SWOT Your Product Strategy
Creating or updating a product strategy is a critical component of the Product Manager (PM) role. Yet, many companies and product teams struggle to articulate a clear high impact strategy and...
Creating or updating a product strategy is a critical component of the Product Manager (PM) role. Yet, many companies and product teams struggle to articulate a clear high impact strategy and update it as business conditions evolve.
Let's no fool ourself. Building a product strategy is hard. In this article, we explore a technique I used with my teams to help define or update our product strategy. It is called a SWOT analysis.
What is SWOT
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Each dimension plays a critical role in your business analysis:
Strengths (internal): what’s working for your business internally right now
Weaknesses (internal): what’s not working internally
Opportunities (external): what are the external factors your business could capitalize on
Threats (external): what are the external factors that could harm your business
Be aware of the distinction between Internal (S+W) and external factors (O+T). Internal factors refer to resources and experience available within your company. External factors combine the forces that affect your company and business.
This article from SEMRush does a good job going over each dimension, giving real-life examples, and providing visuals like the one below that saved me a thousand words!
Why SWOT
Among all the business frameworks that exist, SWOT is the one that sticked with me over the years. Why is that? Well, it is best explained by this great article written by Caroline Dorsey from HubSpot -those guys invented the Inbound Marketing concept back in the days and became a huge success story.
Caroline Dorsey explains that companies should adopt SWOT because (emphasis in bold):
It gives you the chance to worry and to dream. Adding the SWOT analysis as an important step in your strategic process, you're giving yourself the space to dream, evaluate, and worry before taking action. Your insights in this regard then turn into assets as you create the roadmap for your project or initiative.
It forces you to define your variables. Instead of diving head first into the planning and execution, you're taking inventory of all your assets and roadblocks. These can help you create a more specific and effective roadmap.
It allows you to think more critically and account for mitigating factors. As you identify weaknesses and threats, you're better enabled to account for them in your roadmap, improving your chances for success.
It helps you keep a written account. As your organization grows and changes, you'll be able to strike things off your old SWOTs and add new things as the industry changes. It can be illuminating to look back to where you started as you look ahead at what's to come.
Personally, I adopted SWOT analysis for the following reasons:
Simple framework; fast and easy to adopt across departments and teams
Broadening of your horizons (internal vs external forces)
Critical thinking through a collaborative process
The "written account" provides a POV at a point in time, a reference for stakeholders
Easy to extend with iterations, further in-depth analysis and tweaks
Engagement framework with stakeholders; explains the why
Who shall SWOT
Every organization can benefit from a SWOT analysis. Here's several considerations for product leaders:
Product only or cross-functional SWOT team?
Include all team members in SWOT analysis creation or only SMEs?
Is it a well accepted practice within your organization? Has C-level support?
Do individuals in the SWOT team have what it takes to be active contributors?
How many contributors do you truly need? Hint: less is more
Over the years, I tried out different models. When the goal is to support a PM vision and strategy, I like to start with PMs who are SMEs in one product area. In term of number of contributors, my preference goes for smaller groups, typically four of five.
If the goal is less product centric and business focused, then it is important to recruit a cross-functional team. For instance, you may need to assess a new pricing and packaging strategy to grow the business. It would make sense to combine a team of experts, including product, marketing, business strategy, pre-sales, and P&P (Pricing & Packaging).
When to SWOT
There is rarely a wrong time to do a SWOT analysis. Those sitations may present a perfect opportunity to do a SWOT analysis:
You have no SWOT and lack clarity about your strengths and weaknesses
Your company or business is undergoing large internal changes
A news or event is highly disruptive to your company business or strategy
External conditions in your market are changing rapidly (margin, competition, etc)
Your division is seeking new growth opportunities
You experienced substantial retention in your product team
You are starting soon your strategic planning process
A year has passed since the last SWOT analysis
Since most companies revisit their strategy and GTM before the new fiscal year, early Q4 is a good time window to refresh a SWOT. Start as soon as possible. This extra-time will help you make the process collaborative and avoid rushing to conclusions. Quality work takes time and effort!
