SWOT: does anyone besides MBA professors and consultants use it?

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Recently I came across a research done back in 1997 that empirically proved that SWOT does not work! It seems that SWOT is promoted as a must-use business tool in any MBA program, and numerous consultants are happy to sell it and its derivatives, but the benefit for the real business is questionable.

I shared the results of the research and some thoughts on the topic in the new article and this presentation:
http://www.bscdesigner.com/swot-outside-mba-classrooms.htm

What do you think about SWOT? It is a must-have business tool or it is more an exercise for MBA students?

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  • What is your experience with SWOT? How did it help you with strategy planning?
  • What is your experience with SWOT? How did it help you with strategy planning?
  • SWOT: does anyone besides MBA professors and consultants use it?

    1. 1. IS THERE ANY BENEFIT OF SWOT OUTSIDE MBA CLASSROOMS? Based on http://www.bscdesigner.com/swot-outside-mba-classrooms.htm By Aleksey Savkin
    2. 2. BSC DESIGNER BSC STRATEGY MAP NEEDS AN INPUT • How are we supposed to get this input?
    3. 3. BSC DESIGNER BSC’ STRATEGY MAP NEEDS AN INPUT • How are we supposed to get this input? • How can one come up with a strategy?
    4. 4. BSC DESIGNER BSC’ STRATEGY MAP NEEDS AN INPUT • How are we supposed to get this input? • How can one come up with a strategy? • One of the business frameworks is SWOT analysis.
    5. 5. BSC DESIGNER Is there any benefit of SWOT outside MBA classrooms? Source: www.bscdesigner.com
    6. 6. BSC DESIGNER Is there any benefit of SWOT outside MBA classrooms? The best business insights are rather spontaneous breakthroughs based on the experience of my team. Source: www.bscdesigner.com
    7. 7. BSC DESIGNER Use SWOT analysis! It allows me to sell consulting services to any company without any learning of its products and service. Is there any benefit of SWOT outside MBA classrooms? The best business insights are rather spontaneous breakthroughs based on the experience of my team. Source: www.bscdesigner.com So what?
    8. 8. BSC DESIGNER Use SWOT analysis! It allows me to sell consulting services to any company without any learning of its products and service. Is there any benefit of SWOT outside MBA classrooms? The best business insights are rather spontaneous breakthroughs based on the experience of my team. Source: www.bscdesigner.com SWOT! So what?
    9. 9. SWOT AND ITS MODIFICATIONS
    10. 10. BSC DESIGNER THE VISUAL RERESENTAION OF SWOT ANALYSIS The SWOT acronym stands for :
    11. 11. BSC DESIGNER THE VISUAL RERESENTAION OF SWOT ANALYSIS Strengths and weaknesses are considered to be “internal,”
    12. 12. BSC DESIGNER THE VISUAL RERESENTAION OF SWOT ANALYSIS Strengths and weaknesses are considered to be “internal,” while opportunities and threats are “external.”
    13. 13. BSC DESIGNER TOWS - A DIFFERENT WAY TO PRESENT A different acronym of the same words - threats, opportunities, weaknesses, and strengths
    14. 14. BAD NEWS. SWOT DOSEN’T WORK
    15. 15. BAD NEWS. SWOT DOSEN’T WORK • At least not in a real business environment.
    16. 16. BAD NEWS. SWOT DOSEN’T WORK • At least not in a real business environment. • Authors of the research ”SWOT Analysis: It’s Time for a Product Recall” investigated SWOT empirically.
    17. 17. BAD NEWS. SWOT DOSEN’T WORK • At least not in a real business environment. • Authors of the research ”SWOT Analysis: It’s Time for a Product Recall” investigated SWOT empirically. • They interviewed executives of 20 UK manufacturing companies that used SWOT.
    18. 18. BSC DESIGNER THE RESULTS OF THE RESEARCH • SWOT analysis typically helped to generate a long list of various factors
    19. 19. BSC DESIGNER THE RESULTS OF THE RESEARCH • SWOT analysis typically helped to generate a long list of various factors • These factors in most cases were meaningless for a business
