Beyond SWOT: A Surgical Diagnostic for Strategy (That Actually Works for Small Business)
- Homy
- 6 days ago
- 4 min read
The number of times I’ve told clients I don’t advise using SWOT — and watched the look of horror spread across their faces — is too many to count. SWOT is so ingrained that challenging it feels like confessing I don’t believe in gravity.
And yet, in practice, SWOT often does the opposite of what strategy is supposed to do: it obscures the real insights needed to move the business forward.
The SWOT Trap
Here’s my typical experience in a typical SWOT session.
We start with Strengths.
“What are we good at?”
An hour later, we’re debating whether “strong team culture” is a genuine strength or just basic hygiene.
Then Weaknesses.
“Where do we fall short?”
Another hour. Someone resurrects an incident from 2019. Someone else gets defensive. The list grows—but nothing actionable emerges. People leave feeling busy, not clearer.
By the time we reach Threats—the most important external reality—everyone is tired.
We rush it. Write “increased competition.” Move on.
We’ve just spent 80% of our time on internal navel-gazing and 20% on what actually determines survival: the market.
A Brief Historical Sidebar (Because This Matters)
SWOT didn’t start this way.
In the 1960s, Albert S. Humphrey and his team at Stanford Research Institute developed what later became SWOT—originally called SOFT (Satisfactory, Opportunity, Fault, Threat). It was part of a broader attempt to understand why corporate planning failed.
It was meant to be dynamic, participative, and grounded in reality. Which is almost never how it’s used in small businesses today.
Somewhere along the way, it became a checklist. A static inventory.
Something we now even prompt AI to generate.
In the 1980s, Heinz Weihrich tried to correct course with TOWS, starting from external Threats and Opportunities before internal Strengths and Weaknesses. A step forward—but many organisations still fixate on internal lists detached from performance.
The fundamental problem remains the same:
instead of creativity grounded in facts, strategy sessions collapse into polite debates that can fail to deliver any impact.
The Psychological Pivot
When clients are open to a different lens, I borrow from high-performance coaching.
In The Inner Game of Tennis (1974), W. Timothy Gallwey introduced a deceptively simple equation:
Performance = Potential − Interference
His insight wasn’t about learning more skills. It was about removing what blocks the skills you already have.
Gallwey designed this for athletes.
I’ve been applying it to business strategy for years.
A Performance-First Diagnostic for Small Business Strategy
For small businesses—where time, cash, and energy are scarce—we can reframe this into something far more useful than a 2×2 matrix to develop a business strategy.
Instead of cataloguing attributes, we follow a linear, fact-based diagnostic.
1. Performance
Start with the scoreboard. Not opinions. Not aspirations.
Revenue. Margins. Retention. Throughput. Actual numbers.
Example: A consulting firm generates £400K in annual revenue at 40% gross margin.
2. Potential
Given the sector, geography, and available technology—what should be achievable?
Not fantasy. Market reality.
Example: Comparable firms routinely generate £700K–£1M.
A gap appears.
3. Interference
This is where SWOT usually fails. Instead of listing abstract “weaknesses,” we ask a sharper question: What friction explains this gap?
Example findings:
Leads aren’t followed up on consistently
Proposals take weeks due to manual work
The founder spends most of their time delivering, not selling
These aren’t character flaws. They’re interference. And interference can be removed.
4. Strengths (Finally, Used Properly)
Only now do strengths matter—not as a vanity list, but as tools.
Which capabilities can be deployed to remove the interference?
Sales skill?
Technical fluency?
Client trust?
Strengths become levers, not labels.
5. Plan to remove the interference
Now you can make a small number of deliberate choices to redeploy your capabilities, acquire new capabilities, develop new products/propositions, target the market differently, …
In a couple of hours, with proper preparation, you can walk away with clarity and a high-level plan for execution.
Why This Works for Small Business
Small businesses don’t need more frameworks. They need clarity that leads to execution.
This approach provides:
A factual starting point
A reality-based ceiling
A precise diagnosis of friction
A practical way to deploy capability
You don’t build a bigger engine until you release the parking brake.
Summary: The Shift in Thinking
Traditional SWOT quietly reinforces:
Ego (what we’re good at)
Shame (what we’re bad at)
Vagueness (what’s out there)
A performance-first diagnostic asks instead:
Where are we, really?
Where should we be?
What’s in the way?
What can we use to remove it?
That shift alone changes the quality of the conversation.
Final note (and this matters)
This isn’t about rejecting SWOT to be provocative. It’s about respecting the constraints small businesses actually face.
Strategy should reduce noise, not add to it.
If this way of thinking resonates, I work with small business owners to identify and remove the few sources of interference that are holding performance back. Get in touch if you’d like to explore that together.
Sometimes a different question is all that’s needed to unlock progress.
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