The SWOT analysis is a simple tool to identify and fix vulnerabilities in an organization.
When used properly, it provides insights about root causes that might be causing negative outcomes. However, the SWOT is often used as a once-and-done tool without additional analysis and follow-up.
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What are blind spots, and why do leaders struggle with them? In this Let’s Define episode, I will explain the 3 types of blind spots and how to overcome them.
Read my definition of Blind Spots
When you hear the word “risk,” you probably think of either something dangerous (“don’t do that, you could get hurt!”), or an action that is likely to fail (“if this works out, we’ll be rich; if not, we could lose everything”). But risks are actually neutral; they’re neither good nor bad, but simply describe a degree of uncertainty.
We tend to say that risks are either “positive” or “negative.” But what we’re actually describing is the outcome. If a risk brings a positive outcome, we might enjoy new opportunities and pleasant surprises. If a risk brings a negative outcome, we could experience damage, injury, liability, or loss.
The factors that contribute to outcomes are called threats. Although most threats can’t be eliminated (such as consumer purchase habits, economic instability, and increasing reliance on technology), we can definitely reduce the chance that we will suffer from a negative outcome.
I’m passionate about helping leaders to recognize vulnerabilities in their organization: areas where an attack or loss is likely to occur. In this article, I explain the importance of developing your awareness of risks in a strategic context, the “perfect blend” of strategy and risk, and suggestions for managing them.
Continue reading “What is Strategic Risk, and Why Does It Matter?”