    20. 20. BSC DESIGNER THE RESULTS OF THE RESEARCH • SWOT analysis typically helped to generate a long list of various factors • These factors in most cases were meaningless for a business • Found factors were neither prioritized nor verified
    21. 21. BSC DESIGNER THE MAIN CONSEQUENCE • None of these companies used the outputs for a future strategy design • 20 UK manufacturing companies is obviously not a representative sample
    22. 22. BSC DESIGNER A CRITIQUE OF THE RESEARCH • Executives could not truthfully say that
    23. 23. BSC DESIGNER A CRITIQUE OF THE RESEARCH • Executives could not truthfully say that • They were not influenced in any way by the results of the SWOT-based brainstorming
    24. 24. BSC DESIGNER A CRITIQUE OF THE RESEARCH • If you will read an original article
    25. 25. BSC DESIGNER A CRITIQUE OF THE RESEARCH • If you will read an original article • You will agree that something is wrong with SWOT
    26. 26. BSC DESIGNER A CRITIQUE OF THE RESEARCH • If you will read an original article • You will agree that something is wrong with SWOT • It is not a magic pill like it is promoted by strategy consultants
    27. 27. WHY IS SWOT SO POPULAR THEN?
    28. 28. BSC DESIGNER INFO-PRODUCTS ON SWOT • The results of SWOT analysis for virtually any company from the Fortune 500 list
    29. 29. BSC DESIGNER INFO-PRODUCTS ON SWOT • The results of SWOT analysis for virtually any company from the Fortune 500 list • These reports were not prepared by the company’s executives
    30. 30. BSC DESIGNER INFO-PRODUCTS ON SWOT • The results of SWOT analysis for virtually any company from the Fortune 500 list • These reports were not prepared by the company’s executives • They have nothing to do with an actual strategy design process
    31. 31. BSC DESIGNER INFO-PRODUCTS ON SWOT • In most cases these reports work as front-end products
    32. 32. BSC DESIGNER INFO-PRODUCTS ON SWOT • In most cases these reports work as front-end products • They are supposed to attract the attention of prospects to some consulting business.
    33. 33. BSC DESIGNER INFO-PRODUCTS ON SWOT • In most cases these reports work as front-end products • They are supposed to attract the attention of prospects to some consulting business. • Consulting boutiques are the biggest beneficiaries of the SWOT magic pill
    34. 34. BSC DESIGNER SWOT AS A MAGIC PILLS FROM CONSULTANTS • SWOT analysis allows them to sell consulting services to any company without a deep learning of its products and service.
    35. 35. BSC DESIGNER SWOT AS A MAGIC PILLS FROM CONSULTANTS • SWOT analysis allows them to sell consulting services to any company without a deep learning of its products and service. • Consultants can focus on asking “right” questions and generating long lists of factors and ideas.
    36. 36. BSC DESIGNER SWOT IN MBA CLASSROOMS • SWOT analysis is popular in MBA classrooms
    37. 37. BSC DESIGNER SWOT IN MBA CLASSROOMS • SWOT analysis is popular in MBA classrooms • Lectures pay too much attention to SWOT in the classroom
    38. 38. BSC DESIGNER SWOT IN MBA CLASSROOMS • SWOT analysis is popular in MBA classrooms • Lectures pay too much attention to SWOT in the classroom • A result managers see SWOT as a panacea to any business problem
    39. 39. SWOT FROM INPUTS TO THE RESULTS
    40. 40. BSC DESIGNER SWOT INPUTS • It assumes that the business situation is stable enough
    41. 41. BSC DESIGNER SWOT INPUTS • It assumes that the business situation is stable enough • Another assumption is that inputs are supposed to appear during the brainstorming
    42. 42. BSC DESIGNER SWOT PROCESS • The SWOT analysis cannot be underestimated as a brainstorming method
    43. 43. BSC DESIGNER SWOT PROCESS • The SWOT analysis cannot be underestimated as a brainstorming method • SWOT doesn’t give us any method to make an informed assumption
    44. 44. BSC DESIGNER SWOT OUTPUT • As any brainstorming method, SWOT generates a list of ideas. • Another problem with SWOT outputs is that the resulting ideas are given in a list.
    45. 45. BSC DESIGNER AUTOMATION OF SWOT • There is no need for an automation of SWOT.
