Some of the tools and techniques that can be used in program and project management are strengths, weaknesses, opportunities, threats. This has the advantage of being quick to implement and easy to understand. Analysis of strengths, weaknesses, opportunities and threats brings together the results of internal business analysis and analysis of the external environment. The general and useful SWOT application gains greater understanding and insight into competitors and market positions.
Analysis or SWOT Analysis is a strategy or strategy planning method that aims to evaluate the strengths, weaknesses, opportunities, and threats of a company in a project or business. SWOT analysis or SWOT analysis is a surefire strategy in improving the quality of the company’s business. It takes a good strategy to realize the goals to be achieved in the context of an organization, business, or business.
The SWOT analysis method or SWOT analysis aims to describe the situation and conditions being faced in a company. The company or organization can analyze what the company’s strengths are, the advantages of the company, and the uniqueness of the company that distinguishes it from other companies. The SWOT analysis usually includes as many positive things as possible that highlight the strengths and advantages of the company.
SWOT analysis is a key factor that determines the continuity of a company. The results of this analysis can provide recommendations to increase strengths, reduce weaknesses, maintain opportunities, and avoid potential threats. SWOT analysis is also useful for determining which priorities should be prioritized by the company. So you can find out how big the market potential is, market interests and opportunities that can be exploited, as well as the high level of market competition for your product or business.
Learn more about SWOT
There are a wide variety of techniques which can be used to help develop ideas and thinking in a programme or project management environment. Many of these tools have been around for a long time and originated in areas not directly related to PPM.
Tools and techniques
Some of the tools and techniques that can be used in programme and project management are outlined below.
SWOT – strengths, weaknesses, opportunities, threats
A SWOT analysis can be used to draw out the threats and opportunities facing a programme or project. It has the advantage of being quick to implement and is readily understood. Analysis of the strengths, weaknesses, opportunities and threats brings together the results of internal business analysis and external environmental analysis. Common and beneficial applications of SWOT are gaining a greater understanding and insight into competitors and market position.
A similar and related form of analysis is known as PEST, examining political, economic, social and technological factors.
RACI – responsible, accountable, consulted, informed
Table comparing tasks with roles to show those responsible, accountable, consulted and informed Role 1Role 2Role 3Role 4Role 5Role 6Task ACCI A, RTask BA CIR Task C AR ITask DRC A Task E RA Task FAR CI
A RACI diagram is used to describe the roles and responsibilities of the participants in a business or project activity in terms of producing predetermined deliverables. RACI is an acronym formed from the four participatory roles which are:
- responsible; those who undertake the activity or the resources
- accountable; those who take the credit for success or accountability for failure or the activity manager; and there must be at least one for each activity
- consulted; those whose opinions are sought
- informed; those who are kept advised of progress
An expanded version, RACI-VS, can also be used, adding the roles of:
- verifies; the party who checks whether the product meets the quality criteria set out in the product description
- signs off; the party who approves the verification decision and authorises the product handover
A stakeholder matrix is used to map stakeholders in terms of their importance and potential impact on programme or project activity. Stakeholders are the individuals or groups who will be affected by an activity, programme or project. They could include:
- senior managers whose business areas are directly or indirectly involved
- end-users including customers outside the organisation
- suppliers and partners
Effective management of the stakeholders’ interests includes the resolution of conflicting objectives and representation of end-users who may not be directly involved in the activity. Stakeholders’ interests can be managed through stakeholder meetings and specific user panels providing input to a requirement specification. The key objective is to capture, align, record, sign off and deliver stakeholder objectives. One way of prioritising this activity is to use a stakeholder matrix.
Cause and effect diagram
Also known as fish-bone diagram, a cause and effect diagram can be used to represent event causes and potential impacts. It is a graphical representation of the causes of various events that lead to one or more impacts. Each diagram may possess several start points (A points) and one or more end points (B points).
Construction of the diagram may begin from an A point and work towards a B point or extrapolate backwards from a B point. This is largely a matter of preference.
This is a simple representation of risk in terms of likelihood and impact. It requires that the probability of a risk occurring is classified as low, medium or high, with a similar classification for the impact if the risk materialises.
A combined risk classification of high probability and high impact if the risk occurs is clearly an important risk. The classification can be extended to include very low and very high.
Summary risk profile
A summary risk profile is a simple mechanism to increase the visibility of risks. It is a graphical representation of information normally found on an existing risk register. In some industry sectors it is referred to as a risk map.
The project manager or risk manager needs to update the risk register on a regular basis and then regenerate the graph, showing risks in terms of probability and impact with the effects of mitigating action taken into account. It is essential for the graph to reflect current information as documented in the risk register. The profile must be used with extreme care and should not mislead the reader. If an activity has over 200 risks it will be impractical to illustrate all of the risks. It will be more appropriate to illustrate the top 20 risks, for example, making it clear what is and is not illustrated.
