A Fundamental Element of Strategic Planning
By Dana Baldwin

Listing of a company's strengths and weaknesses are a normal part of any attempt at strategic planning for virtually all companies. No shock there! But, why do we perform these analyses, and what do we expect to learn by doing them? To be sure the company is headed in the right direction, a competent, thoughtful review and updating of your strengths and weaknesses is a fundamental element of good strategic planning.

First, we must be sure we are actually doing the analysis of our strengths and weaknesses properly. Some teams just get together and throw a bunch of ideas on the page or flip chart, then go on to their next exercise. Little additional thought is given to the importance or impact of strengths and weaknesses and the reasons for defining them and analyzing them.

To set the stage for analysis of strengths and weaknesses, the team should first discuss why the team is looking for them, what is being looked for, and what will be done with the results when they have completed their work.

Why does your team want to determine what your strengths are? Simply put, your strengths are those things that your company does well which help you perform your jobs, deliver value to your customers and/or give you an advantage over your competition. They are some of the cornerstones you use to build your business and to build and maintain competitive advantages in the market place.

Why should your team determine your weaknesses? Most people answer that the team needs to correct weaknesses in order to remain competitive and effective. The real reason your team should determine what your weaknesses are is to get them out in the open, with everyone in basic agreement that these are actually weaknesses, so the team can determine what to do about each one, if anything.

Why wouldn't your team want to address and correct each weakness? There are other considerations which must be taken into account.

First, we must recognize that we can't possibly be good at everything. For example: Look at WalMart and Tiffany. WalMart appeals to mostly middle and lower economic clientele. It is probable some of the people who might shop regularly at a fine store like Tiffany would not regularly venture into a WalMart, and vise versa. What are WalMart's strengths? Supply chain management and low prices on high volume products. What are Tiffany's strengths? Upscale fine jewelry at high prices, individualized service and appeal to the highest economic groups. What would happen to WalMart if they tried to appeal to Tiffany's customers? And, what would happen to Tiffany if they attempted to appeal to WalMart's customers? In both cases, they would likely lose focus, change the business model to the point where they could well lose their major customer base and suffer in the process. Each company focuses its efforts to maximize results in its own core business, and does not get distracted into areas where it may have limited appeal and expertise. This example helps to show that we need to choose those characteristics (strengths) which help us build our business most effectively and address only those critical weaknesses which truly interfere with or prevent us from being successful.

Second, think about the relationship between strengths and weaknesses. Almost all strengths have off-setting weaknesses of some kind. By correcting the weakness, we may lessen the strength or eliminate it altogether.

For example, Shaquille O'Neal has one of the most powerful bodies ever to play the game of basketball. He is a mountain of a man, 7'- 2" tall, weighing about 340 pounds, with tremendous muscle mass. His game is pure power. He has little finesse, which is not a criticism. His weakness, however, is his relative lack of speed. If he were to try to defend against a guard playing 25 feet from the basket, the guard would likely be able to dribble the ball around Shaq and drive to the basket easily. If Shaq wanted to increase his quickness and speed - his apparent weaknesses - he would have to slim down, probably to less than 250 pounds. While he would likely be much quicker afoot, what strengths he currently has would be lost in the process? At 250 pounds, he would be easily pushed around by other, heavier, stronger centers. In short, he would lose the strengths that make him one of the premier players in the world by correcting a perceived weakness. The conclusion from this is that your team must be very careful to differentiate between weaknesses which must be corrected, and those which are the natural off-shoots of the strengths on which you are building your business.

Third: Your team must be very careful to be objective in its analyses. It is easy to get into a self-critical mode in which everything is a weakness, or, conversely, the team may lead itself into a rosy scenario in which its strengths are overstated and weaknesses understated. In every session, it is a positive idea to have an experienced process leader with no vested interest in the process beyond assuring that the right things are addressed, that conclusions are reached objectively and every effort is made to assure the financial, physical and human assets of the company are used to obtain the highest and best results for the company. We have found that some companies are too introspective, and in looking out at the real world, think that they are the only ones with problems and challenges. Others are just the opposite. They go blithely along, thinking that they are doing very well, with little consideration of what is happening in the real world. Your leader's job is to assure that the team's approach is fair, balanced and objective, so each analysis obtains the best, real world result.

