Conducting a SWOT Analysis
By Lauren Palmer, BS
The end of the year is my favorite time of year, not just because we celebrate with family and friends over the holidays but because it’s exciting to run final numbers and see how the company has performed throughout the year.
As we begin to analyze trends, patterns emerge helping us to develop strategies for our continued growth and development as a company. We put those assessments into a Strengths, Weaknesses, Opportunities, and Threats (SWOT) report. Conducting a SWOT analysis is a crucial aspect of strategic planning and can help companies identify reasonable goals for moving into the new year.
PREPARING FOR A SWOT ANALYSIS
Before managers begin their strategic planning for the upcoming year, they should review the company mission, vision, and values to ensure that their findings and goals align with the direction the company is headed. Managers should study and assess the dynamics of their market so they can better understand how their unique circumstances might affect their plans. During this process they should consider both internal and external factors that are contributing to the success and challenges of the business.
Internal factors include an evaluation of your workforce—both quality and quantity—the organizational culture, and the policies and procedures. Conversely, external factors to consider include economic trends, political legislation, insurance policies, climate interruptions and perhaps even a pandemic. Often, external factors cannot be controlled but can be mitigated by having policies in place to manage these challenges. Dealing with uncertainty in the external environment is an important skill for managers.
As you consider both internal and external factors that your company experiences it will be easy to begin to identify your strengths, weaknesses, opportunities, and threats.
Once you have completed the analysis of each area of your business, you will want to summarize your findings. This summary will help you recognize areas that require immediate attention, and you can begin to develop an action plan. Taking action after you perform a SWOT analysis is a critical step in strategic planning. This will require you to develop an action plan for the upcoming year to address areas of concern, and to perform goal setting. To begin this process, you will want to follow these steps:
STEP 1: REVIEW YOUR FINDINGS
Look for connections between strengths and opportunities. For example, if your company’s strength is branding and goodwill, one of your opportunities may be increasing market share by expanding your business. Additionally, there will be connections between weaknesses and threats. For example, maybe your company’s weakness is low employee morale thus leading to the threat of high employee turnover. These findings will help you identify and prioritize where to focus your attention.
STEP 2: PRIORITIZE YOUR FINDINGS
After reviewing your findings, prioritize where to put your energy as a manager. Often these findings align with four categorical areas that, once identified, help managers direct their findings to individuals with the right expertise. The four areas are:
- Market growth
For example, a company struggling with low employee morale and the threat of high turnover would categorize this as a People/Cultural issue and direct this concern to an HR manager to help develop an action plan to address it.
STEP 3: DEVELOP AN ACTION PLAN
Once issues or opportunities are identified an action plan can be developed. Set SMART (Specific, Measurable, Attainable, Relevant, and Time-based) goals to help ensure that the action plan is effective. Include a sentence or call out here that says to reference the article about SMART goals for more guidance.
For example, the HR manager may set a goal to increase employee engagement by conducting quarterly performance reviews. These 30-minute reviews provide an opportunity for employees to meet with managers and discuss their performance along with their career goals and aspirations for their future. We hold these reviews at our company and set goals with our employees and then follow-up with them to see how they are doing with working toward their goals. Implementing these reviews helped employees feel that management is engaged in their personal growth and the contributions that their growth is making toward the company.
STEP 4: COMMUNICATE YOUR FINDINGS
Once you’ve used the processes outlined in steps 1, 2, and 3, it’s time to prepare your report for the management team. Ideally, a SWOT analysis fits on a single page, enabling executives or other team members to gain a detailed understanding of the company and address areas of concern and opportunities for growth. Outline the proposed goals and plan to achieve these goals. Once these goals have been approved, ensure that effective communication has been established to all staff safeguarding that all team members are working toward the same outcomes.
The results, outcomes and goals of your SWOT analysis should be used to help the management team establish a strategy that aligns with your organization’s missions and values. Conducting an annual SWOT analysis will help managers continue to identify areas for growth and development in their organization which will lead to a more successful business.
1How to Take Action After Performing a SWOT Analysis. Alchemer. https://www.alchemer.com/resources/blog/how-to-take-action-after-performing-swot-analysis/. Accessed July 27, 2021.
Lauren Palmer, BS, is the co-owner and office manager of Pacific Physical Therapy in Port Orchard, Washington. She can be reached at Lauren@pacificptgroup.com.