Wednesday, March 9, 2011

The Classic SWOT Analysis: Better Backwards

The classic use of SWOT Analysis (a review of an organization’s Strengths, Weaknesses, Opportunities, and Threats) has been around for a long time in the field of strategic planning, but it can be used in a far more helpful way if it is done backwards

In the classic approach to strategy, the first step of the strategy development process is SWOT Analysis.  The purpose of the SWOT Analysis is to clearly understand an organization’s situation – its internal Strengths and Weaknesses and then the Opportunities and Threats that exist in the external environment.  The idea is that if this analysis is done accurately, then the organization can understand its constraints and performance potential.  Then the organization can do some scenario planning and figure out what its future will look like in the best case, worst case, and medium case scenarios.  It then plans its future with this in mind.

Sound reasonable?  It is.  And I recommend the exact opposite approach.

I recommend that the first step of the strategic planning process is for the organization to get clear on its aspirations – not its constraints.  People of the organization need to dream about the difference they ideally want to make and of what kind of organization capacity they need to make that difference.  They do this by creating a Vision for the future and setting Strategic Stretch Goals that will catapult it toward its Vision.  Once these aspirations are set, then it is time to do SWOT Analysis.  The SWOTs are then used to understand the organization’s present situation and how it can create a Strategy to pursue its Vision and Goals as effectively as possible.  The SWOTs aren’t constraints.  They simply articulate the reality the organization faces – and which it needs to leverage somehow – as it moves forward.

“Create a vision and set goals before understanding your current constraints?  That is totally unreasonable!”  Exactly.  When this question is inevitably asked while I am facilitating a strategic planning process I will usually quote George Bernhard Shaw, who said “The reasonable man adapts himself to the world; the unreasonable one persists in attempting to adapt the world to himself.  Therefore, all progress depends on the unreasonable man.”

Why is exceptional progress more likely by using this unreasonable, backward method of creating strategy?  It is because the classic process only allows for, by design, incremental improvements.  You analyze the constraints of your current situation and say “Well, it looks like the best we can do is . . . . . ”  And that is usually some kind of slight improvement of what the organization is currently doing.  You know how people tell you to think outside of the box?  That is the box!  Constraining yourself by doing SWOT Analysis as the first step in strategic planning locks you in that box.  It places limits on your imagination.

If you want a breakthrough in your performance – in the mission impact you are making for those you serve – then try setting Vision and Goals that inspire you first.  Then look at your SWOTs and invent a creative Strategy that will allow you to pursue your dreams of making even more of a difference for those you serve.

For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.

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