The project SWOT (strengths, weaknesses, opportunities, threats) analysis is a technique used by project managers to develop project execution positioning. By positioning a project to take advantage of its particular strengths and opportunities while minimizing weaknesses and threats, the project SWOT analysis helps identify a sound strategy for project execution. The analysis is performed to gain an understanding of and act upon the project’s capabilities and environment.1
Project capabilities—expressed as the project’s internal strengths and weaknesses—
tell us what our project can and cannot do well. At the same time, our assessment of the project environment indicates what opportunities and threats are presented by the environment within which the project operates. Information about the environment, combined with the knowledge of the project’s capabilities, enables project teams to identify factors needed to meet the business and project requirements (see Figure 5.1).
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PROJECT SWOT ANALYSIS
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IDENTIFY PROJECT GOALS
MEASURE GAPS
DEFINE ACTIONS TO RESPOND TO GAPS
Act 1: Implement a new schedule system Act 2: Deploy concurrent process Act 3: Deploy collaboration software Act 4: Provide team leadership training Act 5: Hire specialist or consultant
Key:
SWOT – Strengths, Weaknesses, Opportunities, Threats CSF – Critical Success Factor
Act - Action
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4 1 High 10
Low
CSF 1: Rapid project cycle time CSF n
X CFS 1 Gap
Project Name: __________________________ Date: _____________
Goal 1:
Goal 2:
Goal n:
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Leave Reduce Eliminate
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Figure 5.1: Project SWOT Analysis Template
Measurement of where the project stands regarding these factors provides clues about execution gaps, prompting the team to consider strategies and actions to address the gaps. Awareness of the gaps and a clearly defined response allow the team to for- mulate a realistic project scope and related strategies for attaining the project goals. In short, the project SWOT analysis is an effective tool to include in a project manager’s PM Toolbox because it identifies areas of strengths to leverage and execution gaps to resolve in developing an effective project plan.
Performing a Project SWOT Analysis
Much of the information needed to perform a SWOT analysis at the project level can be collected through tools described previously. For a good start in performing the project SWOT analysis, three information inputs are of vital importance:
1. The project charter with its supporting detail.
2. The project business case.
3. The project requirements.
While the project charter provides knowledge about the fundamental boundaries and constraints of the project, the supporting detail (strategic and tactical plans, project selection criteria, and project mission) helps determine the context in which
THE PROJECT SWOT ANALYSIS 113 the boundaries were drawn. The project business case describes the business environ- ment in which the project will exist, thus providing vital information about capabilities needed internally and external to an organization. Exactly why the project requirements are so relevant for the analysis will become clear in the first step in performing a project SWOT analysis.
Identify Project Goals
Projects are implemented to create value for a firm. Consequently, the project goals define what constitutes value when the project is completed. When it comes to the project SWOT analysis, focus only on the critical goals, those that can make or break the project. For example, if a firm is heavily involved in a time-to-market race with their competition, they may have a requirement that a project shave off 30 percent of what is considered a typical delivery time for a project of that type. This is a significant challenge for the implementing company and its project team, who may have little experience in fast-track projects. Because the company’s management may view this project as an opportunity to enter into a new market, the project needs to be successful. But what does it take to be successful? The answer is in identification of the project success factors.
Select the Project Success Factors
Fundamentally, project success factors (commonly called critical success factors) are areas in which a company must do well in order to be successful.2So what are these areas? The areas come from two major domains. The first domain is the business success factors that are identified in the project business case. The second domain is the goals of the project, which support the business success factors but are execution focused.
The project success factors are those that are necessary to meet the goals of the project. Begin, then, by asking what you need to do well within the project in order to meet or exceed the project goals. In the example stated earlier, rapid project cycle time is identified as a primary project success factor that supports the business goal of early entry into a new market in order to capture market share. That is a very complex project success factor, requiring the synchronization of several components, including concurrent engineering, the use of collaboration software, cross-functional teams with interpersonal skills, and integrated scheduling. Of course, more may be necessary for rapid project cycle time, but these four components are good examples.
Concurrent engineering is about overlapping project activities to speed up the project pace.3Its crux is reciprocal dependencies between the activities that exchange incomplete information, making it more difficult but faster to work.4 In the product development context, that exchange is significantly more efficient if performed in a col- laborative manner supported by collaboration software, which commands significant resources and skills. Rapid product development also demands flexible cross-functional teams, fully equipped with soft, interpersonal skills to handle conflicts and negotiations germane to fast-track projects.5On top of all of this, scheduling this project calls for the ability to juggle multiple critical paths, perhaps including 30 to 40 percent of all activities, with a constant need to use schedule crashing or fast-tracking techniques.