    46. 46. BSC DESIGNER AUTOMATION OF SWOT • There is no need for an automation of SWOT. • Using paper and pen to put down ideas that come up brainstorming
    47. 47. BSC DESIGNER AUTOMATION OF SWOT • There is no need for an automation of SWOT. • Using paper and pen to put down ideas that come up brainstorming • Users of BSC Designer can apply ”Framework – SWOT and TOWS.bsc” from “Sample Scorecards” folder of BSC Designer installation to support their SWOT analysis.
    48. 48. BSC DESIGNER AUTOMATION OF SWOT Find this project in “Sample Scorecards” folder of BSC Designer installation.
    49. 49. TWO MAJOR FLAWS OF SWOT
    50. 50. BSC DESIGNER TWO MAJOR FLAWS OF SWOT • Two words “customers” and “education.”
    51. 51. BSC DESIGNER TWO MAJOR FLAWS OF SWOT • Customer is not directly involved in this framework
    52. 52. BSC DESIGNER TWO MAJOR FLAWS OF SWOT • Customer is not directly involved in this framework • Education is a big deal of finding and “seeing” these opportunities
    53. 53. BSC DESIGNER TWO MAJOR FLAWS OF SWOT • Customer is not directly involved in this framework • Education is a big deal of finding and “seeing” these opportunities • This process should be run even before getting the team to brainstorm any ideas.
    54. 54. A BOTTOM LINE
    55. 55. BSC DESIGNER A BOTTOM LINE • The obvious benefit is that SWOT gives another perspectives to see the business and its environment.
    56. 56. BSC DESIGNER A BOTTOM LINE • The obvious benefit is that SWOT gives another perspectives to see the business and its environment. • This perspective works great for academic exercises in MBA classrooms,
    57. 57. BSC DESIGNER A BOTTOM LINE • The obvious benefit is that SWOT gives another perspectives to see the business and its environment. • This perspective works great for academic exercises in MBA classrooms, • but cannot help much with finding a better strategy in complex and uncertain real-life situations that business faces every day.
    58. 58. BSC DESIGNER A BOTTOM LINE • SWOT analysis depends a lot on the experience of the team that is using it.
    59. 59. BSC DESIGNER A BOTTOM LINE • SWOT analysis depends a lot on the experience of the team that is using it. • The framework provides a different perspective,
    60. 60. BSC DESIGNER A BOTTOM LINE • SWOT analysis depends a lot on the experience of the team that is using it. • The framework provides a different perspective, • but at the same time it shifts the focus from a customer.
    61. 61. BSC DESIGNER A BOTTOM LINE • The list of generated findings could have been much more useful if these insights could be linked to each other by cause-and-effect connections.
    62. 62. BSC DESIGNER A BOTTOM LINE • SWOT is a main academic tool used in the quest for a good strategy.
    63. 63. BSC DESIGNER A BOTTOM LINE • SWOT is a main academic tool used in the quest for a good strategy. • Executives will continue to use the method even if empirical evidence shows that it is not working.
    64. 64. BSC DESIGNER A BOTTOM LINE • SWOT is a main academic tool used in the quest for a good strategy. • Executives will continue to use the method even if empirical evidence shows that it is not working. • Hopefully, in good hands this business framework will generate some valuable insights.
    65. 65. BSC DESIGNER A BOTTOM LINE • What is your experience with SWOT?
    66. 66. BSC DESIGNER A BOTTOM LINE • What is your experience with SWOT? • How did it help you with strategy planning?
    67. 67. BSC DESIGNER • [1] “SWOT Analysis: It’s Time for a Product Recall” Roy Westbrook, Terry Hill (1997) Long Range Planning, 30 (1). • [2] “Stop SWOT’ing The Small Stuff” Dave Lavinsky, 2013, Forbes • [3] “Marketing Myopia” Theodore Levitt, 1960, Harvard Business Review. RESOURCES
    68. 68. BSC DESIGNER MORE ABOUT THE BALANCED SCORECARD Find more insightful articles about the Balanced Scorecard in ”Articles” section at www.bscdesigner.com BSC DESIGNER
    69. 69. BSC DESIGNER THANK YOU! Feel free to send us your questions using the contact form at www.bscdesigner.com

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