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On knowing yourself Featured

9:41am EDT July 22, 2002

“If you know yourself and you know the enemy, you need not fear the result of a hundred battles.” — Sun Tzu

More than 2,000 years ago, the wise general Sun Tzu admonished his compatriots to constantly gather information to know themselves and their enemies (read: competition).

Unless you understand both — your organization and your competition — you cannot predict, with any degree of confidence, your success.

What does it mean in a business to know yourself? The simple answer is a SWOT analysis, an analysis of your strengths, weaknesses, opportunities and threats.

Strengths. Every organization has strengths that provided the impetus for it to enter the market in the first place. Some are unique; most are relative. Strengths range from technology or patents to distribution channels and logistics, to human resource capabilities and motivation and reward systems. The most powerful ones are those which are unique and cannot be copied.

However, the toughest trick is to get an accurate assessment of your relative strengths. Picture this: You have assembled your top management team to gather input about your firm’s strengths. It’s easy to imagine that each manager will be inclined, perhaps just a little, to exaggerate his strengths or those of his function. Cumulatively, these creeping exaggerations build into a very skewed picture.

The problem is that the firm will implement its strategy based on the assumption that these strengths are accurate. Your firm may fail because of misperceptions.

Weaknesses. Every organization has weaknesses. Some may be common to firms in your industry and some may be unique.

Back to our scenario: This time, some of your top managers duck acknowledging their responsibility for weaknesses in their area. This is easy to understand. Their boss and his or her supervisor are present, and the lowly managers are supposed to say something terminally career damaging such as, “Our distribution channels are not working out; our last ad campaign flopped; we had a failed new product introduction; and our sales costs are out of control.”

Even if true, no one in his or her right mind will be so honest. Because of fear, these facts will be veiled in hyperbole and disguised. Unfortunately, without an accurate analysis, your organization may proceed and be undermined by its false perceptions.

Opportunities. In contrast to internal organizational strengths, opportunities are positive options that exist outside of the company. Unfortunately, opportunities are common to all participants in the industry who have identified them. The competitive advantage goes to the firm that identified them first.

The availability of the opportunity for you is contingent upon your unique strengths. Many people think organizations should simply respond to opportunities as they arise. But companies that actively survey their environments for opportunities are best poised to capture them.

Imagine top management conducting a SWOT analysis. Collectively, they not only anticipate many obvious opportunities, but because of their interaction, they brainstorm and discover others that were less obvious and remain unknown to their competition. These opportunities position the firm to outcompete the competition and gain market share.

The final caveat is not to believe you have found all your opportunities. They are endless.

Threats. Anticipating and systematically identifying threats lets you create ways to prepare and prevail. Taking a proactive stance is always more efficient.

By continually monitoring your strengths, weaknesses, opportunities and threats, you will uncover the information you need to prepare effectively, operate efficiently, gain competitive advantage, constantly make you aware of new opportunities, keep from making serious mistakes and prevail in your industry.

Lance Kurke, Ph.D, is president of Kurke & Associates, Inc., a Pittsburgh-based strategic planning firm. He is president of the CEO Club of Pittsburgh, serves on the faculty at Duquesne University and is an adjunct professor at Carnegie Mellon University. Reach him at (412) 281-2930 or at kurke@msn.com.