It is often said that your business can only be as good as your weakest link. The SWOT analysis is a tool you can use to identify your strengths, weaknesses, opportunities and threats. Whatever your school of thought — focus on your strengths or minimize your weaknesses — this allows you to identify what you want to work on. This is a great exercise to do with your management team on your entire organization, a department, a product, or a service you provide.
It will provide you an amazing amount of information and is often done prior to a strategic plan. It is sometimes helpful to have a facilitator that is not biased to help you through scribing and the later exercises, although not necessary.
• Strengths: These are generally within your control. A strength might be a high rating of 97 percent on your client satisfaction ratings, or 70 percent referral or repeat business.
• Weaknesses: These are generally within your control also. They are areas that you would like to improve or eliminate. A weakness could be your company being understaffed and clients having to leave a voice mail message rather than talk with someone immediately, possibly resulting in lost work.
• Opportunities: These could be short term or long term. They are things that would be good to do. This is brainstorming; don’t worry about the “how”, just the “what” now. These are also usually the opposite of your weaknesses. For example; if a weakness for your business is “slippage” or projects finishing over budget, an opportunity would be either projects finishing on or above budget. Another may be hiring a receptionist to answer client calls immediately capturing lost business (listed in the weakness example above)
• Threats: These are usually things that are outside your direct control, yet may have some impact on your business. For example, if your business relies heavily on home equity loans, a threat may be increased interest rates. It could lead to new ideas to hedge against the threat.
If you have been successful with this exercise, you have a room full of easel tablet paper taped up all over the room. Now it is time to go to Step 2. Take scissors and cut each comment out and throw it in a pile. Now group the comments into about six similar type groups. For example, you may have one that has all financial topics, one that is HR related, one that is related to strategic or vision, or one that is focused on client relations.
Take all these similar items and tape them back onto an easel pad in no particular order. After each grouping is taped together, post it for the entire group to see. Have each participant take a different color marker and let them vote, usually three items in each grouping that they feel is a priority.
If all went well, you should have six categories with three priorities in each. ou now have 18 priorities to attack in your strategic plan.
Here is the difficult part: Much of the information on that paper that did not get voted on still exists and really needs 3 years or more to achieve. You can compile all the information in spreadsheets and keep it to re-visit after your first three priorities have been achieved.
You now have to assign people responsible, draft a plan, and set a timeline to achieve it. You can assign champions for each new category and their level of involvement will vary with the structure of each company. If they are department heads, they might be the ones coming up with the strategic plans and communicating them back to the organization. What you don’t want to do is have this meeting in a year and see all the things you didn’t achieve. Usually setting clear action plans for these items, clear authority for who is responsible (shouldn’t be more than one person) and setting check in times on progress reports.
Don’t forget the “SMART” rule of making the plans Specific, Measurable, Achievable, Realistic and Time bound. Good luck, I would love to hear from you if you do this or if you have done this any tips you have found.
Click here to read six more tips on making SWOT work for your remodeling business.
Craig Durosko is the founder of Sun Design, a Burke, Va.-based design/build firm he started in 1988. Sun Design has won more than 70 awards over the past 20 years for design, customer service and business success, including being recognized by Inc. magazine as one of America’s Fastest Growing Companies. He can be reached at firstname.lastname@example.org.