A SWOT analysis is one of the best-known problem-solving tools. This article presents some ideas on how to avoid the most common mistakes made in SWOT analyses, which are based on my own experiences as a management consultant and trainer.
What is a SWOT analysis for? It can be used for strategic management, marketing, personal development, or anything else. For example, you can do a personal SWOT analysis of your organization. Partnered with a case study, it’s an effective tool for improvement.
Common First Mistakes: Mixing Things Up
The most common mistake on how to do a SWOT analysis is to include too many issues. A SWOT analysis has four quadrants that have to be filled with at least two items each. One of these items is usually a strength. The other one is always a weakness or a threat, but not both.
These are the most common mistakes with the usual SWOT analysis template:
Weaknesses are only listed as ‘Opportunities’. For example, “Shortage of staff is an opportunity because it means that employees will stay instead of leaving.” This idea is faulty because opportunities are things that you want to do, not things you have to deal with.
Weaknesses are only listed as ‘threats’. For example, “Shortage of staff is a threat because it will decrease the profits.” This idea is faulty because threats are things that you don’t want to do, not things you have to deal with.
Strengths are listed as ‘threats’. For example, “We have a strong brand” is seen as bad because it makes it more difficult to change. This idea is faulty because threats are things that you don’t want to do , not things you have to deal with.
Weaknesses are only listed as ‘opportunities’. For example, “We have a weak brand” is seen as good because it makes it easier to change. This idea is also faulty because opportunities are things that you want to do, not things you have to deal with.
Weaknesses and threats are mixed up. For example, “Poor staff loyalty is a threat because it decreases profits.” This idea is faulty because threats are things that you don’t want to do, not things you have to deal with.
Mistakes In The Second Step
The second step is to consider how these issues affect each other. For example, what happens when there isn’t enough staff? The third step is to decide what the consequences could be. For a SWOT analysis example, “Profitability will decrease.” The fourth step is to decide what can be done about it.
The most common mistake with this step is not considering all possible consequences of each issue. For example, if a brand is seen as weak, the consequence may only be that you have less influence over your sales partners. This is a logical consequence, but not the only one. Other possible consequences are that you have to invest more in marketing, or that your employees don’t take pride in their work because they think there isn’t a good future with the company. The best way to avoid this mistake is to look at all four quadrants and come up with as many consequences as you can.
The third and fourth steps are often combined into one step: considering all possible courses of action. For example, “Hire more staff” is a course of action for dealing with not having enough staff. The most common mistake in this step is only listing the first course of action that comes to mind, without considering alternatives. For example, “Hire more staff” is a course of action to deal with not having enough staff. But it is probably not the best one because you can also train your employees better or let them work from home instead of hiring new ones.
Mistakes in Combined Steps
The third step is often combined with the second step as well: considering how these issues affect each other. For example, if there isn’t enough staff, this may cause the profitability to decrease. The most common mistake in this step is considering only one issue at a time. For example: “If we don’t have enough staff we will lose money.” This idea doesn’t consider what consequences it may have for your brand and your influence over your sales partners. The best way to avoid this mistake is to consider all possible consequences, one at a time.
In the end, your SWOT analysis needs to be as complete as possible. Use all four quadrants and make sure you come up with consequences for each issue. Make sure the consequences of each issue affect each other and make sure you consider all alternatives when coming up with a course of action.
If you need tools to make a SWOT analysis presentation,
In Summary
A SWOT Analysis can help you make better business decisions when everything seems fine, or when there are problems that you want to solve or opportunities that you want to take advantage of. To make sure you’re doing it right, avoid these mistakes.