A key feature is the risk tolerance line. It shows the overall level of risk that the organisation is prepared to tolerate in a given situation. If exposure to risk is above this line, managers can see that they must take prompt action. Setting the risk tolerance line is a task for experienced risk managers. It reflects the organisation’s attitudes to risk in general and to a specific set of risks within a particular project. The parameters of the risk tolerance line should be agreed at the outset of an activity and regularly reviewed.
The use of RAGB (red, amber, green, blue) status can be useful for incorporating the status reporting from risk registers into risk profiles, and can provide a quick and effective means of monitoring.
A decision tree is a useful tool for enabling choice between several courses of action. It provides a highly effective structure within which options can be explored and possible outcomes can be investigated. It also helps to form a balanced picture of the risks and rewards associated with each possible course of action.
A decision tree is particularly useful when choosing between different strategies, projects or investment opportunities, particularly when resources are scarce.
Also known as a spider chart, a radar chart is a diagram that is used to show the number of risks that different projects are exposed to. Initially, the data is placed in a table that is subsequently converted into a chart. In a radar chart, a point close to the centre on any axis indicates a low value and a point near the edge is a high value.
For more information on any of these techniques please contact the Centre of Expertise for Programme and Project Management.
Let’s take a hypothetical trip back in time to January of 2020. Your house cleaning business revenue has been steadily growing for three years and the forecasting tool in your financial software tells you that you should expect your best year yet. You increase sales goals, plan to invest in new vacuums and vehicles, and hire 20 new employees throughout the year. Through the first month, everything is going according to plan.
Then, on March 11, the World Health Organization declares COVID-19 a global pandemic, much of the world shuts down, and your strategic planning for the year loses all meaning.
Last March, we surveyed more than 300 small business leaders and found that nearly 75% would be altering their strategic plan due to COVID-19, with nearly 20% anticipating “significant” changes (methodology below).
Even in a relatively stable year, the traditional approach to strategic planning—reviewing last year’s results, making incremental adjustments, setting targets, then budgeting, communicating, and executing the new plan—is woefully ill-suited for rapidly evolving markets.
Gartner research has found that executives believe more than half of their time spent in strategic planning is wasted, and the quality of those plans fail to meet expectations.
“Strategic assumptions are often sound when they are first formed, but in today’s environment (they) are more vulnerable to becoming outdated or obsolete due to a rapid increase in the pace of change,” says Matt Shinkman, vice president with Gartner’s Risk and Audit Practice.
While it’s unfair to suggest that any business should’ve been ready for COVID-19, there are strategic planning tools and models that would have been more adaptable when the market was turned on its head.
Let’s take a look at four different approaches that you can use so you’re ready the next time the market takes an unexpected turn.
What are strategic planning tools?
Strategic planning tools are techniques and models that business leaders use to determine where their business is at present, where they want it to be in the future, and which key metrics and initiatives they should track and pursue to achieve that target state.
A few common examples of strategic planning tools include:
Let’s take a closer look, along with strategies for making these tools more adaptable to changing conditions.
1. SWOT analysis
How does it work? In SWOT analysis, strategic planning teams brainstorm to come up with several strengths, weaknesses, opportunities, and threats for their business, then list those items in four quadrants.
Source: Most Popular Decision-Making Frameworks Among Project Managers
Teams can then look for connections between the quadrants (especially connections between strengths and opportunities) to inform their strategy.
How can it be adapted for a post COVID-19 market? The great thing about SWOT analysis is that it can be used for annual strategic planning, or everyday decision making. Adapt SWOT analysis to a rapidly evolving market by using it at the individual project level.
For example, say your office cleaning service was considering expanding just before COVID-19. Using SWOT, you could come up with the following assessment:
- Strength: Efficient, established cleaning teams.
- Weakness: Limited client base.
- Opportunity: Expand services to home cleaning.
- Threat: Market is nearly saturated with existing home cleaning services.
In this case, the business could match their strength to the opportunity to expand and leverage their experienced teams to make headway in an already competitive market.
What type of businesses should use this? While SWOT analysis can be adapted for a variety of situations, it is ideally suited for growth businesses that are able to make significant changes to their strategy in order to take advantage of market opportunities. These businesses might include startups and solopreneur operations.
2. Objectives and Key Results
How does it work: Famously used for strategic planning by Google, Microsoft, and Intel, OKRs work by establishing a clearly defined goal (the objective) along with a handful of key results—that is, measurable checkpoints that build toward the target goal.
Example OKR adjustments
Pre-COVID-19 objective: Double the size of businessPost-COVID-19 objective: Increase business size by 150%Key resultsKey resultsIncrease revenue by $150kIncrease revenue by $100kHire 10 new employeesHire seven new employeesAdd three high-value clientsAdd two new high-value clients
Ideally, teams should only have about a 70% success rate on key results. If teams are constantly hitting 100%, it likely means that the ultimate goal was not ambitious enough.
