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SWOT Analysis – Simplified

SWOT analysis is integral part of ‘determination of success factors’ while planning annual goals and building strategy. This blog post focuses on two key elements – ‘How to segregate business processes at large demarcated between Internal and External elements?’ and ‘ Simple method to run SWOT analysis of sub-processes with one example each from Internal and External processes?’.

Element 1 : Segregate Business Processes

Business processes can be segregated among 4 pillars – Finance, Sales, Operations and Human Resources. Lets divide some key business process among these pillars for manufacturing :

 

internal external processes

I an in love with the above image which classifies processes beautifully. Internal Processes are grouped under group 1. Blue color denotes Finance process and its sub-processes, orange color denotes Sales process, pink denotes Internal Processes and green denotes HR process.  Group 2 contains external processes. Red denoting typical stake holders and typical key elements. Yellow denoting SEPTEM which is important Social, Economical, Political, Tech, Environmental and Legal aspect can affect business situation.

These internal and external processes can vary depending on nature of business a company has got. The above list is very generic for a manufacturing / service organization. These processes can be further tiered so that specific actions can be identified for work groups withing plants/ sites. Lets look at example of internal process number 1.10 production and lets see a typical example of further tiered level of its further processes. Similarly lets look at example of external process number 2.9 technological and lets see a typical example of its further tiered levels.

internal external processes-sub processes

 

Element 2 : Running Template for each sub-process to arrive at SWOT results  

Segregation of processes is key to arrive at good planning and to produce successful SWOT outcome. Once processes and sub-processes are identified. A simple template can be run for each process. Lets review one internal process example for sub process 1.10.4 Scrap.

internal SWOT example.png

 

Lets review one external process example for sub process 1.9.3 New Product Technology.

external SWOT example.png

After collecting results for each sub-process by template-run involving relevant work groups withing organization, one ends up summarizing SWOT summary. This SWOT summary is important element of ‘ Determine Success Factor’ while evolving annual plan in annual strategy meeting of organization.

The SWOT summary can look like below template with clearly defined priority level, activity proposal and savings value.

SWOT summary.png

It provides immense impact on organization planning process to complete SWOT Summary and use it as an input to ‘Determine Success Factor’.

With focused template approach the ‘Annual Goal Setting’ exercise can be completed in 1 day of execution and some planning ahead. SWOT workshop can be completed in half day with multiple groups handling set of processes.

For more details about ‘SWOT’ and ‘Annual Goal Setting‘ process and free templates reach out to author at ichbinano@gmail.com or +919810637103.  All the best.

 

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Annual Goal Setting – Step by Step

Top performance athletes and top performance companies have something in common. Both are aware of power of goal setting and importance of figuring out their annual goal respectively. Irrespective of actual success towards end of the year – goal setting and progress measurement works like a compass in ever increasing complexities to manage businesses – small and big alike.

CipherOn is a mid size organization based out of New Delhi – they have discovered a simple yet powerful way of arriving at their annual goal. 4 steps are involved.

Step 1 : Analyze Potential of Org

Step 2 : Decide on Goals & Objectives

Step 3 : Determine Success Factors

Step 4 :  Plan and Control activities

Lets look at each in further depth

Step 1 : Analyze Potential of Org

In consideration of organization’s ‘Vision’, ‘Business Model’ and ‘Mission’ it is important to access ‘Market Attractiveness’ and ‘Competitive Advantage’.

‘Market Attractiveness’ can be accessed based on ‘Investment Portfolio (risk return portfolio by Harry M. Markowitz, 1952)’, ‘Ansoff Matrix ( Markets Vs Products matrix between new as well as present ones in both by Harry I. Ansoff, 1965)’, ‘Product Life Cycle (profiling under – introduction, Growth, Maturity and Decline by Theodore Levitt, 1965)’, ‘BCG Matrix (Market Growth Vs Market Share to classify Cash Cows, Poor Dogs, Question marks and Starts by Bruce D. Henderson, 1968) ‘, ‘Supply Portfolio (deciding buy/control/make based on Potential for competitive Edge Vs Risk of Outsourcing by James B. Quinn, 2002).

