A Guest Post by Danny Gamache, The Success Professor (http://www.successprofessor.ca). Danny is a business professor at a private college where he equips students for careers in business and success in all areas of life.
One of the most effective tools that I teach my students about how to analyze a business situation is to do a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. This analysis allows a business to thoroughly think through their situation and make wise decisions for their future. A SWOT analysis does not need to be left only for businesses, but can also be done by individuals. Doing a SWOT analysis of your life can give you a clear picture of who you are and the opportunities you have for your life and business.
Step #1 – Set up a grid.
Take out a blank sheet of paper and divide it into four quarters to form a grid. Setting up the analysis in a grid format helps you see the connection between each element of the analysis. The top two quadrants of the grid are title Strengths and Weaknesses; the bottom quadrants are title Opportunities and Threats.
Step #2 – Understand the connections on the grid.
The grid is made up of several sets of connections. The first set is the internal/external connections. In the analysis, strengths and weaknesses are the internal factors. These represent internal characteristics, abilities and skills that you have (or don’t have). Likewise, the opportunities and threats are external issues.
Secondly, there is a vertical connection. The left side of the grid (strengths and opportunities) contains the helpful quadrants that help you reach your goals. The right side of the grid (weaknesses and threats) includes the harmful quadrants that work against you achieving your goals.
Later when you start filling in the grid you will want to use the connections to help think of more things to put in each quadrant. For example, most strengths will have a corresponding weakness (and vice-versa); similarly most strengths can lead to opportunities and most weaknesses may lead to threats. Finally threats can also lead to opportunities.
Step #3 – Take your emotions out; become an outsider.
One of the reasons that businesses hire outside consultants is because they don’t have an emotional connection to the decision making process. People within the business are emotionally connected and therefore may find it harder to truly see all of their weaknesses and threats. They also may miss obvious strengths because they feel that it is normal. Finally, insiders often are so connected to the current strategy that they may miss opportunities that are clear to outsiders.
The same is true for you as an individual. For example, many of your strengths are likely things that you think are natural to everyone. Maybe you are a great encouragement to others. You may not realize that the way you encourage others is not normal and is really a significant strength. Because of these trends you must work hard to remove emotions from the situation and try to look at yourself from an outsider’s perspective. You may also want to get people who are close to you to share their perspective, especially on your strengths and weaknesses.
Step #4 – Spend time analyzing your strengths and weaknesses.
Now is finally the time to start filling in your grid. Start by thinking through the internal side of the grid by looking at your strengths and weaknesses. During this step your focus is on the top quadrants, but if an opportunity or threat comes to mind go ahead and write that down. Be sure to take the time to go through every area of your life. This includes both your professional life but your personal life. You will likely use different strengths and experience different weaknesses in your work and business life than you do when you are spending time with your family, caring for your home, and in how you treat your body.
Step #5 – Use your strengths and weaknesses to consider opportunities and threats.
Once you have your strengths and weaknesses recorded you can use them to consider opportunities and threats. Remember that strengths tend to lead to opportunities and weaknesses tend to lead to threats. For example, if one of your strengths is that you are able to speak well in public, an opportunity might be the ability to speak at the local Chamber of Commerce or Rotary in order to increase your reputation and network. Likewise, if a weakness that you have is that your skills and education are limited to one particular trade or field, the threat might be that if your industry suffers in the economy, you may lose your job. Even if you think this is an unlikely scenario you should record it as a threat.
Step #6 – Apply the findings
After you have developed a thorough list and filled your grid you need to look for ways to apply your findings. You can start the process applying your findings by asking questions about each quadrant. For example you may ask: How can you use your strengths effectively? How can you work on your areas of weakness? How can you exploit each opportunity? How can you protect yourself from threats? The answers to these questions will help you set new goals and strategies for achieving those goals.
Continuing with our previous example, if you see the threat of a job loss because of the weak economy then you need to consider how you can protect yourself from that possibility. Perhaps you want to start a part-time business to generate extra funds, or increase your emergency fund of cash. Here you will also want to look at your strengths and opportunities as sources for your answer. Maybe the opportunity to start speaking at Rotary and Chamber meetings can be part of a strategy to increase your network with other employers in your field. Examples like this can go on and on.
Coming out of this process you should have a much clearer idea about who you are, where you are headed, and what opportunities you need to pursue. Use this to set goals for the future, to clarify your existing goals, and to increase your levels of abilities and preparedness. Doing this will help you move your business and life towards your dreams.
The Success Professor – Danny Gamache
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