Opportunities and threats do not exist

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

The industry was undergoing huge change (the technologies being used were changing rapidly and so were customers’ priorities) and so it seemed to make sense to apply the well-known ‘SWOT’ analysis tool we had been taught on the MBA: to identify the Strengths and Weaknesses of the business and compare them against the Opportunities and Threats emerging in the marketplace.

The trouble was, the model just didn’t make sense — or rather, it wasn’t useful. Yes, the shift from old technology to new technology was a ‘threat’ to the existing business. 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 again, if we built our own data centres then they would become an ‘opportunity’. The ‘strengths’ we supposedly had created in delivering old technologies were fast becoming an irrelevant weakness. And as the needs of customers changed, so the ability to deliver what they needed yesterday was fast becoming a ball and chain that was holding the business back from delivering what would be needed tomorrow.

What I realised then was that, in a time of change, ‘opportunities’ and ‘threats’ do not exist. And neither do ‘strengths’ and ‘weaknesses’. Yes, change happens. But whether that turns out to be an ‘opportunity’ or a ‘threat’ depends not on the situation itself but on how we choose to respond. What seems like a strength can fast become an outdated weakness. And even a complete lack of ability can become a strength if it enables us to leapfrog competitors: Airbnb, for example, owns no hotels but has quickly become the world’s largest hotelier.

When we automatically label something as an ‘opportunity’ or a ‘threat’ we are making an assumption based on the way the world used to work. And in a time of change that assumption may no longer hold true.

If we realise, instead, that whether something is an ‘opportunity’ or a ‘threat’ depends mostly on how we choose to respond, then potentially everything becomes an opportunity — if we know how to find it.

This is another step towards using change to become stronger, becoming antifragile.

What opportunities and threats you currently face? How could you turn the threats into opportunities? What do you think of as your top strengths and weaknesses? How could you turn your weaknesses into strengths? Is there a scenario (like a global pandemic) that would suddenly turn your ‘strengths’ into weaknesses?

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

You can sign up to daily posts here.

You can buy the book here and the workbook here.

(And remember: you don’t learn to swim by reading about swimming, you also need to practice.)

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.

Leave a Reply