what they've known and what they've seen, rather than what's hidden or what could be.
Think about Radio Shack, Blackberry, Kodak, Blockbuster, and the taxi industry. All of them got outmanuvered because they couldn't answer their own key questions. Nor could they do it fast enough.
It's also tough to bring people across silos to put their brains together. Yet this is exactly what's being prompted for, or else.
You're not annually adjusting, you're adjusting every week.
You're not solving a strategic problem once a year, you're solving problems together with people every day.
And it's not just leaders and seniors solving problems, but those in junior positions, too.
This brings us to a different type of diversity:
Cognitive Problem Solving Style Diversity: This is about how people think and problem solve on a consistent basis. It's been discovered that people prefer different parts of the creative process and that there are tools to show their "center of gravity." 1
Creativity and design thinking isn't just about having great ideas, but being able to reframe old strategic questions.
Creativity is really a process. When you understand your problem-solving style preference, you can see what collaborative activities you're likely to do well in, and those activities which you may not be so great in.
Other benefits of visualizing this knowledge?
- You get to see how you, yourself, use creativity to solve problems
- You get to see how you complement others who lack your strengths; and how others complement your weaknesses.
- You get clues to why there's so much tension when your group tries to work and think together.
Here are some simplified scenarios to demonstrate where this insight can be useful:
Scenario A: Board leaders and staff can't differentiate its services from a competing organization. Their missions complement each other, but there's too much overlap. This scenario may signal a few things: difficulty to really define the problems they're solving in the field; difficulty to create unique and better solutions to a problem; inability to generate new ideas.
Scenario B: A team has gathered so much useful data and information from their program evaluation. They have so many new ideas on how to improve it, but struggle to choose the best ideas and further refine it into a practical strategy on the ground. This signals a few things: difficulty refining good ideas; difficulty coming up with criteria to choose the best ones.
Explore the entry on creating high impact nonprofit teams
BOTTOM LINE: When teams understand their creative preferences, previously weak teams can be reformed into strong cohesive teams. They have empathy for one another's style of thinking. They can leverage their strengths. They're aware of their shortcomings but have the right team mates to back them up or complement them.
4. No robust visual thinking method
I define visual thinking like this:
Visual Thinking (or sensemaking) is the activity of understanding complex situations through images, diagrams, charts, graphs, drawings, and words.
This isn't to be confused with graphic facilitation. Visual thinking is a series of problem-solving activities while graphic recording is a means to simply mirror the flow of information coming from a group. Nothing more.
SWOTs are generic listmaking tools. I recommend more robust visualization tools to organizations like the Nonprofit Business Model Canvas because of two things:
Context: You're being explicit in the problem you want to zero in on.
Specificity: The exact tool or methodology to help you make sense of data and information so that you can collaborate on action steps.
BOTTOM LINE: Visual Thinking is the activity of understanding complex situations through images, diagrams, drawings, and words. It's not enough to frame data and information into four generic quadrants. Step back and be clear about context and the specific tool, process, or methodology to help you make sense of your strategic needs.
Read the Skylance.org entry on Visual Thinking
Hope that helps.
BASADUR, MIN, GEORGE GRAEN, and MITSURU WAKABAYASHI. “Identifying Individual Differences in Creative Problem Solving Style*.” The Journal of Creative Behavior 24.2 (1990): 111–131. Web. ↩