How to SWOT
First things first: set a goal. Define the scope and perimeter of your analysis to bring relevancy and keep your team focused on what matters. That way, you avoid spending time on low-impact ideation and stay focused.
Sample goal could be:
Shall we seek growth in our existing addressable market or go after white spaces?
Shall we compete against X and launch a new product offering?
We need to downside our R&D; How do we do it? What shall we focus on?
Make sure to validate the goal with key stakeholders because once you start the process, there is no return. While clarity and focus is key, avoid the pitfall of getting lost in the weeds. At the end, we are talking about contributing to a product strategy for the next few years. Put differently, your goal should sell itself in front of execs based on the perceived business benefits. One or two sentences will do.
Once this milestone is in place, it is time to execute. My favorite execution plan looks like this:
Identify and recruit contributors
Kick-off the SWOT analysis: review goals, explain the SWOT concepts, align on timelines and expectations
Let each contributor do his SWOT analysis offline (few days to a week)
Get together and share individuals SWOT analysis; leave time for Q&A
Ask one contributor to group, summarize, move, cleanup recommendations (ad-hoc) to get a first draft
Schedule a review of the draft SWOT; make necessary adjustments
Brainstorm and draft recommendation as a group
Bonus: write a paragraph that captures the essence of each line item in the SWOT (so you do not loose the details and can provide hard facts to back it up)
From SWOT to Strategy
Another technique consists of creating a TOWS matrix after you completed your SWOT analysis:
This advanced step is very useful to assess different strategies:
WT strategy (mini–mini): how to minimize both weaknesses and threats?
WO strategy (mini–maxi): how to minimize weaknesses and maximize opportunities?
ST strategy (maxi–mini): how to minimize threats and maximize strengths?
SO strategy (maxi–maxi): how to maximize both opportunities and strengths?
This excellent article from SEMRush introduces the Impact Matrix to categorize your recommendations across an effort/impact matrix and is worth considering too.
Before presenting your recommendations to your organization, I recommend to do a dry run. Select friendly stakeholders, watch their reaction and incorporate their feedback when relevant.
If you execute a SWOT with a small group, I also recommend to socialize first the SWOT analysis and recommendations with their peers. They will appreciate to be involved in the process. It is also useful to build consensus and get early feedback and validation.
SWOT Limitations
I've had a pretty good success using the SWOT analysis. It is not to say this framework has no pitfalls, quite the contrary. These articles (here, here, and here) give you a good summary of what can go wrong.
From my own experience, the biggest challenges include:
"Too much" factor: too many contributors, too many ideas, too many generalities
Lack of expertise: unfamiliarity with external factors or how certain functions of the business run internally
Lack of critical thinking: poor business judgement, not a strategic thinker, too accommodating, personal bias
Lack of depth: brainstorming with no facts; no in-depth research and analysis (e.g. competition); jumping to conclusion
Despite all those pitfalls, I regularly use the SWOT analysis. You can mitigate SWOT limitations by working with a smaller and talented team, allow time for producing quality work (hence the "offline" mode).
My last SWOT analysis was performed with a group of five, including me, with senior profiles. I also prefaced it with a three weeks competitive research and readout on the competition's strengths and weaknesses (knowledge depth on external factors). Trust was already established which in turn drives better discussions.
Each company is different and you may not have a dream team ready to take on your next SWOT analysis. As we say, you play the hand you are dealt. Even an imperfect SWOT analysis forces you to think deep about your business environment. Simply enabling your team to acquire depth and exposure to internal and external factors is of huge value!
Conclusion
A SWOT analysis is a strategic planning tool that will serve you well in your PM career. It helps you understand what is working well in your business and what is not. It opens you eyes to internal and external forces. A SWOT analysis, and to an extend the advanced TOWS analysis, help elaborate strategic recommendations and inform your strategic planning.
Though easy to setup, you may end up with sub-optimal SWOT analysis, especially if this is your first time. Making progress is what matters. Expanding your team's understanding of your product and business SWOT is invaluable in the long run.