At PriSim, we always include a SWOT exercise (Strengths, Weaknesses, Opportunities, and Threats) as part of our business simulation classes. SWOT is a simple yet powerful framework to assess the current “as-is” condition of a company, forming the foundation for future “to-be” strategic planning.
So what could possibly go wrong with such a timeless, well-tested framework? A lot, as it turns out…
One of our favourite clients alerted us to an article on the cognitive biases pervasive within most SWOT analyses that undermine their actual usefulness in strategic planning.
Here are three tips from the article to reduce your biases when conducting a SWOT analysis:
- Be wary of a false sense of comfort regarding Strengths and for overconfidence in estimating the magnitude and probability of Opportunities.
- Watch out for hazardous errors in judgement and blind spots regarding potential Risks and Threats.
- Because SWOT is usually conducted in group-settings, cognitive biases can increase exponentially. Beware of groupthink and avoiding uncomfortable topics – often the exact topics that need most to be explored in detail.