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The Essential Guide To SWOT Analysis: An Interview with Jackson Hille

Posted in Business Strategy

Jackson Hille is a Content Associate for FormSwift, a SaaS startup that focuses on providing customizable personal and legal templates to small businesses and nonprofits. He is a recent graduate of the University of California, Berkeley, having been awarded the 2013-14 Departmental Citation in American Studies. He came up with the idea for The Essential Guide To SWOT Analysis when he was given an assignment to perform a similar planning exercise at work. While trying to devise a SWOT analysis, he realized there were no all-encompassing step-by-step SWOT guides readily available on the internet, so he contacted one of his college mentors, Justin Gomer, a Lecturer at UC Berkeley and soon-to-be author of two books, to see if they could come up with truly comprehensive guide to SWOT analysis.

Their end result is accessible here: http://formswift.com/swot-analysis-guide. This guide is completely free, intended to be accessible to everyone who needs help planning for his or her career or business. It also includes two SWOT templates so you can conveniently put your SWOT ideas into motion.

In your SWOT guide you discuss how SWOT analysis should be used to “stretch” and not to “fit”. Could you elaborate more on this distinction?

SWOT analysis could be misused as a means of justifying business decisions by highlighting the strengths and opportunities and ignoring the weaknesses and threats. This would be characterized as a “fit” as the business is not truly challenging anything, and merely filling out a static mold. Instead, a “stretch” would be achieved by a business that analyzes its weaknesses and threats just as comprehensively as they do their strengths and opportunities. By venturing out of their comfort zone the individual or company can then thoroughly determine where extra investment must be placed to expand their operation and stretch their limits instead of conforming to them.

You discussed the internal and external factors in a SWOT analysis. How do you believe these criteria play off each other and should more “weightage” be given to one of these factors in relation to the other?

It is essential that the right balance be made between the external and internal environments in a SWOT analysis. Typically, people tend to pay more attention to the internal benefits as they are more readily apparent and they require less engaged thought than external ones. Similarly, it is easier to myopically focus on the company you work in rather than predict the actions of the competition where implicit judgment might be necessary.

Applying the appropriate amount of analysis for both external and internal factors will present the opportunity to plan ahead as if the actions of the competitors have been made transparent. A proper SWOT analysis will therefore bypass reactionary planning and foster future mindedness and will accentuate the company’s strengths in a competitive environment.

How difficult is it to implement the ideas generated by SWOT?

The largest difficulty in using SWOT is deciding who is in the room for the SWOT analysis. In other words, the people who are present for the analysis may not be the most equipped or informed to make certain decisions. If the SWOT analysis is specific to a particular department or the company is relatively small, then everyone can partake in the brainstorm and thus implement it more thoroughly. However, often if the management of the company are the ones to perform the SWOT analysis then there might be a problem of asymmetric information between the workers and the executives over what is reasonable or not. If proper communication is not apparent it can lead to confusion between higher-ups who have big picture plans and the others who are more specialized in their jobs.

It is also comparatively easier to address weaknesses within a company than actively solve them. For instance, business cuts might be difficult to implement even if they are integral for future success. Likewise, it is difficult to invest in and further develop strengths when it is more tempting to patch holes and weaknesses elsewhere. It is not intuitive to build on strengths when you think you have more pressing weaknesses. Yet it may be superb strengths that can carry your business in the marketplace. It is therefore difficult to completely implement every idea generated through SWOT analysis without a full buy-in from your company’s entire planning and development teams.

You mention how SWOT can be used by tech startups and small businesses as well. Is there a certain stage in the growth of company when SWOT would be especially effective?

There are 2 stages where SWOT analysis would be particularly useful for a company. The first is at the height of growth — the saturation point where the company is running fluidly but has peaked. SWOT could be utilized to identify and subsequently invest in strengths, a frequently overlooked strategy. Of course, SWOT could still be used to minimize perceived weaknesses and external factors as well. The second stage is when a company is losing growth and regressing. SWOT evaluates the immediate weaknesses and threats that need to be addressed and forces a reexamination of strengths and a search for new opportunities. In both cases SWOT analysis is applied to shake your business out of complacency and strive for excellence, even if the company is already doing well.

You bring to light how some view TOWS as more effective than SWOT. Can you provide us with any examples of when this might apply or when TOWS might yield better results?

The TOWS analysis would be more applicable to fledgling organizations that are still either not established yet or still in the beginning stages of growth. This early on in the process, it is hard for a company to identify their internal components as they do not have enough empirical evidence or data yet to accurately analyze their strengths and weaknesses. Therefore, it would be more useful for these organizations to first address their opportunities and threats, and then brainstorm their potential strengths and weaknesses based on their environment and competition. TOWS would grant the organization the ability to plan for their strengths and weaknesses by modulating them to the opportunities and threats of the market or setting.

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