Decision-Making - - SWOT Analysis

The next decision-making tool is a SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis allows you to go more in-depth than a pros and cons list.

To create a SWOT analysis, just like a pros and cons list, you will draw a vertical line down your paper. Different from the pros and cons list, it doesn't stop there. It gets more complex! For a SWOT analysis, you will also draw a horizontal line halfway across your page. OK, maybe the setup isn't too much more complex. Once you have four squares or quadrants, you will write strengths, weaknesses, opportunities, and threats in each square. Now, your setup is nearly complete.

One of the critical factors of a SWOT analysis is not found in the four quadrants, but it is essential to using the tool successfully--Defining the Objective. 

To define the objective:

1. Answer the why--clearly say why you are conducting an analysis. Are you launching a new product, conducting a personal assessment, or deciding whether to move forward with a new business idea?

2. Align your (or your organization's) goals--ensure that you know your larger goals to ensure that your decision fits in with the bigger picture.

3. Be specific and measurable--clearly define what success looks like.  

4. Consider timeframes--define specific goal dates. Is this a long-term or a short-term goal?

5. Involve those who need to be--if you are making decisions for your business, who needs to be involved in the decision-making process? Who does this decision affect? If it is appropriate, include them in the analysis. 

With a clearly defined objective, it will be easier to lay out specifics in the analysis. With a clear objective, everyone on your team (or if you're doing this solo) will know exactly what you are trying to analyze and what goals you are trying to achieve.

Now comes the analysis.

The first two steps are internal factors, strengths, and weaknesses. 

Step One: Identify the Strengths

-Evaluate what are the internal positives of the organization for this project.

-Consider your team or organization's expertise, capabilities, uniqueness, and resources. 

Step Two: Identify the Weaknesses

-Evaluate what are the internal negatives of the organization that will need improvement?

-Consider if your team or organization lacks resources, expertise, skill gaps, or other internal challenges.

Write all the strengths and weaknesses that you come up with in each quadrant. Once you have done that, you can move on to the next part, the external factors, opportunities, and threats. 

Step Three: Identify the Opportunities

-Evaluate what are the external positives that could be positive for the organization.

-Consider current trends in the market, changes in regulations, new funding sources, and anything else that could be beneficial.

Step Four: Identify the Threats

-Evaluate what are the external negatives that could be a threat or a risk.

-The considerations here are often the same as the potential opportunities--consider negative trends in the market, changes in regulation, competition, and anything else that could be detrimental. 

Write all the external factors in the appropriate quadrants. 

Once you have created the visual, it becomes easier to assess every element--the strengths, weaknesses, opportunities, and threats. 

Once the analysis is filled out, it doesn't mean that you have to make a decision immediately, but it allows you to see and track what is important. It also allows you and your team to focus on your strengths and address your weaknesses while capitalizing on opportunities and minimizing the threats.

Once you have completed a SWOT analysis, you should be able to return to the document and update it as new information emerges. If a new threat emerges, add it. If someone joins the team and they have new strengths, add them. If you have taken the time to define the objective properly, you should be able to continue to build the SWOT analysis into the future.