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Companies which “road-tested” the sSWOT note that it creates a “common language” for engaging colleagues and a “bridge” for thinking about a company’s current operations.
A sustainability SWOT (or sSWOT) provides a new twist on the familiar strategic analysis framework. It is a comfortable format for starting a conversation, but it is designed to help push colleagues into unexplored territory. It encourages teams to consider broader connections and opportunities for collaboration inside and outside the company. It challenges teams and decision makers to think about the long-term environmental challenges (like climate change or natural resource scarcity) that will be creating significant business risks or opportunities in the years ahead.

Such changes could arguably fit into a traditional SWOT analysis: an assessment of a company’s internal strengths and weaknesses, in relation to the external  opportunities and threats. However, a study on conducting SWOT analyses with a special emphasis on sustainability and life-cycle analysis showed that companies can identify new risks and opportunities, as well as new ways of communicating complex issues to colleagues. (5) WRI’s sSWOT adapts and strengthens the traditional SWOT by prompting teams to:
  • START WITH THE BIG PICTURE, THEN FOCUS ON THE FIRM: The sSWOT begins with threats and opportunities and pushes teams to think beyond the company’s four walls. It emphasizes connections between environmental challenges and other trends creating big changes in future markets. After starting big, the sSWOT analysis narrows to the company level by drawing connections to strengths, weaknesses, and priority action items.
  • THINK BROADLY TO CREATE NEW VALUE OR ASSESS VALUE AT RISK: The sSWOT focuses on how environmental threats impact not just the company, but other important stakeholders, like customers and communities. These can represent risks, as well as opportunities to create new solutions for the business and the environment.
  • FIND A “COLLABORATIVE EDGE” BY LEVERAGING CORE COMPETENCIES AND ADDRESSING VULNERABILITIES WITH PARTNERS: The sSWOT emphasizes strengths that a company already has and those a company can build by collaborating with others (companies, customers, suppliers, communities). Likewise, it emphasizes weaknesses that a company can address with other stakeholders (and in some cases, competitors).
Companies which “road-tested” the sSWOT note that it creates a “common language” for engaging colleagues and a “bridge” for thinking about a company’s current operations and where it needs to be to be competitive in future markets.
BOX 1


BUSINESS THOUGHT LEADERS: THINK BIGGER AND BROADER TO FIND RISKS AND OPPORTUNITIES


The late C.K. Prahalad—who championed the concept of “core competency”—pointed out that big social and environmental challenges present immense untapped market opportunities for new products, services, and business models. He urged companies to create next practices since incremental improvements on existing best practices would not be enough to tackle these challenges. Companies should think ahead and think even bigger:

Next practices are all about innovation: imagining what the future will look like; identifying the mega-opportunities that will arise; and building capabilities to capitalize on them. (6)

Similarly, Michael Porter—the father of modern corporate strategy— suggests companies should think broadly about society’s big challenges and identify links between business interests and communities’ interests. He and his colleagues point to shared value as a driver of innovation and business growth:

The opportunities have been there all along, but have been overlooked…Society’s needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up. (7)

BOX 2



THINK BIGGER AND BROADER TO FIND RISKS AND OPPORTUNITIES

A study by the MIT Sloan Management Review and Boston Consulting Group showed that companies deriving profits from their sustainability efforts are far more likely to be taking a collaborative approach as they tackle environmental, social, and economic challenges (see Kiron, et al., 2011). They are increasing collaboration across business units. They are engaging customers, local communities, suppliers, policymakers and even competitors. Toyota, as one example, has created partnerships with traditional rivals like Ford and BMW to combine expertise and advance clean vehicle and battery technologies.

Figure 1 | Companies who are profiting from sustainability are more likely to be working with others, including…
A collaborative edge?
Figure 1 adapted from a 2011 MIT Sloan Management Review and Boston Consulting Group survey of nearly 3,000 executives that showed “Harvesters” (companies creating profits from sustainability efforts) are more likely to take a collaborative approach to environmental challenges.