Prioritize Your List of Strategic Alternatives
Strategic planning is all about making choices. And strategic choice is about making subjective decisions based on goal information. To do so, you first generate a list of all feasible alternatives. You’ve more than likely developed a SWOT analysis that’s multiple pages in length. Now you need to narrow your focus to create a short list of strategic alternatives.
In order to move from a list of possibilities to an actual plan, you need a workable list in each of the four SWOT quadrants: strengths, weaknesses, opportunities, and threats. If your SWOT is overly long or if you have a lot of people involved in your process, consider the following ideas for paring down the SWOT quadrants.
Create themes. Simply combine like themes until you have a workable list of fewer than ten per quadrant.
Choose high impact. With your planning team, ask each member to select the top three SWOT that will have the biggest impact on the future of the organization. Keep the items in each quadrant that have the most votes.
Conduct an opportunity analysis. Often, businesses have more opportunities than they can reasonably execute on. Using information you collected on your markets and customers, determine which of the opportunities have the biggest potential to generate revenue compared to the investment needed to pursue the opportunity. Select those opportunities that have the highest return on investment, or ROI.
Use an Impact/Effort Grid like the one in the figure. The y-axis indicates effort or resources needed to accomplish the opportunity. The x-axis indicates impact or results expected from the opportunity. For each opportunity, plot which quadrant it falls into.
In the example in the figure, an organization would most likely select to pursue opportunity D because it has a high impact with a medium level of effort.
Before you move on, review your SWOT one last time with these guidelines in mind:
Keep each quadrant to ten or fewer items.
Don’t solve your weaknesses; just identify the issue or challenge. For example, poor communication is a weakness whereas need more staff meetings is a potential solution.
Remember opportunities and threats are external alternatives for growth and sustainability. Don’t list improve communication under opportunities.