Tuesday March 03, 2015

Summary: SWOT (strengths, weaknesses,

opportunities and threats) often fails to look
hard enough at how risks can cascade through
connected systems.
By David Patrishkoff

10 Shortcomings of SWOT Analysis

If you think that the analysis you use to identify
the strengths, weaknesses, opportunities and
threats (SWOT) in your business is adequate,
beware. It is intended to provide a 360-degree
view of your risks and opportunities but often
fails to fill that requirement because of
superficial applications and failure to look at
risks from connected systems.
If your risk and opportunity analysis techniques
are lacking, you could be very unprepared for
the next recession, disruptive technology or
game-changing way of thinking that could soon
affect you. Too often, the last domino that
struck in the last crisis is the main focus of all
future risk-mitigation efforts. The whole string of
triggers and threatening signals that led up to
that last publicized tipping point and bursting
bubble are ignored.
Here are the 10 most common shortcomings for
SWOT analysis:
Underestimating the role that vertical and lateral
cascading human factors can play and having

fragile back-up plans

Absence of war gaming, stress testing and
disruptive failure mode analysis testing of your
leadership mindset, strategy, work culture,
processes, products and services
Lack of focus on disruptive innovations; you
respond to them but do not create them with
proven innovation-on-demand techniques
Assumptions that cyber security and patents
are safe, so they aren't stress tested with
advanced
cyber-circumvention
and
patent-busting techniques
"Taboo talk rules"; uncomfortable discussion
topics are avoided or not identified with focused
and anonymously solicited inputs from
employees
Ignoring "Trojan horse" risks that are secretly
lurking in the hearts and minds of your
employees or piggy-backing on purchased
technology, software, products or services
Lack of use of "gamification" techniques to
address the most sensitive threats in a
disciplined, humane, engaging and effective
manner
Failure to include effective strategies to attract
and retain key human talent
Failure to identify low-profile threats that create
unstoppable cascading risks - from leadership
to culture to processes to bad performance to
weak responses to critical situations
Lack of use of external perspectives to
challenge group-think assumptions of perceived
safety and robustness
Simple SWOT analysis and risk-management
techniques will not offer the protection required
to survive the next economic crisis or disruptive
technology. KISS concepts (keep it simple,
stupid) have lost their ability to identify and
protect against complex cascading risks. The
world is a fragile, hyper-connected and
cascading system full of surprises that will
punish casual optimists and reward those who
hope for the best but seriously plan for
worst-case scenarios.
The World Economic Forum's 2014 World Risk

2015 Insurance Thought Leadership. All Rights Reserved.

Report describes the global risks that can

quietly cascade across borders and affect
organizations in unsuspecting and surprising
ways from a variety of threatening and linked
factors. The complex dynamics that exist
between developed, developing and emerging
world markets is further complicated by the fact
that many organizations know very little about
the cascading system dynamics within their
own four walls.
Classic methods that attempt to describe the
risk and opportunity landscape for individuals
and organizations have not kept pace with the
rising complexity and interactions between
highly networked workplaces, global economies
and internal and external threats. We have now
entered a new era where we need new ways to
describe and understand the complex world we
have created, which has outgrown the simple
tools we like to describe it with.

David Patrishkoff
David Patrishkoff is president of E3
–
Extreme
Enterprise
Efficiency and the founder of the
Institute
for
Cascade
Effect
Research. He is a Lean Six Sigma
Master Black Belt and the inventor
of a cascading risk management
methodology, which has patent
pending status. Before starting his
consultancy in 2001, Patrishkoff held
many worldwide senior executive
positions in the automotive and
trucking industry.

2015 Insurance Thought Leadership. All Rights Reserved.