No one saves us but ourselves. No one can and no one may. We ourselves must walk the path. – Buddha
There are a few problem structuring tools that are so familiar that we simply assume we know how to use them.
This often isn’t the case.
They are powerful techniques – that’s how they became popular in the first place – but if we use them in a careless way we don’t make full use of their power.
One of these techniques is the SWOT analysis – where you reflect on your strengths, weaknesses opportunities and threats.
It’s a basic model that you learn well before business school – the kind of model you bring out whenever you’re trying to think through a new project.
In this section I’m going to revisit the SWOT analysis and try to see if we can deepen our understanding and use of the tool by being more specific and critical of what we focus on as we do the analysis.
What are your strengths?
Imagine that we’re testing whether a business idea has potential – that’s the kind of place where a SWOT analysis comes in useful.
Let’s start with why this business idea is a good one for you to do – what is it about you that is going to help.
These are your strengths and you should list them in the first quadrant of the SWOT matrix, as above.
This can be surprisingly hard to do.
If you ask someone to list their strengths they’ll probably come up with things like their experience, their qualifications and their personal qualities.
Something like 10 years work experience, an engineering degree and hard work.
And then they start to run out of things to say.
Now, are these strengths?
Well, the thing to notice is that they aren’t too different from what anyone else in the same situation might say.
If you’re going for a job or trying to win a client – everyone who is in the running has the qualifications, experience and personal attributes – you wouldn’t get shortlisted if you didn’t.
So you have to look deeper, draw on the factors that set you apart.
Look for proof points – what results did you achieve, how much revenue did you bring in, how many clients did you add, what volume of work did you do.
When you’ve been involved in a billion pounds worth of transactions you’ve probably learned a few things along the way.
The other source of strengths are the things you are obsessed by – what is it you do on which you spend more time and effort than almost everyone else?
That’s the thing that’s most likely to set you apart.
Circle those strengths – and keep them in mind as you carry on through the process.
What are your weaknesses?
People hate admitting that they have weaknesses.
The classic interview coaching response to this question is, “My greatest weakness is that I don’t know when to stop working.”
You might lie on an interview, but you shouldn’t lie to yourself.
There are some things that you are just not going to be good at – things you don’t like to do.
They are things that you avoid doing and so you practice them less and so you’re not as strong.
Maybe it has to do with managing others, or keeping up with administrative paperwork.
Look hard at your weaknesses because quite often they are simply the counterbalance to your strengths.
For example, if you are a creative person who spends the majority of their day engaged in focused creative activity – you probably don’t have time to file away documents and do the garden.
It’s your focus on creative excellence that means you are weak at administrative excellence.
A weakness simply means it’s a job you should give someone else to do.
If you are clear about your own strengths and weaknesses, you’re now ready to look around and examine opportunities and threats.
What are the opportunities you have?
When you look around and see booming businesses it’s tempting to think that there is opportunity everywhere.
Surely you can make the next Facebook, Google or Amazon?
What’s stopping you from making a killing in the property market?
With all these people making money on YouTube what’s stopping you from achieving passive income and financial freedom as well?
If you’re asked to list the opportunities out there you might easily put down technology, property and finance.
That’s where most fortunes are made, after all.
But what you also have to work out is whether that opportunity is one that’s going to work for you.
If it’s the right opportunity it’s like a greased slide, you’ll be able to get on and gravity will be on your side.
So you have to look hard at your list and think about why you’re going to be able to develop those opportunities.
Do you have a background in property?
Do you understand finance or technology – are you an analyst or a coder?
Just because you can see other people making money from an opportunity – it doesn’t mean that those are the only ways to succeed.
In fact, it’s more likely that there is a way for you to succeed that you are perfectly positioned for.
Maybe it’s a change in the market, maybe it’s a job that others find hard to do, maybe it’s something you’ve developed for your own use that could be useful to others.
Rather than looking for opportunities, what you need to do is think about how you can develop them – using the strengths at your disposal.
Opportunities are not things you find – they are things you create.
But in order to develop them you have to do one last thing – remove risk.
And you do this by analysing the threats you face.
What are the threats?
As with the other three categories it’s easy to list threats in a vague and general way.
You might be threatened, for example, by bad customer feedback, cash flow problems, late payments from customers.
These threats might cause you to trip, make mistakes, cost you money.
But there are two elements to a threat – the first is the impact it has on your business and the second is how likely is it to happen.
The less you understand about your business, the more likely it is that you will make mistakes you can’t recover from.
It really comes back to knowing where you’re strong and where you’re weak – and being clear about what opportunities you pursue as a result.
If you’ve got those first three elements lined up, then the last job you have is identifying and eliminating threats.
It’s risk management, really – if you’re climbing a steep hill with loose rocks – start by asking yourself whether you really need to do the climb at all.
Why not go around, get a cab or hire a helicopter.
But if you have to climb it wear good footwear, take some equipment to help and have a plan in case you run into trouble.
There are some threats you can’t do anything about – the weather, the electricity network.
So you only focus on the threats that you can do something about – the ones you can mitigate.
And by doing that you’re dramatically increasing the overall chances of success you have.
The key is being specific
A SWOT analysis is least useful when it’s done in a quick and lazy way – when you fill it with the first thoughts that come to mind.
What you need to do is sit there and keep writing until the second and third thoughts come to you.
Draw, doodle, do anything but keep that pen moving until you get down more ideas than the ones that come immediately to mind.
Be critical of what you put down – ask yourself whether they are really different from what anyone else would say – are you drawing on what is your own unique experience or is this something anyone could put down?
The purpose of the exercise is to deepen your understanding of yourself and the situation you are in.
Armed with this knowledge you can start to move on to understanding the next part – seeing yourself in context and figuring out how to play nicely with others.
We’ll talk about that next time.