What if we rename SWOT to TOWS?
SWOT is one of the most useful tools to conduct a strategic analysis. It is also often misunderstood. The reason has to do with historic development and naming of the tool. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. It was developed by a team at the Stanford Research Institute (SRI) in the late 1960s.
The idea is to analyze internal capabilities (strengths and weaknesses) combined with the external environment (threats and opportunities). Armed with this analysis, begin to to identify strategic priorities and develop plans to address them.
The developers named their method SWOT. There is an implied hierarchy which encourages the analysis to first assess internal strengths and weaknesses, and then external opportunities and threats. This implied hierarchy has created problems for those who use this tool to drive strategy discussions in teams. In the absence of something to anchor the discussion, an analysis of organizational strengths and weaknesses can become abstract and undirected. Groups often fail in trying to define their organization’s strengths and weaknesses, end up frustrated and exhausted, and so give less attention to critical developments in the external environment.
A more progressive approach is to start with the environment and then analyze the organization. The first step is to assess the organization’s external environment, looking for emerging threats and potential opportunities. This assessment needs people who embedded in the reality of the organization and knowledgeable about its environment.
Having identified potential threats and opportunities, the group is able to better evaluate them with reference to organizational capabilities. Does the organization have weaknesses that make it particularly vulnerable to specific threats? Does the organization have strengths that would permit it to pursue specific opportunities?
The final step is to translate these assessments into a set of strategic priorities, blunting critical threats and pursuing high-potential opportunities. These are then the inputs to a more extensive strategic planning process.
A name change like this will never happen. But we can inject more discipline into the process.