Encyclopedia of Leadership

3.3

SWOT: STRENGTHS, WEAKNESSES,

OPPORTUNITIES, AND THREATS

Inspired by Alexander Hiam, David Ulrich et al., Peter Drucker, and others.

In preparation for formulating strategy, leaders need to examine the current state of their orga-

nizations, both inside and out. A common preliminary step to strategy clarification is an

Environmental Scan or SWOT—brainstorming and assessing the Strengths, Weaknesses,

Opportunities, and Threats to your organization, business unit, or team. Besides using SWOT

withinyour organization, it also needs to be carried out looking at your organization from the

outside.Peter Drucker boldly states, “Executives of any large organization are woefully ignorant

of the outside.... When it comes to outside data, we are still very largely in the anecdotal stage.”

Make sure the data is thoroughly clarified, since you will make strategic decisions based on

this data.

✔ Strategy must be built on reliable and clear assumptions, not on hunches and unstat-

ed assumptions.

✔ Good strategy capitalizes on the current strengths and opportunities, as well as shoring

up weaknesses and preparing for threats.

Although the concept of SWOT seems simple, its execution can be challenging. SWOT data

is best generated within your workgroup, so you can assess the quality of the data, the group’s

understanding of the data, and the depth of the group’s commitment to formulating strategy.

It also helps to approach SWOT from many perspectives (e.g., an internal perspective, the per-

spective of customers or competitors, short-term and long-term perspectives, and so on).

76 SECTION 3 TOOLS FORSTRATEGICTHINKING

(clearly listed and prioritized) (clearly listed and prioritized)

(clearly listed and prioritized) (clearly listed and prioritized)

Key strengths Key opportunities

Key weaknesses Key threats