Business Insight Zone

I’m asking because of a comment made by Devin, a business student who is one of this blog’s most devoted commenters. He was responding to “When do you kill a business?”

It’s all about SWOT analysis. Strength Weakness Opportunity Threat. You must find your weaknesses and discover how to make them strengths; find the threats looming out there, and figure out a way to convert that threat into an opportunity.

Devin’s right that SWOT analysis can be highly useful. It can give you a brutally clear view of yourself and your marketplace, and it helps you plumb how the factors inside your business interact with external conditions. As I’ve been saying over and over, we should pursue brutal clarity, especially in this economy.

But we shouldn’t try to turn our weaknesses into strengths. It virtually never works, at least in the open fields of endeavor we normally pursue in business.

Wait . . . “open fields of endeavor”? What does that mean? Let me explain.

Open and Closed Systems

Some pursuits are OPEN: they have few rules, and people can succeed in them in a variety of ways. Consider, for example, the massive variety we see in good fiction:

• Plot: Good mysteries have lots of it; brilliant postmodern fiction often has very little.
• Dialogue: Some of Robert B. Parker’s books read like scripts; at the other extreme, H. P. Lovecraft reinvented the horror genre while almost never using dialogue (at which he was terrible).
• Method of composition: Alex Haley spent more than a year on the outline of Roots; Anthony Trollope wrote his many novels without knowing what would come next.
• Length: Yasunari Kawabata wrote timeless stories a few hundred words long; the great Russian and English novelists of the 19th century routinely wrote stories many hundreds of pages long.

Et cetera. There are endless ways to engage a reader. Lovecraft didn’t need to be good at dialogue, and in fact was well-advised not to try. He could take advantage of the openness of the field of endeavor and focus on his strengths — ocean-deep creepiness, for example — instead.

Some pursuits are CLOSED: they have particular and often exacting rules, and success in the overall endeavor requires success in the parts of the endeavor. An easy example is professional golf:

• 14 clubs in the bag — maximum, period — and the clubs must meet the specs laid out by golf’s governing bodies.
• More rules than you can shake a flagstick at.
• Woods, long irons, short irons, putter. Successful pro golfers must — absolutely must — have a modicum of competence with every club in the bag, and be able to hit solid shots from the tee, the fairway, and the green.

Of course, different golfers will have different strengths and styles, and some will compensate for relative weakness in one area by overperforming in another. The greatest players (like you-know-who) will combine strengths across all areas, but any golfer on the PGA tour would be a fool to focus solely on one area of the game.

So what about people in business?

Most businesses aren’t as open as fiction writing — where, after all, you could win legions of fans by talking about battles in faraway galaxies, or by narrating the thoughts of ghosts. But most businesses aren’t as closed as golf, either.

There are a few absolutes: If you are going to work in finance, you must have facility with numbers. If you are going to work in sales, you must be able to deal with people all day every day. Successful COOs make the trains run on time . . . or they’re not successful COOs, by definition.

But on most points, there’s lots of flexibility. You could be a successful manager without being particularly verbal or gregarious. You could be a successful is sales without having a loud or aggressive personality. If you think about the managers and teachers and lawyers and network administrators you know, surely you’ll find that there’s a variety of strengths and weaknesses among them.

And what about companies?

Again, there are some absolutes: If a company’s basic financial practices are weak, it won’t survive. If it can’t sell, it won’t survive. If it can’t fulfill customer orders, it won’t survive. That list does go on a little bit, but in fact only a little bit.

There are companies that never, ever advertise. Some companies have great formal training programs; some do fine without them. Some are great at structured strategic planning; some spend zero time on that. You do the few must-do’s competently, then focus most of your energy on what you’re best at. Everything else, you let slide.

Examples

There’s a well-established school of thought in business that companies, like individuals, ought to pursue success by excelling in just a few areas, and leading from their strongest areas.

• Nike makes good athletic shoes and is competent across the board, but it is primarily a marketing company — perhaps the best in the world — backed by a serious design sense.
• Toyota designs, markets, and sells cars pretty well, but all of its strengths arise from its excellence in manufacturing.
• General Electric is, above all, a giant factory producing general managers of high competence. It combines this strength with world-class abilities in manufacturing and internal finance, and doesn’t worry so much about the rest.
• Procter & Gamble combines Nike-like marketing ability with General Electric-like ability to train general managers. And that about covers it.

Yes, these are oversimplifications. But the point should be clear that companies need not excel in everything.

Here’s the moral of this story:

We’re better served to focus on strengths rather than weaknesses.

And here’s the prescription for action:

• Figure out how open or closed your environment is.
• If it’s open, steer away from weaknesses.
• If it’s closed, figure out how to shore up your weaknesses enough so that they don’t sink you.
• Whether it’s open or closed, capitalize on your strengths first, most often, and most intensely.

~

Image of Bill Grant, still awesome after all these years, via David van der Mark, used under a CC-Share Alike license.

Category: Management, Productivity, The working life