I’m Carrie Staller from team OVEL. One of the most important steps in developing a strategic plan is conducting an internal analysis of organizational strengths and weaknesses as well as an external analysis of environmental opportunities and threats. This is called a SWOT analysis.
Contrary to what you might have heard, a SWOT is not a strategic attack on an enemy, although its name sounds menacing. SWOT analyses help clarify best strategies by matching a company's resources and abilities to the competitive environment in which it operates.
I would like to challenge the acronym SWOT, and propose instead SWOB, replacing threats with barriers. To me, this is a more inclusive word which more closely matches the psychology behind sustainability supporting collaboration for the greater good as opposed to threats, which implies separation and competition.
A SWOB takes a sample of the culture of an organization with the intent to understand what may or may not grow from that sample. The information gleaned helps shape organizational strategies and direction.
The SWOB begins with an internal focus that ranks strengths and weaknesses by examining a cross section of the firm which includes marketing, finance, manufacturing and organization. It’s a good idea to do this part with a team people to see if everyone is on the same page.
Each category is ranked on a spectrum ranging from major strength, minor strength, neutral, minor weakness, and major weakness. Then, each section is labeled low, medium or high priority. Major strengths and weaknesses that are also high priority should be given extra attention.
The first category is marketing which includes company reputation, market share, customer satisfaction and retention, product or service quality, effectiveness of pricing, distribution, and sales force, innovation and geographical coverage.
Finance looks at the cost, or availability of capital, cash flow and financial stability. Clearly, this category is highly influential, because passion can only go so far without capital to support it.
Manufacturing looks at operations and includes facilities, potential for economies of scale, capacity, if there is an able and dedicated workforce, the ability to produce on time, and the technical manufacturing skill of the firm.
Organization examines if the leadership has a strong visionary who is capable of creating momentum as well as the dedication of the employees, and how entrepreneurial, flexible and responsive the organization is.
I would also suggest adding the category of our favorite topic, which could include energy and water usage, benefit to society, environmental impact, carbon footprint, emphasis on wellness, closed loop waste stream design, and stakeholder engagement.
After the internal analysis is completed, the focus must turn outward to examine what macroeconomic forces and microenvironmental factors are affecting potential opportunities and barriers to progress.
One opportunity, which may seem obvious, is to provide something that is in short supply. Understanding trends can help prepare organizations to take advantage of these situations where there is a well-defined need. Loosened regulations can create temporary windows of opportunity here as well.
Additionally, a company can supply an existing product or service, but do so in a new or improved way such as more convenience, improved information, more rapid delivery, lowered price, new features, or customization.
Firms can use the problem detection method, which asks users what they like and dislike about a product or service, and how it can be made better. Designers do their best to imagine how consumers will use their product, but rarely are they able to anticipate all the uses and misuses.
They can also use the ideal method, and ask consumers to get creative about what their ideal version of a product or service would be. By engaging consumers, research and design teams will be able to use this information to improve newer models of their products.
Firms also utilize the consumption chain method assisting users in mapping their process in acquiring, using, and disposing of a product. Sometimes this process can lead to an entirely new product idea. This phase is also ideal for uncovering places to create closed loops.
The firm must then look at what barriers might inhibit their progress such as the emergence of substitute goods, or unfavorable trends that would lure consumer tastes away from their products. Coopetition possibilities can also be uncovered here.
The government can also impact barriers by creating new regulations or increasing trade barriers. If policy change potential is not factored in, a lot of resources could be wasted on product planning that will never be realized.
Each of the quadrants of strength, weakness, opportunity and barriers are of vital importance to the process of articulating specific and measurable goals. These goals will be the building blocks of the strategic plan and can provide valuable insights for your EL partners and all your future endeavors. Thank you.
Developing a Strategic Plan for Sustainability: SWOT Carrie Staller, Team OVEL