It's time to conduct an honest SWOT analysis on the ever-popular SWOT Analysis Technique, which provides an assessment on the Strengths, Weaknesses, Opportunities and Threats of an entire organization, a department or a specific process in the organization. The critique I will provide on the classic SWOT tool is that it does not look at the target of the analysis from a cascading system perspective. It thereby misses assessments of critical elements of the top-down cascading and circular system, which starts with Leadership, then Culture, Processes, Performance Metrics, Responses to Critical Issues and Learning Feedback Loops to Leadership.
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 storm 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:
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:
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:
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 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.