The SWOT Analysis first emerged in the 1960’s and has been widely used as a strategy tool in commercial, government, voluntary and community sectors. It provides a structured method to evaluate internal and external factors, focusing on the strengths and weaknesses of a business and the opportunities and threats facing that business.
While the process remains valid, there are two major criticisms of this method. The first is the quality of the data that goes into it. This tool was developed before the digital age when data was not as freely available and market testing was not as efficient, nor did it provide as many insights as it does today. Because of this lack of concrete data, those using the method typically filled it with anecdotal evidence and supposition, neglecting the information they did not possess. In this way, critical facts that can lead to great insights can be left out.
The second criticism comes down to what you do with information. The SWOT is not a method that leads to an obvious plan of action, the information gathered and applied gives no defined direction, the results do not clearly indicate what the next steps should be. In other words, it lacks guiding policy (one of the 3 essential ingredients in a good strategy – see Good Strategy: Bad Strategy by Prof Richard Rumelt). It is simply a statement of the facts, and not all of them.
The digital age now provides opportunities to access real time information and to carry out rapid testing of assumptions that weren’t available in the “analogue age”. This allows us to determine what path we should take, our route to market, our value proposition – as long as we know how to use the data we gather to inform our decisions.
Ionology’s 7 Principles of Digital Business Strategy (7PDBS) ensures those using it gather all of the information available and necessary, ask the data the right questions and use this to determine how to proceed with a coherent plan of action. The 7PDBS has been developed to provide users with a clear indication of where they are, where they want to be and defines the plays they should make to get there. It provides a rigorous approach to diagnosis, a guiding policy upon which decisions are made and gives the structure around which a coherent plan of action can be created – all 3 ingredients of a Good Strategy.
If 5 different teams carry out a SWOT analysis on the same organisation it is possible to come up with 5 different conclusions and next step plans. However if 5 different teams use Ionology’s 7PDBS framework, they will all come to the same conclusion as it is based on data-driven evidence.
The title of this article was designed to be a bit ‘’tongue in cheek’’ and there remains a place for the SWOT analysis process but the experience of gaining insights (real “light bulb” moments) from evidence gained through digital data analysis and rapid testing of ideas can be life changing for an organisation.
If you’d like to know more about Ionology’s 7 Principles of Digital Business Strategy or how to use our Digital Transformation Framework, visit our YouTube channel for an in-depth review of what they are and how they can be used. You can also take our Free Digital Transformation Training course here to see where strategy fits with Digitally Transforming your organisation.