When you conduct a SWOT analysis of your business, it functions as a diagnosis of its health and capabilities at that moment in time. It’s a useful tool to help determine what the company is capable of relative to the goals you may have for the present and future. Performing the analysis is only step one, however. It’s what you do afterwards that matters most: you need to execute your SWOT to build the value of your business and direct it towards greater success.
After the SWOT
What should happen after a SWOT analysis? Too often companies don’t fully leverage the information they gain. They run the exercise and discuss company strengths and weaknesses at length, but they don’t create a plan to specifically address the issues the analysis revealed.
If you conducted your SWOT analysis seriously, you will have identified areas of your company that could use improvement. There should be some easy wins here – weaknesses that can be immediately addressed or opportunities that can be seized without systemic change. These actions should be assigned either to a manager or to a capable employee and taken care of.
Then there are the larger changes and longer term goals. These will be focused around eliminating any significant weaknesses or threats you identified and taking advantage of opportunities that may be possible once some of the smaller problems have been addressed. These projects will need more extensive planning and perhaps the involvement of consultants or other experts.
Executing Your SWOT Analysis
Here are two examples of key issues that will keep a company from reaching its full potential and hamper a sale down the line:
Owner dependence – When a company cannot survive without the owner being actively involved in its day-to-day operations, that is a glaring weakness. If the owner were to have a sudden health or family problem and or decide to retire, the company is at significant risk because too much of the knowledge or relationships the company needs to survive will be gone.
What can the company do to fix this problem? It can create a plan to build and implement a management team that is independent of the owner. This will take time to accomplish and will require the company leadership to communicate and be flexible, but once the leadership structure is expanded, the business will be stronger and more resilient.
No policies or procedures in place – A related problem is not having set policies and procedures. In many owner dependent businesses, the owner has everything in his head and adjudicates based on his mood. There is no structural capital of organized systems and processes for how business is conducted. A company with established procedures and systems can more easily survive the loss of employees – even good ones – because the staff knows how to hire and train replacements.
To address this problem, company leadership must create company processes, policies, and procedures, write them down in detail, and have the company’s employees fully trained in how to follow them and how to train others to follow them as well.
Reusing the SWOT Analysis
A SWOT analysis should not be a one-and-done exercise. A new SWOT should be conducted whenever company leadership is considering any significant course of action like a new product launch or expanding into a different market. However, an older SWOT analysis can be reused as a template for future SWOTs and as a historical snapshot to measure the company’s progress. It can be very satisfying to revisit old SWOTs and see how much stronger and more successful the company has become over time.
While it may seem daunting just to conduct a SWOT analysis, let alone address serious issues within the company, it’s worthwhile to do the hard work. Success isn’t achieved by resting on one’s laurels. Building company value is good for everyone – for employees who will be a part of a more successful endeavor, for customers who benefit from dealing with a smoothly run business, and for the owner who will achieve a greater return on his investment, both in the short term and when the time comes to sell the business.
If you have questions about conducting a SWOT analysis or how to implement the changes needed to fix weaknesses in your company, Prometis Partners is here to help. We have experience helping companies address a wide range of problems. Call us – we want to see your business succeed!
