Tuesday, February 5, 2008

SWOT analysis - a practical approach

People make a lot of the SWOT analysis in strategic planning. As a rudimentary approach to thinking about strategy, the SWOT works pretty well. Decades of experience has shown us that great strategy requires much more focus on strengths and opportunities.

How do you figure out your strengths? There are many approaches to researching this – from member and employee focus groups to analysis by outside consultants. Our preference, for the credit union strategic plan, is to start with the opinions of your management team. After all, they are the people who have to live with your strengths – and weaknesses – day in and day out. In addition, the team itself will ultimately learn to exercise its wisdom in this reflective process.

Be sure you cover strengths (and weaknesses, if you feel they are important) in the most strategically critical areas: leadership, corporate culture, human resources and structure. While these are all pretty “fuzzy” areas to analyze, they have a great impact on your success or failure in strategy, and so you should take this chance to assess them and understand how they contribute to your success.

Knowing where your strengths are can give you a big advantage when setting strategy – you will know where you have the greatest chance of beating your competition, and can set your course accordingly.

In the meeting, when you list your strengths and weaknesses, ask each team member to identify at least one of each – and no more than two or three of each. You should allocate about an hour to the process of identifying and then rating the capabilities of your organization. A 9-point scale (see inset) should be used for rating each capability on importance and your own performance. Obviously, in any situation where you consider a capability to be critical and your own performance is either excellent or poor, further consideration and discussion may be desirable.

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