Improving Business Performance by Achieving Understanding: A Discussion

New and Developing ways of "Understanding" before you Act or Decide

SWOTt and Often Disastrous Consequences

The objective of a planning process, in marketing or elsewhere, is typically to pick the most worthwhile goals and figure out how to get there in the most efficient way possible.  Usually,  the most significant barrier to effective  planning for many is  oversimplification and basing decisions on assumptions and "feel-good" information that has no or little relation to reality. This leads to really bad decisions and I believe is a primary reason that statistically, most  businesses and plans fail.    An effective planning process needs to be based on inter-relating significant amounts of accurate, timely and appropriate  information together from within (company competencies, culture...) to the main outside focus(the customer) to the key influences from the external environments.  

When a SWOTt is assembled ad hoc  without research or without careful consideration of current reality (as it all too often is) , it is usually nothing more than a bunch of unproven, typically outdated and misleading assumptions rather than a summary of accurate up to date information as it needs to be. SWOTt is often the main vehicle for distortions and delusional thinking in business planning because it's an easy way to legitimize old outdated assumptions, other poor quality information and top of mind thinking.   It looks good all organized on the paper into categories and because key managers had input, it must be true... Dig deeper and you find it's a tool that keeps old assumptions going and garbage in creates garbage out.

SWOTt means a lot of things, some of the more intelligent ones may be here: SWOT in the Urban Dictionary

Beyond that, with regard to business, Swot/Swott was conceived over 50 years ago as a simple tool to summarize the most important aspects of the situation analysis. The situation analysis is the sum total of information you need to make decisions (choosing best goals, developing an effective vision, figuring out steps to get there, understanding what you can measure that shows progress etc…) in a significant area. A situation analysis includes the details on looking in (company/you), looking out (customer) and looking all around(the external environments: economic, political, legal, technological, cultural…)

Like other acronyms, rules of thumb and simplifications of reality, SWOT/SWOTT  is more often than not misused because it is not backed up by a substantial research effort given how fast the world changes and human nature which often locks us into our outdated assumptions… I would argue usually worse than doing nothing at all when it is a starting point because in that case, it is normally a set of incorrect assumptions and wishful thinking that is then relied upon to do strategies which gives it further credence and like any vicious cycle ends in disaster. As a consultant, I've seen the situation analysis summary, the Swott, misused more often than not.  The key issue is that  when SWOTT is used in the business, government or non-profit segment, it is usually the basis for the key strategic ideas that will be deployed and it's another case of garbage in, garbage out way more than it should be.

When out-dated assumptions, delusions and self-promotions (business managers in the SW section use it to promote their own skills to their board which reviews the strategic planning process but rarely are these assertions real but they become disastrous when used to make strategic decisions) in the SWOTT to fill out the space and make it look legitimate and "powerful as most organizations have some type of board or advisors that they run things by.

SWOTT is an excellent tool when it is used to summarize an intelligent and thorough research effort that includes self evaluation, customer and potential customer evaluations and the potential influence from all external areas.   When done in this way, it is not only a good vetting mechanism for key strategic ideas, it is also often the creative source for new lines of thinking and of strategy.

The Ultimate Management Tool, What is it?What if you could design the ultimate management tool - Would it help select / hire the best?What if you could design the Ultimate Management Tool? Would it help Engage and Motivate your People?The Ultimate Management Tool? Would it help you retain them?The Ultimate Management Tool? Would it help you Develop them optimally?What would your Ultimate Management Tool consist of?What would your Ultimate Management Tool consist of?If you accurately understand then you can...Execute Optimally with accurate understanding / Execute poorly with misunderstandingHATS: Perhaps, the Ultimate Management Tool

"The U.S. Department of Labor has estimated the costs to replace an employee to be approximately 1/3 their annual salary; but when you start looking at the impact of hiring the wrong employee and having to replace them, some studies say 2.5 times annual earnings, some 4 times and some even higher." AGILEdge