THEORY 67

SWOT AND PEST DONE RIGHT! (THE FIRST 11)

Use to assess your organisation’s current and possible future financial and strategic position.

It is often incorrectly assumed that the difference between SWOT and PEST analyses is that SWOT deals with internal factors affecting an organisation and PEST external factors. The real difference is that, whereas SWOT is concerned with issues unique to a single organisation, PEST identifies the issues that will impact on all the organisations in a specific sector.

PEST CHANGES

Source: van Assen, M., van den Berg, G. and Pietersma, P., Key Management Models (2nd edn) (Pearson Education, 2009).

HOW TO USE IT

  • Whether you are running a SWOT or PEST exercise the same approach can be adopted.
  • Check with your marketing team to see if they receive a monthly digest of articles that have appeared in the press or online that mention your organisation.
  • Build a network of contacts with other managers in your sector. Trade and professional gatherings are a good place to start.
  • Pull together a small team from across the organisation to do the exercise. Define and explain the purpose of the SWOT/PEST analysis, e.g. are you looking at the issue of market share in the Birmingham area or across the country?
  • Don’t look more than two or three years down the line.
  • Use the information that the organisation already has to get the ball rolling. Then use brain storming and the models discussed in this section to collect further ideas/information.
  • Encourage members of the team to use Management by Walking About (MBWA) (see Theory 7) to collect additional data. Impress on them the need to define a purpose for each MBWA in advance and not to interrogate people but simply engage them in conversation. Remind them that this is a listening exercise. They should say a little and listen a lot!
  • Use every conversation and meeting you and your team have with staff, customers, suppliers, competitors, bankers, accountants and consultants to collect additional data. Stress the need to listen to those who hold unpopular views. Why? Because every new idea started with just one person and was downright stupid until the majority of people took it onboard.
  • At the SWOT/PEST meetings use post-it notes to record suggestions and then arrange the individual ideas under themes on the wall.
  • Analyse and evaluate each idea in terms of the impact it would have on the organisation if it occurred and how likely it is that it will happen (see Theories 68–70). Use quantitative (hard) and qualitative (soft) data and personal insights to evaluate the issues (see Theory 73).
  • Look for high-probability, high-impact issues. If there is more than a 30% chance of a high-impact event occurring, it’s worth analysing further.
  • Briefly outline a strategy for dealing with all those threats that have breached the 30% level. They can be worked up fully as and when they become more likely to happen.
  • Remember most SWOT/PEST analyses aren’t worth the paper they are written on. Why? Because people forget that a strength is only a strength and a weakness is only a weakness if it provides either a competitive advantage or disadvantage. For example, ‘A highly skilled and committed workforce’ is only a strength if your staff are truly better than your competitors.

QUESTIONS TO ASK

  • Who can help me conduct a SWOT/PEST exercise?
  • Have I ever evaluated how accurate/useful the SWOT and PEST exercises that I conducted in the past were?
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