Performance Management

Identifying your strengths and weaknesses

By Erica Olsen ⋅ February 28, 2007 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

Previously in this column, I discussed the first two
steps in the strategic planning process – “Getting ready and organized, and
Articulating your mission and vision”. What follows next in that process is “Reviewing your strategic position”.

You may already be familiar with the trusted business
planning tool called the SWOT, but just in case, let me quickly review. SWOT is
an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. These
key factors are crucial in assessing your organization’s strategic position.
You’ll want to build on your company’s strengths, shore up the weaknesses,
capitalize on any opportunities and recognize any threats that may exist.

Your organization’s strengths encompass everything that
your company does well. Ask yourself what the company’s capabilities, skills
and resources are that you can draw on to execute plans and actions. Consider
your human and organizational capital, the company financial resources, and
operational processes. This should be your assessment of what’s working in your
organization. To see if your organization is making the grade, go to The
Business Report Card at www.mybusinessreportcard.com.

Your weaknesses, conversely, encompass those things that
are holding your company back from achieving your goals or serving customers.
Ask yourself what might be hindering your organization from reaching its full
potential. What are the impediments to your success? Maybe your technology
management is outdated or perhaps your employees aren’t working together
optimally as a team. Or consider your employee retention rate. Does your
organization spin its wheels hiring and training employees only to lose them
within a short time?

It’s worth noting here that it is equally important to
assess your strengths and weaknesses from the point of view of your customers.
It’s very likely that your organization could be conducting more business with
your existing customers by looking at your operations through their
perspective. Additionally, once you’re armed with this information, you can
make strategic decisions that raise your worth in the eyes of those customers
you value most.

Along with the internal assessments of your
organization’s strengths and weaknesses, reviewing
your strategic position also includes evaluating external opportunities and
threats in the marketplace. There are issues, trends, and events that can
conspire to positively or negatively impact your business, and reacting
proactively will better help you determine your strategic position.

Opportunities that exist may be political or social, or
they may be environmental or technological. Consider the graying of America.
Does this development dramatically increase your potential market? Or consider
the increasing diversity of the population. Is there an untapped market out
there for you?

Maybe the opportunities are in your industry. If there
are big startup costs or regulatory hurdles associated with your industry it
could be an opportunity for your company to capitalize on its established
business presence in the marketplace by expanding its offerings or product
lines.

Of course, conversely, these same factors that may be
opportunities could also be threats. What if the ageing population spells the
demise of your market share? Or what if your company hasn’t already addressed
meeting the demands of an increasingly diverse population?

Some of these issues may never have a bearing on your
business, but it’s important to keep in mind that your operating environment is
the outside circle influencing your business. And don’t forget to ask for help
– objective input can help you see parts you may have missed.

To better evaluate your strategic position use our SWOT tool.