Monday, September 27, 2010

When to Use (Not ) SWOT Analysis in Project Management

In 2008 Project Manager at Volvo IT (Peter C) give a question about when to use and when not to use SWOT analysis in project management? And from the discussion on the Linked In there is a few a good answer, and this is the all answers:

    * SWOT is useful as a portion of the strategy development for a business. It is only a portion of the strategy and everything needs to be researched to be sure that this isn't just brainstorming from non-experts. To better answer your specific question:

   1. Use SWOT when you have real experts stating real facts or you are asking questions which require research for the analysis. Even then, take this information as a portion of the strategy in alignment with other factors like real benchmarking data, customer response data and customer research including forecasting.
   2. Don't use SWOT if you don't have real subject experts in the room and if there is a tendency to move from brainstorming to actions without research.

    * As a principal it is vital for analysis to be done through SWOT mentality. Thinking of scenarios and solutions in terms of strengths, weaknesses, opportunities, and threats gives analyst a perception that would include all dimensions. Of course, there are cases where SWOT is not fully applied. The only place I would not use SWOT is when we are in the realm of hypothetical... especially when these are far-fetched thoughts. SWOT requires some form of comprehension that may not exist in these cases.

    * SWOT's are always important to utilize both prior to, during, and after completing projects. The key is "objectivity". This can be very difficult to do in a high pressure situation where time is cirtical or in a culture that doesn't re-examine itself for the sake of improvement. If the SWOT is done objectively and supported by 3rd party non-biased market research, "last minute" risks or problems are generally uncovered before they occur. Checking in periodically on your assumptions throughout the project will enable you to further refine the outcome and avoid major mis-steps and ensure quality output. If the project duration is long term, it is good practise to continually evaluate more current market research to support or to adjust your strategy/direction. Finally, re-examining your SWOT with your final outcomes will enable you to learn what works and what doesn't. Doing so will enable you to become more effective in utilizing SWOTs.

    * SWOT is almost always useful, but too many companies see it as the end of the project instead of the beginning. SWOT establishes a good framework and context, but in and of itself, it does not point to the isn't strategy. There are "next steps" that some companies don't take.

    * I found SWOT to be used all too often as a lazy approach to diagnosing a problem (real or perceived). It is too high level to coalesce thinking about the nature of the problem, the place where and when it appears, its frequency and its severity. If used as a sole rationale behind a change and/or project, chances of successfully addressing what ails your organisation are pretty small. It is useful to communicate with people who want to see an "analysis-on-a-page", but as previous contributors said, it is just one of many diagnostic tools that you have to use to analyse the situation(s) you are facing.

    * I think SWOT is more useful when you are analyzing a particular company or business. However, if you wish to analyze an industry, you can use Porter's five forces analysis. Also, SWOT is mostly applicable for static conditions of business. For dynamic or rapidly changing businesses such as knowledge intensive industries, SWOT may not be that helpful. Alternatively, use of BCG matrix or GE/Mckinsey Matrix along with SWOT can give better results.

    * I believe that SWOT, while always useful, is frequently not a sufficient exploration of the situation. For large, company strategy type issues, you might look at a Porter Five Forces model which takes in aspects of the landscape. While SWOT's OT portion looks at the landscape, I think the Five Forces looks deeper and more usefully. Similarly, I like Porter's Diamond of International Competition for a lot of things, like new product entry and predicting a team's chances for success in the playoffs. It takes some tweaking to move Land, Location, Labor, Population and Resources to a world of products and baseball, but you work your own analogues.I try to work every project through the Theory of Constraints. It's a solid theory and works very nicely to figure out what needs fixing. But, generally speaking, SWOT is always a good place to start. At the very least, it's a good exercise that can lead you to a more useful model for looking at the project.

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