I could not have anticipated that a taunt I first heard in grammar school would be a question I’d later ask business owners in all seriousness. Businesses are most successful when they build upon their unique strengths and take appropriate steps to mitigate critical weaknesses. But recognizing your strengths and weaknesses is easier said than done. Here is an overview.
While it would be impossible to enumerate all attributes an organization might have, the following list will get you started. As you consider your organization’s strengths and weaknesses, please be absolutely honest. It’s easy to think only in positive terms, to see only potential or to obsess over weaknesses. However, giving in to one-sided thinking will not result in actionable information. Better to recognize any areas that need attention as soon as possible so that you can address them before they negatively impact your bottom line. On the flip side, don’t fail to recognize where your organization shines. This may lead to discovery of competitive advantages that will help your business to leap ahead.
Expertise/industry savvy and contacts
- Unique capabilities – what can your organization can do/supply that is not available from competitors?
- Experience/knowledge of principals and staff – do you offer customers an extraordinary level of expertise or experience?
- Industry ties – do you belong to and actively participate in industry associations?
- Influencers – do you regularly engage in two-way communication with industry influencers?
- Media – would it be likely for the media to contact you were there to be a breaking story in your industry?
- Customer satisfaction/fans – do your customers refer or recommend you to potential new customers?
- Loyalty – do you receive repeat orders from customers?
- Diversification – do you have multiple customers in a variety of industries?
- Are your customers financially stable?
- Do your customers expect you to compete on price alone?
- Leadership and top managers – is your leadership team complete, respected, knowledgeable and well connected?
- Overall, do employees have all the skills and qualifications they need?
- Skill level – does your organization ensure that staff is well trained, up-to-date and knowledgeable?
- Dedication to quality and customer service – is your organization’s definition of quality and customer service measurable, clear to all members of your staff and considered in every customer interaction?
- Licenses, insurance and certifications – do you/your staff have all relevant licenses, insurance and certifications?
- Succession plan/pipeline – do you have a clear succession plan and the means to find and attract sufficient new employees?
- Stable – are your suppliers financially stable?
- Raw materials – is it likely there will be an adequate supply of raw materials available at a reasonable price?
- Bench strength – do you have multiple suppliers of key goods or raw materials?
- Are your products and services distinct from those of your competitors?
- Do you have exclusive agreements to sell products and services in your market?
- Do you offer a complementary mix of products and services not found at the competition?
- Is demand for your products and services seasonal and/or tied to events beyond your control? (Weather, subsidies, tax incentives, etc.)
- Patents/trademarks – do you own and protect patents and trademarks?
- Marketing collateral – does your marketing collateral engage and inform your customers base?
- Convenience to customers/suppliers – are your organization’s locations accessible to both customers and suppliers?
- Traffic – if it’s relevant, are you located in a space (either physical or virtual) where your customers are likely to congregate?
- Visibility – is your organization easy and convenient to find both physically and virtually?
- Processes and procedures – do you have efficient, documented processes and procedures?
- Systems – do your systems (computer, telephone, forms, inventory management, etc.) effectively support customers and staff?
- Technology – do you have all of the industry-specific tools and technology you need to compete for business?
- Overhead – is your operation efficient?
- Financial strength – is your organization on sound financial footing?
- Banking relationships/access to credit – do you have on-going positive relationships with one or more banks that would be willing to extend credit?
- Positive cash flow – overall, is your cash flow positive?
- Terms – are you offered and do you take advantage of suppliers’ best possible terms?
Culture significantly influences an organization’s ability to attract and retain employees, respond to problems, and to provide a great customer experience. For more on this, read Karen Utgoff’s recent post on looking at your organization’s culture with fresh eyes.
It is often illuminating to involve customers, suppliers and staff in exploring many of the questions above. You can learn a lot by understanding their views. Also, what might have been accurate in the past may not always be true. Support your assessment with facts whenever you can. Refresh this information periodically, more often if your circumstances (market, customers, etc.) are in flux.
Understanding your organization’s strengths and weaknesses will give you a better understanding of internal capabilities. To formulate a strategy, these need to be considered in the context of the external environment. For more on doing so, see this post by Karen Utgoff on sorting out opportunities and threats.
© Copyright 2014 Laurie Breitner. All rights reserved.