Just like your organization’s overall strategy, the success of your projects can be influenced by both internal and external factors. A SWOT analysis helps uncover those factors at two key junctures: choosing the right projects to pursue and managing their execution.
Projects are an important part of bringing your strategy to life; if strategy defines where you want to go, then projects are how you get there. You can use a strategic SWOT analysis to decide which projects to take on so you can achieve your objectives. It helps you build a balanced project portfolio that:
Identifying your strengths at the strategic level ultimately helps to prioritize projects and ensures you are moving in the best and most efficient direction for your organization.
When looking at potential projects, most organizations first allocate their budget by theme or strategy area. They can then filter projects quickly by identifying those that link to each part of the strategy. If you have a project budget of $10M and you allocate 30% to innovation, for example, then you have a $3M budget for innovation projects.
Suppose all the proposed projects on your list that support innovation total $5M. Now you have to filter down that $5M to $3M to meet your budgeted amounts. Here’s where using the SWOT analysis as a criteria can be really helpful. With regard to each project, consider whether it:
This exercise should give you a sense of which projects will be most meaningful to your organization. If it’s not doing any of the above, it may be just a pet project of one of your senior managers, which isn’t likely to do your organization much good in the long run. Think of the SWOT analysis as the filter that your management team has defined to help you choose the best projects to execute your strategy.
Once your project portfolio has been set, you can also use a SWOT analysis to evaluate the strengths, weaknesses, opportunities, and threats associated with individual high-value, complex projects. A SWOT analysis reveals internal and external factors that will either help or hinder the project’s progress. By highlighting potential risks before projects begin, you can prepare to monitor and manage certain controllable factors to ensure projects achieve their objectives.
Another compelling reason to do a SWOT analysis: Understanding these factors can also help you create an effective RACI matrix, so you have the right people supporting the project every step of the way.
Conducting a SWOT analysis for project management is very similar to performing it in the context of determining overall strategy. Essentially, you’ll want to assemble a group and analyze the strengths, weaknesses, opportunities, and threats associated with any potential projects suggested by leaders or team members. For each project, discuss the following:
Whether you’re doing a SWOT analysis to help decide which projects to pursue or for an individual project, use a SWOT matrix to keep your ideas organized. This clear and easy-to-understand visual will enable your team to leverage all aspects of your analysis in the decision-making and planning processes.
Involving the executive team in your strategic SWOT analysis exercise is a good way to promote transparency and accountability; you should also include people with other points of view. Employees at lower levels and possibly even external parties who may have a connection to the project (a client or a key service provider, for example) may bring to light additional information higher-ups are not aware of, helping to expose blind spots.
From a project management perspective, SWOT promotes teamwork and cross-collaboration. You’re bound to achieve better results when everyone feels included and accountable.
You won’t be able to take on every possible project you identify, so come up with a rating system to help determine which projects are most important. For example, you could analyze your threats using a risk assessment, and your opportunities through a financial impact analysis. Evaluating potential projects in this way will help you home in on those that are more likely to succeed.
For individual projects, a SWOT will reveal numerous internal and external factors to consider. It’s important to be aware of them all, but you don’t have to use them all—at least not at first. Keep them in mind when planning. Some might be better tackled through a separate project or at a later date.
Do a strategic SWOT analysis for projects as part of your strategic planning each year, or in the middle of the year if something big changes. (Sometimes your weaknesses transform into strengths!) And if you’re performing a SWOT analysis in project management, review the analysis after completion of the project to see what changed. Hopefully your organization is in a better position to be even more successful in the future, and your next SWOT will change as a result.