In a recent post, I set out the reasons why SWOT analyses can, in the words of one colleague, be described as a “Stupid Waste Of Time!” So, what do you do instead?
Analysis of your organisation and its performance does not have to involve wading in piles of data. It should be focused, targeted and specific. There are three critical factors you must consider:
- Work at the right level in the business. Not all analysis should take place at the whole company level, and segmenting your work is a great way to identify key insights and issues. When I ran the strategy team for UK retailer, Boots the Chemists, we performed some analysis at a company level, but most of our work was focused at a level or two below this. For example, in terms of product strategy, we would focus on category level analysis (e.g. pharmacy category, cosmetics category, toiletries category), and for store performance we would identify issues by looking through regional and format lenses. Before you begin any analysis, you should therefore ask yourself what level in the business is likely to give you meaningful results.
- Answer specific questions and hypotheses. A big problem with the large consulting firms is that they undertake excessive analysis with no end in mind. You will get far better results if you limit your work to answering specific questions you have. Even better, starting off with an opinion or idea – we can call them hypotheses to sound more accomplished – will help give you laser-like focus on the work that is required.
- Develop actionable insights. Actionable insights lead to action. For example, finding out that you pay key staff 30% below market rates is an actionable insight; discovering that 10% of purchases made by your most loyal customers on a Wednesday have an average 4.7 items in the basket but this drops to 3.6 items on a Thursday, is not an actionable insight. Analysts can easily get lost in the detail when they undertake this work. I should know – I was one! As a colleague once told me, “Stuart you’re not drowning in data, you’re bog-snorkelling in it.”
Don’t base your strategy on SWOT analyses. Build up a picture of your current position using focused analyses that are fact-based and help you gain a better understanding of your business and an idea of where you should be taking action.
© Stuart Cross 2010. All rights reserved.