What areas of the company should be addressed? While this varies within each company depending on what the company does and how it operates, generally, the team should look at the overall company strengths and weaknesses as well as the strengths and weaknesses of key areas within the company. It is important to look at how each area interacts with the customer world, both inside and outside the company, as well as analyzing the entity as a whole. Recognize that it may well happen that some areas have different strengths or weaknesses when examined individually, but the company performance may be totally different when viewed as an integrated unit.

When you have laid the groundwork for your team to begin analyzing your strengths and weaknesses by setting out expectations and limitations as discussed above, your leader should throw the floor open for ideas. While there is no single list of appropriate topics that is right for every company, a good list to consider should include (but certainly not be limited to) the following:

At the whole company level:

Impact on others both inside and outside the company
Products and/or Services
Distinguishing features or lack thereof
Competitive advantages/disadvantages
Services or Features we 'wrap around' our product or service
Examples: Post sale service or pre-sale engineering
Speed of delivery
Installation and or service capabilities
Customer attitudes
Customer Perceptions
Attitudes towards customers
Follow through

For each of these areas which pertain to your whole company, you should ask:

What are the things we do which the customer values and will pay for?

Are there things we do which the customer values, but will not pay for? Why?

What do we do for the customer that ends up benefiting us both?
If many of our customer services or products result in a win-win situation for us
both, how can we exploit this to our mutual advantage?
How can we take advantage of this to gain or keep a competitive advantage over
our competition?

What resources do we have within or available to the company that will add something to our relationships with our customers?
What features or benefits do we provide to our customers that are important to
How can we use this to distinguish ourselves versus our competition?

How do outsiders see us and what do they perceive as being our strengths?
What do we provide that makes them want to continue to do business with us?
How can we build on this to sustain or improve our business?

What can we improve?
Are there changes we can make which will make a modest strength even stronger,
or which will add to our competitive position?
Will the customer value this and be willing to pay for it?

Is there anything we do poorly? How does this impact the customer?

Individual areas within the company which might be considered for our analysis of strengths and weaknesses could include: (Each area should be considered based on the particular company, its markets, competition, customers, products and services offered.)

Marketing: How we build general and specific awareness of our company in the minds of our potential customers.

Sales: Those direct activities which result in our customers ordering our products and services.

Production Capabilities/Service Capabilities: Those activities which result in our providing products and/or services to our customers.

Accounting, including A/R and A/P: While not usually included in strengths and weaknesses in most analyses, we suggest that this area be included to the extent that it impacts any interactions with customers. Done poorly, this area can be a major irritant to customers, possibly resulting in loss of business and alienation of customer personnel.

Administration: Does our leadership provide clear, unambiguous goals, communicated effectively to everyone in the company? Do our leaders allow people to function with an appropriate level of responsibility and authority, stepping in only to help guide and assist, or do they micromanage, limiting initiative resourcefulness?

Human Resources: Does HR support the mission of the company effectively, with good communication and even-handed administration of policies and benefits? How does HR contribute to the effectiveness of the company?

Intangibles - such as responsiveness, flexibility, reputation, follow through on commitments, etc.: Each of these depends on the type of company, the need for each of these characteristics in the marketplace and within the company. Each should be considered for its effectiveness both inside and outside the company.

Establishing where the company stands in terms of strengths and weaknesses is an important component of the discovery phase of strategic planning, as it helps establish the base for analysis and development of plans for the future of the company. Done well, this analysis will help the strategic planning team develop effective plans for the future course and direction of the company.

Dana Baldwin is a Consultant with Center for Simplified Strategic Planning, Inc. He can be reached via e-mail at

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