When you are finished analyzing the project capabilities domain, look again at the project requirements, particularly the requirements focused on customer needs and
desires. In which areas in the project environment must you do well to meet or exceed the requirements? You may need to include a first-tier vendor involved in the project execution, as this has been shown to be a proven technique to speed up projects.6 Certainly, possibilities of external critical success factors (CSFs) abound, but the checklist shown in the example titled “Screening Your Environment for Possible Critical Success Factors and Gaps” offers a few ideas of where to look.
Screening Your Environment for Possible Critical Success Factors and Gaps
Here is a short, general checklist of areas where you can find possible CSFs and related strategic gaps:
■ Stockholders
■ Customers
■ Governments
■ Competitors
■ The general public
■ Creditors
■ Suppliers/Vendors
■ Unions
■ Local communities
Again, possibilities are limitless, but note that these environment-related CSFs are more challenging to deal with because, unlike internal project capabilities, they are external to the project and less controllable. Brainstorm with the team to identify ten or so for each domain, internal and external. Rank them and focus on the critical few.
Keep in mind that identifying CSFs without understanding their measurement criteria, dynamics, and interactions is fruitless.
Measure the Gaps
After you have selected project execution CSFs, the next step is measuring the gaps.
A gap is the difference between the ideal and actual level of a CSF. If the CSF in our example from Figure 5.1—rapid project cycle time—were ideal, it would draw a per- fect scoring on all of its four components, including concurrent engineering, collabo- ration software, interpersonal skills, and integrated scheduling. That would mean that the entire CSF and its four components are at a level ideal for meeting the project goals.
The actual level, however, is where you believe you currently stand with regard to that CSF and its components.
A measurement scale is necessary to identify the magnitude of the gaps. Depending on the degree of desired rigor and the time available for the project SWOT analysis, you can choose from among several alternatives. For example, smaller and simpler projects may do just fine by having a straightforward scale of small, medium, and large gaps.
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Other organizations categorize gaps by urgency, perhaps using colors—for instance, green for “no gap,” yellow for “caution,” and red for “danger.” This allows them to send an immediate visual message that describes the gap.
In contrast, a perceptual scale spanning from 10 (the ideal level in example SWOT Analysis) to 1 (the widest gap) more precisely measures a gap. How do you identify a gap with this scale? One way is to assign a narrative description of the state of a CSF’s component to each level in the scale (1 through 10). Then, after a team discussion, each team member assesses the actual level of a component. Further, the actual level of each component can be averaged for the whole team. For example, the actual level of rapid project cycle time for Figure 5.1 would be 4. Comparing the actual level with the ideal one will yield the gap—in our case, a large gap of six units. Whatever gap measuring method you choose, keep in mind that measuring a gap is a subjective judgment, not an exact science.
Having a large gap on internal capabilities is an apparent weakness, while a small gap is a strength. Similarly, where we find a small gap in assessing the project envi- ronment, we can view it as an opportunity. Along the same line, a sizable external gap poses a threat. Expressing gaps as potential threats can help you relate the problem to the project sponsor, top managers, and other stakeholders who may be instrumental in getting the resources you need to address the gaps.
Decide How to Respond to the Gaps
Identifying a gap brings you to another decision: what to do about it. Generally, you have three options: leave it as is, reduce the gap, or eliminate the gap.7
As Figure 5.2 indicates, when your project has few or no gaps in internal capabili- ties and project environment (upper left-hand corner), your best option may be to leave things as is.
Leave as Is
Leave as Is or Reduce
Significantly Reduce Little/No Gaps
(Ample Opportunities)
Significant Gaps (Critical Threats) Status of Project Environment Little/No Gaps (Critical Strength)Significant Gaps (Critical Weaknesses)
Status of Internal Project Capabilities
Figure 5.2: Project SWOT Analysis and Strategies to Act on Gaps
Why would anyone select this option? A lack of time or an insignificant impact of eliminating gaps may be reasons for opting to leave small gaps alone. However, those who decide to eliminate small gaps may find the motivation for doing so in the ease of closing them or in their drive for perfection. With larger gaps in internal capabilities or project environment (the shaded area in Figure 5.2), the case may be more complex.