How can it be adapted for a post COVID-19 market? One strength of OKRs is that they are highly adjustable. For example, if your goal at the beginning of the year is to double the size of your business, and key results include increasing revenue by $150k, hiring 10 new employees, and adding three new high-value clients, you can scale those numbers to account for the market changes. Say, increasing the size of your business by 150%, increasing revenue by $100k, hiring 7 new employees, and adding two new high-value clients.
What type of businesses should use this? OKRs are a good fit for established, profitable businesses that might need to make incremental adjustments to continue growing without throwing off a successful formula.
3. PEST analysis
How does it work: With PEST (political, economic, socio-cultural, and technological) analysis, strategic planning teams weigh socioeconomic factors into their business forecasting. PEST analysis is also frequently modified to include legal and environmental factors (PESTLE analysis). For PEST analysis to be used effectively, it helps to have representatives on the strategic planning team with a working knowledge of the component factors.
How to use PEST analysis for beginners
How can it be adapted for a post COVID-19 market? PEST analysis is somewhat complex, due to the breadth and depth of the factors it accounts for.
On one hand, this necessitates an experienced strategic planning team to effectively use PEST analysis. On the other hand, this makes PEST adaptable for changing conditions. Think of each of the factors that make up PEST as levers. When the market changes, you may have to pull one or more of those levers to adjust your planning.
For example, when COVID-19 struck, you likely had to make major adjustments to your economic and political strategic planning, while your socio-cultural and technological levers might have only needed minor tweaks.
What type of businesses should use this? Due to its complexity and the experience required to use PEST analysis effectively, it is best suited for larger, established businesses with sufficient resources.
4. Balanced scorecard
How does it work: Balanced scorecard is a strategic planning model designed to incorporate both financial and non-financial (customer, internal, innovation) measures. Its precise origins aren’t clearly defined, but it was popularized in a 1992 article by Robert Kaplan and David Norton published in the Harvard Business Review.
To use the balanced scorecard, strategic planning teams seek to answer the following four questions:
- How do customers see us?
- What must we excel at?
- Can we continue to improve and create value?
- How do we look to shareholders?
Teams should answer those questions in four quadrants, linking them together where possible (similar to SWOT analysis), then translate those answers into operational strategy, individual performance goals, and business planning.
How can it be adapted for the post COVID-19 market? The balanced scorecard can be adapted for the post COVID-19 market by looking at it through an agile lens, that is by communicating about your strategy, making iterative improvements, and responding to changing needs regularly. For more on incorporating an agile mindset into your strategic planning, read the next section.
What type of businesses should use this? The balanced scorecard is open-ended enough to be used by almost any type of business, including automotive, financial, healthcare, manufacturing, technology, education, and almost anything in between.
Strategic planning software can streamline your efforts by automating all the tools we’ve discussed in this article, and through features like a strategy map and milestones. Check out our strategic planning software buyer’s guide for top products, common features, and more.
If you’d like a more guided approach, we have trained advisors standing by and ready to help you choose the perfect strategic planning software for your business. Best of all, it’s free for you and you can get started right away. Click here to schedule an appointment for a phone call or start a live chat here.
The strategic planning software guide on Software Advice (Source)
When in doubt, try agile strategic planning
What better way to prepare for an unpredictable market than to use agile planning? It’s not enough to just take the principles of agile project management–communication, iteration, responsiveness–and slap them onto your planning process, though. It helps to have a strategy.
Here are a few key points, from our guide on strategic planning for small businesses:
- Ongoing customer interaction. Your customers determine the success of your business, so their needs should always be accounted for in your strategic planning. Identify your customers or end users and account for them in during every cycle of strategic planning. If you have the resources, soliciting customer feedback through surveys is great. But even if you don’t have that capacity, creating a customer persona and building your plan around that persona is a starting point.
- Organizational accountability. If your marketing team is working toward one set of goals while your research and development team is working toward a different set of goals, your ship will fall apart and sink. Having a good strategy isn’t enough, that strategy has to be communicated and collaborated on across teams. Establish cross-functional teams and meet frequently to ensure strategic alignment.
- Situational-specific strategies. Every good plan can benefit from room for improvisation and recalibration. Whatever your plan is at the beginning of the year, it’s helpful to have space built in for strategic readjustments, whether it’s weekly, monthly, or quarterly. Encourage your managers to surface ideas for improvement throughout the year rather than “sticking to the plan.”
Want to learn more about agile decision making? Read our complete guide, with tips on:
- Gathering iterative feedback
- Balancing alignment and autonomy
- Getting comfortable with good enough
- Placing time limits on decisions
- And Avoiding sloppiness
The Software Advice COVID-19 Reactions survey was conducted via Amazon Mechanical Turk in March 2020 and involved nearly 1,000 respondents all based in the United States. The number of respondents varied by question. The questions were worded to ensure each respondent fully understood the meaning and topic at hand. The information contained in this article has been obtained from sources believed to be reliable at the time of publication.