Encyclopedia of Leadership

CHECKLIST OF POSSIBLE PLACES TO LOOK FORSWOT ITEMS

This list could go on forever. A creative piece of strategy clarification is to isolate the criti-

cal few. This checklist will definitely need refinement—a large corporation would use quite dif-

ferent factors from a non-profit; an executive group would use quite different factors from a

small professional services team. [If the information is overwhelming, you may wish to use

some data organization technique like ☛7.8 Affinity Diagrams or 10.11 Priority Setting.]

An effective SWOT, and the subsequent strategy, are closely related to what Peter Drucker

calls a “Theory of Business Specifications.” Drucker specifies four interlocking elements.

HOW TO USE THIS LEADERSHIP TOOL

“...ignorance of an organization’s past can undermine the development of strategies for its future.”

Henry Mintzberg et al., STRATEGY SAFARI

If a strategy is not based on good data, internal and external, it will probably fail. The old

maxim of computer programming, GIGO—garbage in, garbage out—applies equally well to

SECTION 3 TOOLS FORSTRATEGICTHINKING 77

❑ Financial Resources:

− debt

− liquidity

− reserves

− investment

− effect of inflation

− expected economics

❑ Costs:

− overhead

− production costs

− supplies

❑ Profitability

❑ Investor Confidence

❑ Products/Services:

− product life cycle

− growth

− market share

❑ Product/Service Mix:

− breadth

− spin-offs

− focus

❑ Product Quality

❑ Competitiveness

❑ Production

Capability

❑ Technology:

− up-to-date

− leading-edge

− R & D

❑ People:

− current capabilities

− ability to retrain

− flexibility/diversity

− commitment

❑ Core Competencies

❑ Systems:

− human resources

− logistics

− coordination

− information

− communication

❑ Government/

Legislation

❑ Unions

❑ Other Stakeholders

❑ Customers:

− stability

− new possibilities

− service

❑ Market:

− concentration

− state of the industry

❑ Competitors:

− strength

− new directions

❑ Suppliers:

− security of supply

− cost of supply

❑ Risk/benefit of world

events, e.g., price of

petroleum

Economics Outputs Stakeholders Marketplace

PETERDRUCKER’S

THEORY OFBUSINESSSPECIFICATIONS

1. The assumptions about environment, mission, and core competencies must fit reality.


2. The assumptions in all three areas have to fit one another.


3. The theory of business must be known and understood throughout the organization.


4. The theory of the business has to be tested constantly.

Reprinted with permission from Peter Drucker, Managing in a Time of Great Change(Truman Talley Books, 1995), pp. 30–31.