SWOT is a waste of time (and other questionable MBA tools)

Recent articles have described the plummeting value placed on the traditional MBA by the business world.

The attraction to MBAs has long been more wishful thinking and a culling mechanism than anything else.

Image provided by Getty Images (Don Bayley)

The vast majority of traditional MBA tools and dogma should be questioned. There is no silver bullet buried there.

Finally people are realizing that “advanced Excel,” as I commonly call an MBA, teaches you how to manipulate numbers but little about the actual business of business.

Are there exceptions? Certainly. But the vast majority of traditional MBA tools and dogma should be questioned. There is no silver bullet buried there.

Consider SWOT. An “analysis” of strengths, weaknesses, opportunities and threats has long been considered a key first step in developing strategy.

It’s a waste of time.

SWOT requires no deep thinking, little if any validation, and typically lists the same things in two categories. An identified strength is also often listed as an opportunity as well. Weaknesses are often listed as threats, with minor wordsmithing so it’s not totally obvious.

If a strength is “time to market” then an opportunity is “leverage time to market.” Really? That helps uncover a new invigorating business strategy? If a weakness is “time to market” and the opposing threat is “competitors’ time to market” do you feel enlightened? Hardly. If that’s news, your business faces a dark future.

The majority of SWOT I’ve examined don’t reflect more than a few minutes of surface level documentation and rarely specify anything unique. False progress.

Other questionable MBA tools

Environmental scanning (ES) is a process that can provide value, and unfortunately, SWOT is considered one form of doing that. The concept of ES emphasizes the importance of recognizing the external environment. It considers the interconnectedness of economies, industries and socio-political changes. True ES involves comprehensive research and intensive unbiased analysis.

But like most tools designed to provide value, ES can be executed poorly and consider only the already-known and obvious, or highlight the irrelevant. The analytical “advanced Excel” guru can be very helpful in churning through the data but needs expert guidance to recognize what is important and what is not.

Manage by objectives (MBO) is another misguided but widely-used MBA tool. It basically says, “Here’s the number: Now go get it by any means necessary!” That’s hardly management or leadership.

The balanced scorecard is another product of the MBA world, widely used and frequently useless. It is reported that more than 50 percent of corporations use some form of it, and Harvard (home to the book’s authors) has declared it one of the most important business ideas developed in decades.

The initial thinking behind it (I resist the temptation to refer to the scorecard as BS) was commitment to a well-rounded system of key performance metrics. That’s very valid. No company should measure status, objectives and progress by only its financials.

Profits are important, but hardly the only thing of importance in a truly excellent business. But “well-rounded” and “multi-faceted” as the most important new business idea speaks poorly of all business people. Surely we don’t find this earth-shattering.

The authors have further developed the scorecard into a technique for converting strategy into implementation tactics, adding to existing methodologies. Means to effectively implement strategy is obviously important. Without that, strategy development is a waste of time.

Three useful steps

As you look to improve the capabilities of your business, development and execution of a strategy is a critical process. Mastery of other processes is irrelevant without it. Without offering a fancy acronym, here are three steps to help you get started:

Step 1

Answer this question: How do you picture your vision, mission and values manifesting themselves 10 years in the future? Without answering this important question, traipsing through the weeds of today’s products, markets and tactics will sap your energy and strategy will be reactionary more than visionary.

Step 2

Identify the top few (three to five) breakthrough changes your organization must successfully achieve to fulfill that picture. Prioritized, this high-level sense of direction provides the basis of your strategy.

Yes, these must reflect a grasp of the total current environment; coherent expectations of the future are even more important. For example, anyone who ignores accelerating speed and technology is not being realistic.

Flexibility to leverage highly variable and uncontrollable aspects of the future (e.g., trade laws) is a requirement of all strategies.

Step 3

Select and master any process you believe fits your organization to translate those high-level yet specific objectives into aligned tactical actions. One-year and three-year milestones should be defined.

Hoshin, which specifically includes intermediate objectives, and balanced scorecard are two methodologies, but hardly the only ones.

The process used must integrate responsibility, accountability, time and a constant tie to strategy and long-term objectives. Without constantly reinforcing why, who, when and how, the strategy and your picture of the future will merely be a dream.

The only silver bullet in business is a questioning mind coupled with commitment and vision. If those don’t reside internally, an MBA and its standard tools are not the only misuse of time and money that should concern you.

As published on American City Business Journals