The pros and cons of a SWOT Analysis

1. A SWOT Analysis on the SWOT Analysis
by David Patrishkoff President E3 & ICER
Email: davepatrishkoff@eeefficiency.com
A classic SWOT (Strengths, Weaknesses, Opportunities & Threats Analysis) is usually considered as a
good start for further Strategic Planning efforts and analysis. A strong SWOT can be a good foundation
for subsequent strategic planning efforts. A Disruptive and Cascading SWOT can re-position the whole
Strategic Plan to seriously pursue Disruptive Innovation. A great strategic plan should not just be about
beating the competition at their game, but about redefining the game as no one has done before you.
The Hyper-connected and Cascading behavior of Global Risks
The World Economic Forum (WEF) publishes a Global Risk report since 2006. They plead the case that
the more inter-connected our world becomes via a globalized economy, social media, the internet, etc,
the more vulnerable the whole world is to any weak links in the system. Their reports include constant
references to the inter-connected risks that can cause global system breakdowns. Their descriptions of
the potential threats include combinations of slow-building and creeping risks that are hyper-connected,
capable of linking to create unforeseen and high energy cascade effects that can create tipping points
into a perfect storms with high local and even global fallout.
The Hyper-connected and Cascading behavior of Internal Risks
My independent research into the causes of historical disasters, which started in 2004, has identified
certain cascading principles and mechanisms of how the combined effects of underestimated internal
risks can wreak havoc and self-destruction even without the help of external forces. If your SWOT
ignores the cascading and hyper-connected nature of internal and external risks, your efforts could be
futile. Too often risks are assumed to approach from over the horizon from the outside. This mindset
ignores the fact that most organizational failures stem from internal risks and a dysfunctional work
culture. The triggers of such havoc can emanate from the top of the organization and quietly ripples
through the organizational cascades to create undesirable events.
A SWOT Analysis on the SWOT Analysis
A SWOT analysis is a mini-risk assessment and mitigation brainstorm tool. However, Its strengths will
become weaknesses if the assessments are superficial. If the SWOT is reconfigured to meet the realities
of a hyper-connected and cascading world, this tool can be very insightful.
What follows is a short SWOT analysis on the SWOT analysis tool to assess its capabilities to pursue true
Disruptive Innovation. This exercise can be viewed as a self-diagnostic of a SWOT:
Strengths:
• It’s simple and easy to understand
• Helps you identify and understand challenges and opportunities
• Can be used to develop a robust action plan
• Concentrates on the most Important factors
Weaknesses:
• Its simplicity will not always prompt its users to go deep enough to make its analysis meaningful
• It does not prompt its users to investigate hyper-connected risks that can cascade and ripple
through an organization in a destructive manner
• It does not prompt its users to investigate slow-burn / slow failures (aka creeping risks) that can
build up over time and create tipping points into a perfect storm of unintended consequences

2. • It does not prompt its users to solicit true and candid cultural perceptions and threats for all
employee levels
• It will not lead to Disruptive Innovation in its basic form
Opportunities:
• Invigorate the classic SWOT into a Cascading SWOT to match the way in which the world and
modern organizations actually operate
• Identify hidden threats and uncomfortable and unspoken talk rules
• Include assessment of internal Leadership gaps
• Include factual assessments of cultural health of the organization
• Include assessments of internal process inefficiencies and risks in key business processes
• Assess the quality of your business metrics
• Assess the organization's responses to critical situations
• Assess how your organization learns from its mistakes and makes the necessary changes
• Assess the internal and external customer satisfaction levels
• Include a "Points of Pain" assessment as perceived for various levels of employees
Threats:
• The assumption that the SWOT-KISS (Keep It Simple Stupid) is alive and well in the complex and
cascading world in which we live
• It can misdiagnose luck for skill, the organization will be ill-prepared for adverse events
• It assumes that if you ask fellow employees for inputs that they will tell you the whole truth,
without fear of punishment
Summary of the SWOT Analysis on the SWOT Analysis
A good SWOT should be provocative and assess the sensibility on your own strategies, track your efforts
to solicit and address internal taboo talk rules, monitor employee frustration levels and assess your
internal culture's momentum towards success or failure. Most importantly, do not forget to gather
multiple perceptions on the above opinions from Leadership, mid management and non-management
employees. If the perceptions are vastly different, determine why the same people under the same roof
are describing the same company in very different manners.
Transforming the SWOT into the foundation for Disruptive Innovation
It must be stressed that an energized SWOT is only the foundation of a good strategic plan. It is not the
final analysis or strategic planning tool. The annual corporate strategic planning cycle is usually time
consuming, interactive and it must get off to a good start with the right tone if anything of value is to be
expected of such efforts.
SWOT Expansion to include Internal Cascading Risks
The biggest opportunities to achieving strategic objectives lies in the ability of leadership to identify,
assess and manage the internal cascading connections and cause and effect relationships that exist. The
main areas of internal hyper-connected top-to-bottom cascading elements and loops include:
• Leadership strategies, attitudes & behaviors
• Cultural behavior
• Process efficiency
• Performance outcomes
• Responses to shortfalls in performance metrics
• Feedback loops to leadership that are either incorporate lessons learned or ignore such lessons,
which offers the next cycle of adverse events the opportunity to sink the ship

3. Each of the above mentioned elements of internal cascades should be SWOTed separately with candid
and honest inputs from all levels of employees (See graphic below). Embracing such logic allows Leaders
to create a Cascading Strategic Plan that can energize the organization instead of just addressing the
symptoms of issues with sugar coated Power Point slides or adding a fresh coat of paint to the Titanic
while it is sinking.
Figure 1. Each element of internal cascades should be SWOTed separately with
candid and honest inputs from all levels of employees
SWOT Expansion to include External Cascading Risk Assessments
External risks need to be listed, rated for interconnectedness and assessed for their impact and
likelihood of impacting the business. This offers a good start for subsequent strategic risk management
efforts. The World Economic Forum's annual Global Risk Report offers a good reference to use as a
starting point for possible risks to consider. Separate SWOT analysis should be carried out for the 6 main
areas of global risks:
• Economic
• Environmental
• Geopolitical
• Societal
• Technological
• Real-Time Feedback loops to Leadership on the status and changes in global risks
Conclusion
Organizations and the world are hyper-connected communities that are exposed to threatening invisible
cascade, ripple and domino effects. Today's Risks can easily leap past national borders, firewalls and
other security safeguards and trigger very unexpected circumstances that can threaten the reputation
and existence of the business. Modern applications of the SWOT analysis should consider this complex
and cascading nature in which the world now operates. A thorough SWOT Analysis can be a good start

4. for any level of Strategic planning, including the ultimate wish of any organization, which is to create
disruptive innovation and value that will ignite the passions of its employees and customers.