Recall the last time you had your strategic planning with your team. Did your plans turn out to be successful? Or were you frustrated that last year’s SWOT analysis proved to be lacking?
While the SWOT analysis is doing a good job looking at the strengths, weaknesses, opportunities, and threats — it just needs to retire. It has so much baggage with it, and it has a few restrictions and limitations.
I will divide this article into two sections: In the first section, I will give you four reasons why the SWOT analysis tool sucks. In the second section, I will share the tool my team and I are using that’s guiding our clients to focus on their step change with maximum effect.
Now, on to the reasons why you need to rethink about using the SWOT tool for your next strategic planning.
1. It’s become a cliché. The real problem with the SWOT is not the tool itself — it’s that people do it to complete it rather than to seek to understand their context. If you ask people, “Have you done the SWOT?” you get, “Yeah, I’ve done the SWOT.” But if you ask them, “Do you understand your context,” you get a different response.
2. Information doesn’t get prioritised. People complete a SWOT by pulling out last year’s SWOT and just adding extra stuff. So they only get pages and pages of information that are not prioritised, which is an issue. The key here is that if you don’t have your context on a page, you just don’t have your context.
3. It’s too generic. The information that’s in the SWOT is too generic.
4. It’s not time-critical. SWOTs lull us into a false sense of security — it lets us think that we can somehow stop time. The stuff-ups happen when the context changes. Now opportunities and challenges are time-critical. This means if we’re too early, we’re not effective. If we’re too late, we’re sometimes out of business.
So it’s very important to have a tool that discusses the time-critical nature of the context, because if the context changes, then strategy has to change. People want context to conform to their planning cycle. But that’s not the way the world works. So we’re better to work with a tool that indicates how the world works rather than fight against it.
So What Tool Works?
At Step Change, we use the strategic radar instead of the SWOT tool to help unlock opportunities for our clients. Here’s why this is effective for strategic planning:
1. It asks eight essence questions to get specific. When you build a strategic radar, you are guided by 29 disruption factors and 8 essence questions. The essence questions look at the relationship between your business and the context. The disruption factors are what they state (i.e. a disruption to the context, a dent in the universe or reality).
2. It’s all in a page. You get a single-page view of your external and internal opportunities and challenges, which effectively gives you the context you seek to understand.
3. It takes time into account. Opportunities and challenges are time-critical. As opposed to the SWOT tool, you actually get a sense of time by using the strategic radar. And on a single page, you get the sense of what’s coming — in 1,000 days, in 3 to 7 years, in 7 to 10 years — and you start to be responsive and adaptive to it.
4. It forces prioritisation. George Miller (1956) said humans can hold seven plus or minus two bits of information; it was then debunked by Norman Cowan (2004), who said people can hold about four pieces of information. So if we stretch it and assume that maybe people can handle around six pieces of information, then at the most, we need the top 3 opportunities and the top 3 challenges in order.
- Quadrants 1 & 2 are your market forces, competitive forces, consumer trends, and environmental factors
- Quadrant 3 is your internal opportunities. This is your innovation zone; this is where you look to leverage your strengths and advantages
- Quadrant 4 contains the internal challenges and limitations. These are the factors that get us stuck or stopped, limiting us on our ability to deliver the bottom-line strategy. The restrictions could be around the budget, people, knowledge, will, skill, capacity, or delivery
It was Bill Gates who famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” This is exactly the purpose of the radar. Though we don’t control the way and the rate at which things are moving and changing, we can respond to it.
Editor’s note: This article has been updated for freshness and relevance.