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Conducting A SWOT Analysis In Project Management
Have you tried a SWOT analysis in project management? Here’s how to pair it with strategic planning to ensure your projects achieve their objectives.
A SWOT analysis—an evaluation of an organization’s strengths, weaknesses, opportunities, and threats—is a strategic planning model that helps organizations identify areas where they’re doing well and areas they can improve, both from an internal and an external perspective. While this tool is typically associated with organizational strategic planning, you can also use a SWOT analysis in project management. Keep reading to find out more about how SWOT can be applied to the selection and execution of projects so they produce the results you expect.
Make sure your projects are actually helping your organization succeed. Download our Project Management Field Guide for step-by-step instruction on how to align projects with strategy.
Project Management: 2 Applications Of A SWOT Analysis
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.
1. Strategic SWOT Analysis For Project Selection
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:
- Builds up and solidifies the strengths of the organization
- Bolsters identified weaknesses (with the possibility of eventually turning them into strengths for the next time you do a SWOT!)
- Pursues opportunities and grows the organization
- Stems external threats
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:
- Capitalizes on a strength
- Helps convert a weakness into a strength
- Seizes an opportunity
- Helps counteract a threat
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.
2. SWOT Analysis In Project Management
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:
- Strengths: What internal factors will set this project up for success? For example, do you have experienced team members in-house or an excellent vendor relationship in a certain area that would provide support?
- Weaknesses: What internal weaknesses may hinder the success of this project or make it challenging to complete? Maybe your manufacturing facility is understaffed, or you have unresolved legal issues that would make it difficult to proceed with the project.
- Opportunities: Are there external opportunities you should take advantage of with regard to the project, such as current public opinions, monetary discounts from business partners, or something similar?
- Threats: Are there external factors, either now or in the near future, that could threaten the success of the project, such as rising costs or the exit of key staff members?
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.
SWOT Analysis Best Practices
1. Include stakeholders from all levels of the organization.
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.
2. Prioritize what’s important (i.e. don’t try to tackle everything!).
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.
3. Continuously review and assess your SWOT analysis to ensure projects align with strategy.
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.
Need help getting started with your SWOT analysis?
If you need some guidance with this process, download our free strategic planning booklet. It includes eight of the most popular templates to build strategic plans, including a SWOT analysis template. Our Project Management Field Guide might also come in handy—it provides a step-by-step process that will help you systematically prioritize your projects against your strategic goals, so you won’t waste effort in the wrong places.