‘Competitive Advantage’ can be evaluated on corporation level criteria and product level criteria between your org vs competition orgs. Common corporation criteria are market share, financial strength, management, employee skills, R&D potential, Time to market and cost efficiency. While common product criteria are function, quality, cost and reliability. Each of these criterian can be measured on scale of average, good and excellent.

Lastly both ‘Market Attractiveness’ and ‘Competitive Advantage’ can be plotted on 2X2 matrial as suggested by GE-McKinsey, 1970s to complete the visualization of step 1 – Analyze Potential of Org. As a matter of facts, largely most organization are not completing this step due to lethargy of top management.

For each of the above concept a free of cost template is available on request by writing to author at ichbinano@gmail.com

Step 2 : Decide on Goals & Objectives

Goals and Objectives can be defined in 4 sub steps of building document for each of the following – Strategy Map, Balanced Scorecard, Sales Plan, Business Plan taking in consideration customer needs, supplier capabilities, product portfolio and production/service footprint.

Strategy Map is building four perspectives further.

Financial Perspective : What financial goals & objectives do we need to achieve, not only to survive, but to develop our business?

Customers & Markets Perspective: How do we need to be recognized by our customers, not only to keep,but to develop our competitiveness?

Internal Business Processes Perspective : How do our business processes need to perform, so that our customers recognize us as a competitive, first class supplier?

Learning & Growth Perspective: What kind of resources do we need to acquire and what talents and skills do we need, so that our business processes perform to the expected level?

Each of above can be called Financial perspective, sales perspective, operations perspective and human resources perspective respectively.

Balanced Scorecard is breakdown of strategic objectives into key indicators and each key indicator is assigned a strategic value target. For example sustainability and growth, a strategic objective can be broken into key indicator like productivity and it can have a numeric target like 240 products per man-hour. This enables identifying gap against this target at any given point in the year.

Sales Plan to include number of products/ services to be sold in the year month by month for each customer, for each product group and for each region.

Business Plan to contain resources in form of investment required to achieve proposed sales plan and expected return of the investment by customer, by product groups and by region.

Step 3 : Determine Success Factors

Success factors can be determined by doing ‘SWOT Analysis’ considering potential, new targets & objectives and actual performance. Internal SWOT will map Strength and Weakness of org while external SWOT will map Opportunities and Threats.

For each business process SWOT can be run by asking simple 5 questions for each of sub business process. Lets take example SWOT – Internal of ‘Scrap’ as a subprocess in a manufacturing org:

Q1: In general , what is your status today?

The actual scrap rate is about 3.5%.

Q2: How us the actual position f your direct competitor(s)?

Our direct competitor has achived a scrap rate of 2.2%.

Q3: Did you achieve your defined targets and objectives?

We did not achieve our scrap target of 2.9%.

Q4: Is your status a strength or a weakness?

Weakness.

Q5: What is your improvement action proposal?

Project: Reduce scrap. Target 2.0%. Dollars 500k savings.

SWOT summary of each process can give prioritization of strength, weakness, opportunity and threat to work on.

Step 4 :  Plan and Control activities

Based on the SWOT summary in a priority order for each business process, divide the identified objectives within each process into ‘project of the process -X’ assign a project team to each project and in the process eliminate less important projects if you can not find resources to do it or if you are overloading some specific resource. What you will end up with is to-do for entire organization.

The guided approach enables 1 day workshop with some advance preparation to arrive at ‘Annual Goal Setting’ document for entire organization – irrespective of size. Unprepared Orgs will anyway will not do it or will do it half-hearted for no or poor results. If org evolve and follow what works for them annual goal setting can do wonder in the space of Organizational Performance.

For needed support (free content / workshop) contact author at ichbinano@gmail.com or +919810637103