A few weeks ago, I noted that change isn’t required in business, but neither is survival. Let’s assume you’re interested in survival.

You may have encountered a SWOT analysis on the job or if you went to business school. The thinking goes that identifying Strengths, Weaknesses, Opportunities, and Threats is a good place to start when trying to initiate change. But if you take this approach you are in danger, because transformations rarely start behind closed doors. The beginning of a successful transformation journey is to pick one’s head up and look around.

In his book The First 90 Days, Michael D. Watkins suggests that you turn the SWOT concept around a bit.  He suggests doing a TOWS analysis. What I take from his concept is to look outward initially. First, understand the Threats and Opportunities of the business environment. Then, examine the Weaknesses and Strengths of your organization. This enables you to plug gaping holes to minimize damage from Threats or take advantage of the Opportunities.

The reason Watkins’ approach makes sense can be seen from a biological example. Say you are a polar bear and you are among the best-suited species to thrive in a cold environment. As a polar bear, you would write this in your “Strength” column. After all, which other species can handle the cold as well as you can? This is a great attribute if the environment is cold. But if the environment is warm and getting warmer, the environment poses a mortal threat to your “Strength.” By focusing [inward] on strengths and weaknesses, we often miss the environmental factors at play.

The same is true in business. If your corporate competencies align well to what the marketplace needs and demands, your company starts in a pretty good place. The basic laws of supply and demand still apply.  If what you do (or are good at) is not valued or demanded by the market, it’s time to start worrying about survival.

The pivot point is to look outward [first] to avoid danger. Knowing how the market is evolving is exactly what is needed to ensure your company stays ahead of the market and doesn’t face extinction.

You’re Doing SWOTs Backwards, or You Should Be (What Good are Obsolete Strengths?)
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