The success or failure of your organization’s strategic planning depends not only on your internal capabilities and resources (strengths and weaknesses) but also on things that happen outside of your control (opportunities and threats). The collective review of these factors for your organization is referred to as a SWOT analysis.
When responding to opportunities and threats in your environment, you need to react proactively rather than reactively. Being ready for the “what ifs” can help you determine your strategic position. You need to take a quick pulse of your company’s opportunities and threats to assess your external situation. To do so, investigate the various areas listed in the figure to get more specific about what’s happening in your operating environment. Don’t forget to ask for help — getting objective input from others helps you see parts you may have missed.
To capture all your thoughts and keep them in order, create a notes page with a horizontal line in the middle. Label the top section “Opportunities” and the bottom section “Threats.” Jot down thoughts about a new market under Opportunities and ideas on a competitor’s action under Threats.
How much time do you spend thinking about your company’s future? Chances are, not much. Putting out fires and taking care of the day-to-day tasks likely consume most of your time. But to be strategic in your business, you must discover how to spot future opportunities and threats as soon as possible. Yes, you do need to identify the immediate forces at work, but you also want to think about and plan for the future operating environment and industry trends. The value lies in anticipating change before it happens, instead of mindlessly reacting to whatever comes at you next.
What changes should you be thinking about? Answer these questions to get started:
Who will our customers be five years from now?
How will we reach these customers?
Do we regularly improve our product quality and customer satisfaction?
What’s our company’s status as a trendsetter within our industry?
Are we aware of new competitive threats on the horizon?
Are we focused on catching up to the competition or on innovations in the marketplace?
Is management flexible enough to alter our business model as necessary?
How does our approach to forward thinking compare to our competition?
Are our customers leaving us? Did they tell us why?
Your answers to these broad-reaching questions can tell you a lot about who you are today and what may need to change within your business. The responses can also give you a better sense of the type of resources you need to commit to reaching your organization’s future. Make sure to push the boundaries. Think about each area in this chapter in terms of the present but also how it affects you five or even ten years down the road.