THE TOOLKIT OF THE DECISION MAKER #1: The SWOT Analysis
05-02-2021
Do you have an exciting idea for your organisation and need a simple and swift method to assess its robustness? Or maybe a decision needs to be taken but the situation seems unreadable with too many variables to consider?
The SWOT matrix is a tool for decision-makers willing to clarify a strategic environment and settle on a decision, conceptualize a project or overhaul the positioning of their organisation.
Developed by four Harvard Professors in the 1960s, SWOT stands for strengths, weaknesses, opportunities and threats. Its simple design helps to organise data into four categories and better visualize the environment of the decision-maker. SWOT revolves around three key questions: What are the project strengths and weaknesses? What contextual factor could act as its springboard? What are the lurking threats ready to hinder its success? SWOT depends on a straightforward methodology: identification. That of external and internal factors. This is SWOT’s innovation: the matrix considers the strategic environment as critical for efficient decision-making.
Simple, the SWOT analysis sorts the strengths, weaknesses, opportunities and threats into two categories: internal factors and external factors. The latter, embedded in the organisation, are within the control of the decision-maker: he can act on them. Contrariwise, external factors originate from a strategic environment, they are out of the decision-makers reach, the leader has no capacity to have an impact on them. One crucial point: the externality of a factor is no excuse for inaction: opportunities need to be seized and threats to be acknowledged or neutralized.
How can we differentiate a weakness from strength and a threat from an opportunity?
Strengths reinforce strategic positioning. For instance, an organisation can be proud of its IT skills and direct them for the realization of a project improving digital education. A weakness per contra weakens a strategic positioning. Maybe an organization’s workforce does not speak English: it reduces the ability to tie partnerships with international NGOs or actors.
Concerning opportunities and threats, the dissimilarity lies in the value of their impact on the organisation, decision or project. If they impact or can impact them positively, then, an opportunity is identified. If a factor impacts or risks impacting them negatively, then one should beware of the threat.
The purpose of the SWOT matrix is clearer: it makes it possible to swiftly assess the factors which modulate a decision, a project, an organization’s competitive positioning. Thus, it facilitates strategic.
How can we identify relevant factors ?
Data is key. Crucial to evidence-based decision-making, data will make the SWOT analysis’ outcome more robust. If SWOT’s swiftness is attractive, it still needs to be included in a process where data collection comes first. Through it, the decision-maker will gain a solid knowledge of its strategic environment.
Step 1: Internal factors’ data collection. The gathering should focus on the internal functioning of the organization, while relying on the team’s assessment of their own strengths and weaknesses. If no data is yet available, a survey or audit might be needed, but such tools are costly and lengthy. Examples of strengths/weaknesses can refer to performances in communication, accounting, digital literacy, innovation … If the SWOT matrix evaluates a project, then, factors must be as specific as possible. A reminder: to collect data the decision-maker needs smart indicators (specific, measurable, attainable, realistic and timed).
Step 2: External factors’ data collection. The assemblage of the data can be continuous, with media alert or competitive intelligence. For instance, if one Digital Education NGO wishes to develop a project on IA in Education with webinars and workshops, the team must gather data relevant to ICTs (information and communication technologies) such as public policies, the economical context, the demographic evolution, the digital literacy, the access to ICTs and ICTs skills, the area’s connectivity … If targeted audiences have no access to ICTs, then, the project is rendered obsolete. More subtly the project may heighten disparities if this area is characterized by high rates of gender digital divide. An aspect the decision-maker must be wary of is competitiveness. If a similar project has already been developed, maybe they should rather innovate and build on the previous iteration. The legal context is an additional crucial external factor, as well as public policies and governance. Thus, a fund offered by national ministries can constitute opportunities.
Step 3: The SWOT matrix. Here lies SWOT’s strength: reading this diagram, one can understand, at a glance, the strategic environment of a project, a decision, an organisation.
How to move forward?
The last step is strategic planning. It draws from the dynamics between each factor. A strength may answer to a threat, a weakness could be overcome by the potential of an opportunity. The SWOT does not equal a strategy, it can still be a stepping stone towards the conceptualization of a project, decision making or the overhaul of an organisation, its adaptation to a context that never stands still.
Indeed, as a simplification of a situation, SWOT remains rough, incomplete. External factors can bleed into the opposing category. An opportunity can turn into a threat if seized by a concurrent organisation… Moreover, in SWOT, factors are not ranked, it risks leading to excessive resources spending on superfluous threats. By putting on equal footing weaknesses and strengths, opportunities and threats, SWOT may nurture the decision-maker’s overconfidence or underconfidence, clouding their rationality.
SWOT does not put enough emphasis on data collection, on its methodology, despitefully relying on its conclusions.
As such, tune in next week and learn how to select relevant data and become an efficient decision-maker with the SMART. Before that, check the Group of European Youth for Change’s (GEYC) Project Management Academy, where you will find quality resources on the implementation of project activities.
Additional resources on SWOT:
A deeper dive into the SWOT matrix:
A SWOT analysis case study:
On the limits of the SWOT analysis:
SWOT templates: