Outside in: Doing your SWOT analysis a different way

by David Lykken23 Mar 2017

The SWOT Analysis is one of the most fundamental tools for strategic thinking in business. It's something I've used over the years in my own organizations, as well as in how I train other organizations to see their businesses. Typically, we start with our strengths and weaknesses—internal characteristics of our organizations. What are a good at, and where could we use improvement? Then, we work our way out to the opportunities and threats—the external characteristics of the market. Where are we likely to encounter success, and where are we likely to encounter failure?

People have been doing SWOT Analysis this way for years—working from the inside out. Recently, though, I've gotten into the habit of flipping the paradigm on its head. Rather than teaching organizations to look at themselves first, I'm teaching them to first consider the market. First, we ask ourselves, “What are the opportunities and threats?” Then, we ask ourselves, “What strengths and weaknesses do we have that will lead us to capitalize on those opportunities and be vulnerable to those threats?”

At first glance, this distinction may not seem to be that big of a deal. But the shift in focus is huge! Rather than focusing on ourselves and how we can get the market to conform to our strengths and weaknesses, the inverted SWOT Analysis places the focus on the customer! We first ask about the needs in the marketplace. We first ask how our competitors are meeting those needs, and how they are failing to. We first assess the environment in which we'll be operating. Then, and only then, we take a look at ourselves. In doing so, we place ourselves in the position of being willing to change in order to meet the market's demand—rather than trying to change the market to meet our own internal characteristics. Have you considered changing the way you do SWOT analysis? If you do, I promise you'll love the results you get from your shift in focus!

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