SWOT is probably the best tool there is for taking a strategic look at a company. It’s named for strengths, weaknesses, opportunities, and threats. It’s a very good first step towards analyzing any company, or developing business strategy. I recommend the SWOT be part of every planning process.

It’s also an excellent tool for gathering a team. During my 20+ years as business plan consultant and 10+ more years running a company I’ve seen many times how the SWOT is an icebreaker. It invites people to contribute. It gets people thinking strategically, talking, sharing, and turns a group of people into a team.

It also offers a good forum for really opening up discussion. For example, I’ve seen a SWOT discussion bring up problems that needed upper management attention but might otherwise have remained hidden.  Middle managers don’t always like telling upper managers what’s wrong. Even in a healthy company culture that can be awkward. SWOT makes that easier.

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For example, I once saw a 30-year-old software development manager suggest during a SWOT meeting that one company weakness was the 50-year-old president messing with the software code instead of leaving it to the full-time pros. I saw another SWOT meeting in which several managers said ownership was unwilling to hold managers accountable for under performing.

It’s not magic. It’s just an easy-to-understand framework that invites anybody who cares about a business to contribute.

Of course you have to manage a SWOT meeting well.  Like any other meeting subject, SWOT can degenerate into useless discussion. A SWOT meeting should focus on the SWOT agenda and avoid unrelated side discussions. It should invite contributions without reprisals for negative comments. It’s a variation on brainstorming, so contributions—as in suggested bullet points, suggested items on the list—are all positive as long as they are well intentioned.

If you do that, you also get the benefit of bringing people into the discussion. Implementation is much more likely when managers contribute to the plan. They understand the background and they feel like the plan reflects their inputs.

So use the SWOT both ways.  Use it to develop strategy, and use it to develop team commitment.

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Tim BerryTim Berry
Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.