Never do a SWOT analysis
Perusing LinkedIn the other day a note caught my eye. It referred to advice from Professor Roger Martin on the topic of SWOT. His advice was as follows:
“Never do a SWOT analysis. And never pay attention to a SWOT analysis you happen to receive. At best, it is a waste of time. At worst, it will distract you from creating and rigorously testing your strategic logic."
He also went on to say that he hadn’t much faith in Maslow’s hierarchy of needs or PEST analysis as a strategic foundation for marketing planning.
I was taken aback by this forthright advice. In looking through the comments which followed I could see that a number of people were asking “well what should we use instead?” And others seem to think that because these frameworks have been around for a long time, they are dated and inappropriate.
It got me thinking. I wasn’t particularly impressed by those who felt that the reason for rejecting the frameworks was their age. There are theories of physics that have been around for over 300 years and are still valid. Just because theories and frameworks are old doesn’t mean to say they are wrong.
The post on LinkedIn didn’t offer Roger Martin’s alternative to the SWOT so I will try and do so here. He isn’t against frameworks; in fact he offers his own framework which he calls The Strategy Choice Cascade. It has five interrelated choices which arise from five questions:
1. What is our winning aspiration?
2. Where will we play?
3. How will we win where we have chosen to play?
4. What capabilities must be in place to win?
5. What management systems are required to ensure the capabilities are in place?
These are good questions and they require a good deal of analysis in order to arrive at answers. “What is our winning aspiration?” can’t be answered without some consideration of your competitive edge and the opportunities and threats that you face.
Good strategic thinking comes out of asking lots of questions. What problem do we face? Where would we like our company to be? Where do we have a competitive advantage that will enable us to win in the market? What resources will we require in order to do so? The more questions you ask and the better your analysis of the situation, the greater will be your chance of developing a winning strategy.
A SWOT analysis provides a great framework for positioning a company – it generates a situation analysis if you like. Maybe Professor Martin is concerned that people dive straight into a strategy after completing a SWOT. That would be dangerous. His own framework is valid but then so are the frameworks offered by Michael Porter or The Business Model Canvas, or the Boston Consulting Group matrix. In fact if you look here on my website there are 65 frameworks that claim to help strategic thinking. These are not exhaustive. They could be used in combination with frameworks on innovation or marketing or customer behaviour. In fact, the number of frameworks available to us is so large it can be confusing. It is one reason I like a SWOT analysis. As with all the frameworks it should be undertaken thoroughly. There are at least half a dozen books showing how to do a SWOT analysis in business. A SWOT well done can be very useful in pointing to a business strategy.
Take a look at Roger Martin's framework but do keep an open mind on some of those older frameworks. They have stood the test of time and applied correctly they can be extremely useful.