Every now and then, at specific times, companies re-evaluate their process. This is how they go about Defining Process Measures, improving their process and adopting new processes. One of the most common and widely used methods of process measurement and dedication is the SWOT analysis. If you took even one community college class in business, chances are you learned about SWOT analysis.
Defining Process Measures: What is a SWOT Analysis?
SWOT analysis is an acronym that stands for STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS. Basically, a SWOT analysis helps a business analyze their process critically and figure out what works for them and what’s not. Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. And new businesses use a SWOT analysis to analyze their industry and business environment and formulate a strategic and winning entry strategy.
Strengths refer to advantages that a company has internally. This could range from having great employees, great company culture, patents, relationship with suppliers and distributors to a good inventory system. Strengths generally describe what an organization uses to separate itself from its competitors or what sets it apart in the industry. Like I said it could range through a variety of things both tangible and intangible. For example, having proprietary technology is considered a strength of a company and so is having a great company culture or having happy employees.
Weaknesses refer to the internal problem an organization could have or the aspects of the organization that is not up to standard. For example, having an inefficient process measure will classify as a weakness. Weaknesses vary in severity – there could be weaknesses that are dire and if not tackled could affect the operating of the company and then there are weaknesses that are minor and do not significantly affect the balance sheet of the company.
Opportunities refer to the external factors in the environment that are favorable to the organizations. Opportunities are usually macro factors that the business have no control over but are favorable to them. Opportunities range from favorable tax laws, favorable economy, favorable tariffs, a season of the year etc.
Treats are also external and they are macro factors that the business have no control over that can affect it adversely. Threats could be bad economic situations, political instability, bad weather etc. It could also be bad industry conditions like the existence of a monopoly that makes entry hard and makes it impossible for smaller companies to excel.
How to Conduct
a SWOT Analysis
A SWOT analysis is best conducted in a group. This way you can get a more wholesome and holistic analysis. With a group, you get input from different departments of the organization and from different levels of employees. You also get input from different stages of your business process and supply chain. Having a team together encourages participation in the company’s overall strategy and produces team spirit. A good SWOT analysis session also turns into a brainstorming session which could lead to a TOWS analysis. Set up the four sections on a board to write down ideas and write these ideas down in short and succinct bullet points.
You can also ask the group to fill out their own SWOT analysis template and then combine all the points together. When enough points have been written down, work through each point together and discuss them in more detail. As you do this, the main advantages and disadvantages will start to slowly surface and the focus will start to shift to what really matters. Once the SWOT analysis/brainstorming session is over, create a final, prioritized version of your SWOT analysis, listing the factors in each category in order of highest priority at the top to lowest priority at the bottom.
A company can use a SWOT for overall business-strategy or for process measure for the whole company or they can also be for a specific department or parts of the company like marketing, production or sales. This way, you can see how the overall strategy developed off the SWOT analysis will filter down to the departments below before committing to it.
How to Execute
a SWOT Analysis
Knowing how to conduct a SWOT analysis is not enough, you need to know how to execute it from start to finish and this includes the work done before the SWOT analysis, during, and after.
There are preparations that need to be made before a SWOT analysis is done. First, the organizer of the session needs to compile a list of people that will be participating in the session. This should not be done randomly. The group should be curated especially (as mentioned above) to include people from every department and from different levels of the organization. Another preparation to do is to create the organization or company profile and state it more clearly so the whole team understands the end goal clearly. This will also help the team outline the strengths, weaknesses, opportunities, and strengths of the business easily.
Also, it is important to have all the tools handy for the SWOT analysis. Get a clear whiteboard and markers of different colors, get pens, papers, office supplies etc. Set the SWOT room in a way that enables discussion and brainstorming. If you are an organization that does a SWOT analysis often or holds brainstorming sessions frequently, then it helps to have a brainstorming room set up with all the necessities and ready for whenever a session needs to be held. This is also a process measure that helps the organization be more productive.