Everyone’s familiar with SWOT as a planning tool, where you analyze your strengths, weaknesses, opportunities, and threats in order to determine strategy.  It’s pretty `101’ stuff, but still valid.  The weakness of SWOT is in it’s use;  when it’s considered the `core’ of strategy development.

A recent Harvard Business Review article cited a Bain & Company’s  study of 57 organizations between 2000 and 2006 and found that fewer than one-third of the companies going through a change management process experienced any meaningful improvement and most had no effect whatsoever – and some even destroyed value!  One example cited Chrysler, who had reorganized its operations three times in three years preceding its bankruptcy and eventual merger with Fiat.  During each of the three changes, executives proclaimed the company was on a new path to profitability.  Guess what.

The disconnect between structure and performance is based on a misunderstanding of the link between the two and a fundamental rethinking about the concept of reorganization.

It’s been noted by people smarter than I that a company’s value is equal to the sum of its decisions; and the link between performance and decisions shouldn’t be underestimated.   Therefore,  it would seem decisions, rather than structure, should be the primary focus.

The risk in SWOT, of course, is that you could end-up with an organization misaligned with your strategy simply because you ignored your decision process.   The point:  SWOT can be a meaningful exercise in determining strategy; but, not necessarily as preparation for organizational change.

Before embarking on a change initiative, however, it may be beneficial to look at positions in terms of another grid:

                            Dreamers                    Winners

                            Losers                        Defenders

Let’s take a look at these positions, starting with the least favorable:

• Losers:  These are the companies whose strategy for preserving value is based on cost and risk reduction.  The result is almost always the same:  They lose competitive position.
• Defenders: These are comfortable with the ‘go slow’ approach.   This approach can work if the gap between them and their competitors isn’t growing too rapidly or too large.  Often, this can backfire, however.
• Dreamers: These companies create value through product or business transformation; but, almost always without a linked high performance strategy.  The result is often unrealized goals and unkept promises.
• Winners: These companies have combined the ability to create value through a product or business transformation with something the ‘Dreamers’ didn’t have:  The capacity for strategic execution of a true high-performance strategy.
  

The process of developing a high performance strategy is something that’s learned, preferably through some `hands-on’ learning experiences directly tied to your organization’s needs.  But, rest assured, there is a process and a roadmap to go with it.

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