1.5 - About University

C HECKLIST OF POSSIBLE PLACES TO LOOK FOR SWOT ITEMSEconomics Outputs Stakeholders Marketplace❑−−−−−−❑−−−❑❑Financial Resources:debtliquidityreservesinvestmenteffect of inflationexpected economicsCosts:overheadproduction costssuppliesProfitabilityInvestor Confidence❑−−−❑−−−❑❑❑❑−−−Products/Services:product life cyclegrowthmarket shareProduct/Service Mix:breadthspin-offsfocusProduct QualityCompetitivenessProductionCapabilityTechnology:up-to-dateleading-edgeR & D❑−−−−❑❑−−−−−❑❑❑People:current capabilitiesability to retrainflexibility/diversitycommitmentCore CompetenciesSystems:human resourceslogisticscoordinationinformationcommunicationGovernment/LegislationUnionsOther Stakeholders❑−−−❑−−❑−−❑−−❑Customers:stabilitynew possibilitiesserviceMarket:concentrationstate of the industryCompetitors:strengthnew directionsSuppliers:security of supplycost of supplyRisk/benefit of worldevents, e.g., price ofpetroleumThis list could go on forever. A creative piece of strategy clarification is to isolate the criticalfew. This checklist will definitely need refinement—a large corporation would use quite differentfactors from a non-profit; an executive group would use quite different factors from asmall professional services team. [If the information is overwhelming, you may wish to usesome data organization technique like ☛ 7.8 Affinity Diagrams or 10.11 Priority Setting.]An effective SWOT, and the subsequent strategy, are closely related to what Peter Druckercalls a “Theory of Business Specifications.” Drucker specifies four interlocking elements.PETER DRUCKER’STHEORY OF BUSINESS SPECIFICATIONS1. The assumptions about environment, mission, and core competencies must fit reality.2. The assumptions in all three areas have to fit one another.3. The theory of business must be known and understood throughout the organization.4. The theory of the business has to be tested constantly.Reprinted with permission from Peter Drucker, Managing in a Time of Great Change (Truman Talley Books, 1995), pp. 30–31.H OW TO USE THIS LEADERSHIP TOOL“… ignorance of an organization’s past can undermine the development of strategies for its future.”Henry Mintzberg et al., STRATEGY SAFARIIf a strategy is not based on good data, internal and external, it will probably fail. The oldmaxim of computer programming, GIGO—garbage in, garbage out—applies equally well toSECTION 3 TOOLS FOR STRATEGIC THINKING 77