Comprehensive Environmental Scans vs. a Simple SWOT
Whether you lead a government entity, nonprofit organization, for-profit business, or educational institution, it is essential to understand internal and external factors that impact sustainability and success.
Development and marketing experts recommend decision-makers engage in environmental scans and SWOT analysis before starting a strategic planning process.
While environmental scans do describe current conditions, their most important purpose is to guide future decisions.
What EXACTLY is the difference between an “environmental scan” and “swot analysis?”
The primary difference between an environmental scan and a SWOT lies in the scope.
A SWOT analysis typically identifies and addresses INTERNAL factors that can influence future decisions, while environmental scans encompass EXTERNAL realities capable of the same. While each process is independently valuable, decision-makers will capture a more precise picture of their organization’s landscape if they conduct both an environmental scan and SWOT.
This article will highlight a few of the most common approaches organizations should consider as a first step in the strategic planning process.
The SWOT analysis is by far the most recognized approach to conducting an INTERNAL assessment. The SWOT acronym prompts organizations to assess their current internal operating capacity in the following four areas:
Facilitators for SWOT sessions should prepare targeted questions to help decision-makers evaluate all potential strengths, weaknesses, opportunities, and threats before moving forward. (Questions to ask when choosing a facilitator)
There are multiple options for external environmental scans that allow organizations to address current realities at either a macro or micro level.
The PESTLE analysis allows organizations to assess macro-level external factors.
The acronym and focus questions are as follows:
- “Political: Determine how the current direction of the political parties may influence business development and growth.
- Economic: Examine the effects of interest rates, taxes, the stock market, consumer confidence and other economic metrics.
- Social: Acknowledge the changes in lifestyles, advertising targets, ethics, demographics and culture.
- Technology: Evaluate your company’s current technology. Is it up-to-date?
- Legal: Anticipate any new laws and regulations that can impact your operations.
- Environment/Ethics: Identify the environmental factors and ethics that should be considered.” (Source: https://pestleanalysis.com/what-is-pestle-analysis/)
The STEEPLE analysis also offers a deep dive into external macro-environmental factors in the following areas: social, technological, economic, environmental, political, and legal. This approach allows an organization to identify the value service market might place on the organization and define strategic steps to mitigate threats and leverage opportunities.
The SKEPTIC assessment is similar to the PESTAL approach and addresses socio-demographics, competition, environment/economics, political/regulatory, technology, industries, and customers.
Regardless of the approach or scope, each of the assessments outlined above allows decision makers to gather data about their current environment, evaluate the potential impact of both positive and negative environmental factors, and make strategic decisions to guide the organization’s growth.