First, acting on gaps usually requires resources, typically controlled by management.
If your knowledge of the style of management and resource availability tells you that your action may not be fruitful, and therefore not worth the effort, leaving the gap as is may be understandable. However, it is often worth the case to management, especially if you use a language that management reveres: impact to business results.
Take, for example, our case of the six-unit gap in CSF 1 in Figure 5.1. Not acting on this gap may prohibit the company’s management goal of entering a new market of time-to-market focused competitors, resulting in loss of expected sales and profits.
Given the strategic and profit significance of our case, management sees that our gap deserves an action of eliminating the gap. However, if the project was resource or funding constrained, we might choose theleave as isoption.
Receiving an infusion of resources, though, is not an easy scenario in today’s orga- nization, where various projects often brutally compete for their share of the resource supply. Rather, it may take preparing well, presenting the case for the scarce resources, and fighting for them with a passion based on facts. Once the resources have been obtained, developing a plan to reduce the gap is important.
Figure 5.2 also shows that in a situation burdened with large gaps in internal and external capabilities (lower right-hand corner), perhaps the most viable option is to act to significantly reduce gaps; eliminating them may be too challenging.
Define Specific Actions to Respond to Gaps
Reducing or eliminating project execution gaps is a good decision, requiring specific actions to deploy resources. Going back to the structure of a CSF, its components, and the actual state is helpful in identifying actions needed. In our project SWOT analysis example, we list several actions, attacking gaps in all four components: con- current engineering, using collaboration software, interpersonal skills, and integrated scheduling. Some gap reduction efforts can start right away, for example, training on interpersonal skills and integrating the scheduling system. Others, like installing collaboration software, will take a slower path. When the actions are identified and understood, they should be built into the scope statement and, possibly, into the work breakdown structure (WBS).
Using a Project SWOT Analysis
Identifying a sound strategy for project execution is not likely without a critical evalua- tion of the project’s internal capabilities and surroundings, whether the project is large or small. Typically blessed with more resources than small projects, large projects should strive for a more comprehensive, systematic, and formal project SWOT analysis, pre- ceding a detailed scope statement. Applying the project SWOT analysis in an informal manner is a common approach for smaller projects. Faced with little time or resources
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to do a detailed analysis, project managers for small projects should make the analysis part of their mental process, constantly questioning their project capabilities and sur- roundings. They should not be concerned that the analysis must be written; it does not have to be (see the example titled “Ten Minutes Can Do It”).
Ten Minutes Can Do It
Jeffrey D’Esposito, project manager for Procter & Gamble, had this to say about using the project SWOT analysis:
When I first ran into the project SWOT analysis tool, I was very pleasantly surprised and, frankly, very proud of myself. For a long time I was doing a SWOT analysis on my projects without knowing there was actually a formal tool. As a manager of multiple small projects, I never had time to do a formal, written analysis. Rather, I was doing it informally, verbally in ten or so minutes with my team members. We simply called it risk assessment.
But it worked, and it worked very well.
Jeffrey’s story is not a solitary case. Many project managers do the same thing. Know your gaps before you venture into the project. Make them visible.
Ask your manager to help reduce or close the gaps. And if it only takes ten minutes, you can find the time in your busy schedule.
Benefits
The most successful ventures are built on the ability to utilize one’s strengths, mod- erate weaknesses, seize the opportunities, and neutralize threats.8Pressured for time on many concurrent fronts, project managers all too often do not build their projects on this premise. Rather, they dive into detailed project planning without taking stock of their project’s strengths, weaknesses, opportunities, threats, and related gaps. This is where the project SWOT analysis comes in; it takes stock and offers a clear picture of project gaps. The value of the analysis, therefore, is in enabling the project to do the following:
■ Position itself in the best possible way to take advantage of its particular strengths and opportunities within an organization, while minimizing the weaknesses and threats.
■ Uncover strengths that have not yet been fully leveraged and identify weaknesses that can be corrected.
■ Bring to the attention of the senior management team significant gaps that can jeop- ardize the project and get their support to close the gaps and reduce the risk of failure.
■ Continually focus actions on business success factors and project requirements to ensure alignment of project capabilities.
The proactive nature involved in the use of the project SWOT analysis helps build the mentality that it is never too early to bring a defensive shield up. Facing project
execution gaps early helps to define alternative project scenarios and prepare for major project danger zones.