||:Nov 3, 2009;
As in baseball, SWOT analysis a hit in business
John Riddell Jr. Commentary
Today’s column will take the efforts put into the strengths, weaknesses, and threats (SWOT) exercise and transition it into a productive direction.
The first step is to examine the listing of opportunities and attach some rationale of priority. Every company in every industry will have different schemes of evaluation, but the goal is to come up with one or two best chances for success. Once these opportunities have been defined and prioritized, the next step is to think through exactly what are the critical skills needed to be able to capture the opportunity.
Given that we are in the midst of the baseball World Series, the fall classic provides a good example.
To win the World Series, every team must have good pitching, timely hitting and good defense just to get to the playoffs.
But given their home ballparks with varying dimensions and their existing staffs including their
in (their minor leagues), each club has to balance what it can afford to pay with what it perceives are the areas in which it is lacking.
In business terms they are going through a
critical skills analysis. To wit, “These are the skills we must have to win the Series; these are the skills and strengths we currently have.”
The result is a gap and to ultimately succeed in baseball this gap has to be filled. The question then becomes how to fill the gap. Do we go out on the free agent market and buy the skills, do we make a trade, or do we continue to develop one or more of our minor league sensations in anticipation that they will plug the hole?
Both models do work. In this year’s series, the New York Yankees have chosen to buy and pay their way to solving their critical skills gap while the Philadelphia Phillies are much more of the in-house development mode. (FYI, the Yankees’ average payroll is about twice that of the Phillies’.)
Every business, size notwithstanding, needs to go through a similar exercise regularly. Certainly the last few months of this economic challenge have dramatically changed the competitive landscape for most companies.
Many preconceived notions of strengths were more in the line of preconceived self-delusion with the very predictable results. But what many survivors fail to notice is that every one of these self-deluded failures left a hole or gap in the marketplace.
Now while many of the markets have shrunk in terms of dollar size, the number of viable competitors has been reduced disproportionally.
But still there remain those required skills that any and every company must have to capture this new-found opportunity. This where the critical skills gap analysis comes in handy.
A side benefit of this critical skills gap analysis is the invaluable insight into the need and discipline for fiscal austerity. Few opportunities will be presented without a price tag and certainly an individual company’s estimation of its financial resources will play out in its SWOT analysis.
Take some time and go through this exercise. Once completed, lay a timeline of desired milestones over it and you’ll have the makings of a good plan for success.
John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes every other Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at email@example.com.