Opportunities and threats do not exist

Person climbing a frozen waterfall

When I was fairly fresh out of business school I was asked to prepare a strategic business plan for a half billion dollar pan-European technology services company.

The industry was experiencing huge change, both in the technologies being used and the ways they were being applied, and the needs of the customer and the customer’s customers were also changing. It seemed to make sense to apply the well-known SWOT analysis tool we had been taught on the MBA: comparing the internal Strengths and Weakness of the business against the external Opportunities and Threats in the marketplace.

The trouble was, the model didn’t make sense — or rather, it just wasn’t useful. Yes, the shift from old technology to new technology was a threat to the existing business model. But if we moved fast to adopt the new technologies then it could also become an opportunity to upgrade old systems. The rise of cheaper remote programming centres that competitors were building in Ireland (and later India) was a threat if we did nothing. But if we built our own data centres then they would also become an opportunity. The strengths we had created in delivering old technologies were fast becoming an irrelevant weakness. And as the needs of our customers and their customers changed, so the ability to deliver what was needed yesterday was fast becoming a ball and chain that was holding us back from delivering what would be needed tomorrow.

What I discovered was that in times of change, opportunities and threats do not exist. And neither do strengths and weaknesses.

Yes, there are changes in the marketplace. But whether these turn out to be beneficial or harmful depends more on how we choose to respond than on the situation itself. Similarly, what seem to be strengths can fast become outdated weaknesses. Even a complete lack of ability can become a strength if it allows us to leapfrog competitors: Airbnb, for example, owns no hotels but quickly became the world’s largest hotelier.

Simply labelling something as an ‘opportunity’ or a ‘threat’ is making an assumption that the world still works the way it used to. And that might no longer be true.

‘Opportunities’ and ‘threats’ do not exist, except in how we choose to respond

And that means, potentially, that everything that happens can be an opportunity — depending on how we respond.

What are the trends in your marketplace? What seem to be your top three strengths, weaknesses, opportunities, and threats? How might you turn the threats into opportunities? How might a competitor turn your strengths into weaknesses? Given where your customers are going, which response by you creates your biggest opportunity?

Adapted from Inner Leadership: tools for building inspiration in times of change.

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Photo By Laurel F via StockPholio.net

2 Replies to “Opportunities and threats do not exist”

  1. I still find the SWOT model useful but not used alone. It has to be coupled with a market analysis (for instance with a Porter five forces or equivalent and upgraded and other tools). In a fast moving context with disruptive innovations it could be misleading as you pointed out.
    And yes a deep weakness can generate a strength – think about leapfrogging competition through superior innovation.
    Still answot is a solid framework to start the thought process.

    • Hi Pascal,
      Thanks for your comment.
      I agree the SWOT can be a useful framework to start the process, because it is familiar.
      But I still say that in a time of churning every single answer it produces could be a lie and will have to be checked against reality. SWOT is a way of identifying some of the issues to think about — but it won’t show us where our true opportunity lies.

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