SWOT analysis - the AK47 of strategy tools

Discussing an upcoming strategy workshop with a new client recently, they said they wanted to use SWOT as one of the key tools.  SWOT analysis is an almost universally known strategy tool, but - for those who don't compulsively collect strategy tools - it's simply a listing (usually in a 2 x 2 grid) of an organisation's Strengths, Weaknesses, Opportunities, and Threats.   It's basic, sometimes seemingly too basic.  It's the AK47 of strategy tools - widely used (particularly by organisations that can't afford the latest and greatest), robust, can be used  with almost no training. Plus, it's surprisingly effective. And, a bit like the AK47, it's been around for a while: SWOT analysis, or perhaps an early precursor to it, was developed in the 1960s by Albert Humphrey, an American consultant who eventually moved to London (I gather for love, like so many other good consultants).

As I was opening my mouth, getting ready to explain to my client that we really might want to try something a bit more modern, and a bit more sophisticated, I stopped.  In a flash, two thoughts struck me: 1) If sensible business leaders have been using it for so long, and so widely - particularly in organisations, like this one, that didn't have the luxury of faffing about things that don't work - it must be good.  2) When I've used it, even when I didn't expect much from it, it always was useful.

After the meeting I thought for a bit about why it is so effective, when lots of other strategy tools have come and gone.  It focuses attention on  the "here and now" reality of the situation a business faces. And, it covers the waterfront.  It focuses attention on external and internal issues, it focuses attention on the positive as well as the negative.  Organisations often have a bias to focus more heavily on one end or the other of these dimensions; SWOT highlights where there might have been insufficient attention.

But, perhaps most importantly, it stimulates useful discussion and debate. When it comes to strategy, it's generally not the facts that matter.  The interpretation of facts - what they mean and what, therefore, should be done about them - is where the real value lies.

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