SWOT is the abbreviation for Strength, Weakness, Opportunities and Threats. In German: strengths, weaknesses, opportunities and threats. It is one of the best-known and most frequently used management methods. Its strength lies in its simple application for many topics in the company. A simple 4-field matrix represents the grid for the SWOT analysis. Despite this simple application, errors can creep into the application. You should know and avoid these. Only then does the SWOT analysis unfold its huge potential in everyday business life.
The SWOT analysis and its importance
The SWOT analysis was developed in the 1960s at Harvard Business School for use in companies.
Even today, the SWOT analysis is one of the best-known and most frequently used methods in the context of strategic planning. The abbreviation SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
With the help of the SWOT analysis, strengths and weaknesses of a company, a department, of processes or of products and services can be found out. This corresponds to an internal company analysis. The method also compares the opportunities and risks in relation to the environment and the competition ( see also the definition of a SWOT analysis ). At the same time, it covers an external environmental or environment analysis. Both analysis types are mapped in a 2×2 matrix. See also the figure below:
The classic SWOT analysis
Incorrect application of the SWOT analysis
In the end, the success of a management method is measured by concrete and goal-oriented measures. In contrast, the SWOT analysis first of all describes conditions inside and outside the company. The success of a SWOT analysis can only be seen in the consequences and strategies derived from it, or their implementation. See also our article ” Successful specification of a strategy “.
When using the actual SWOT analysis, you often come across the following 5 errors:
- Lack of comparison with the competition
- Unstructured derivation of consequences
- Unilateral focus during analysis
- Lack of topic and goal orientation
- Incorrect order of application
In the following, we will go into more detail about these errors and show how they can be prevented.
Lack of comparison with the competition
When analyzing strengths and weaknesses, this should always be done in direct comparison with the competition. A strength or a weakness that also applies to all competitors at the same time can be neglected. The easiest way to proceed is to ask yourself the question: “What are the concrete strengths or weaknesses compared to the 3 main competitors?”. Make sure that not only direct competitors are considered, but also potential new market entry candidates are relevant. For example, an insurance company should not only keep an eye on its direct competitors, but also on platform providers such as Amazon, Alibaba, etc. These have already proven several times that they can expand their market power to related company fields (example: Amazon discovers the insurance business of n-tv, 2021).
Unstructured derivation of consequences
As mentioned, the analysis results of the four SWOT fields only describe a state. For successful management, the derived consequences are now decisive. Avoid the mistake of only looking at the weaknesses one-sidedly or using the opportunities immediately as a strategic guideline. In practice, a structured approach called the TOWS matrix has proven to be advantageous here (see also the TOWS method description ).
The TOWS Matrix is based on a classic SWOT analysis. The results of the company’s strengths and weaknesses and the resulting opportunities and risks are compared in a matrix. Each combination of SWOT fields results in a specific strategic thrust:
- S trengths & Opportunities result in measures aimed at maximum success .
- W eaknesses & Opportunities lead to activities that make it possible to catch up with the competition .
- S trengths & Threats lead to actions to defend the achieved success .
- W eaknesses & Threats derive actions to secure existence .
From the SWOT analysis to the TOWS matrix
Unilateral focus during analysis
Distortions in the analysis often occur, especially when a well-trained team or department gets together to carry out a SWOT analysis. In doing so, individual fields of the SWOT matrix are focused one-sidedly by basking in the strengths or, in the case of weaknesses, by targeting those that come from others. Again and again one finds that a previously formulated hypothesis should be supported by the results of the analysis. The view of strengths, weaknesses, opportunities and risks is therefore perceived to be very limited.
This distortion of results can also creep in if superiors with strong opinions or patriarchal managers are actively involved in the elaboration. The participants then often orientate themselves on their statements in order to avoid any contradictions or resentment.
How can this be prevented?
The group of participants should be as heterogeneous as possible. So they come from different areas and/or belong to different hierarchies. Women and men should also deliberately participate in the analysis together, since their perspectives on things can be different. It often also helps when outsiders such as consultants or suppliers who are able to express independent opinions are involved. Even an independent and anonymous implementation of the SWOT analysis, as made possible by the digital consulting platform from ConWISE, leads to open and unbiased results.
Lack of topic and goal orientation
“Let’s do a quick SWOT analysis!” Managers can be heard shouting. And the flipchart or whiteboard is divided into a 4-field matrix and off you go. Then a confused collection of points takes place. Although a lot of content comes together, the consequences derived from it are not satisfactory in the long term. The problem with this is that the measures follow no recognizable direction. This can be prevented by narrowing down the subject area for the SWOT analysis at the beginning and writing it down. The topic must always be visible or visible to every participant.
The topic can include a specific product, service or process. Make sure that the description is as specific as possible. Example: instead of “SWOT analysis in the service area”, it should read “SWOT analysis for the introduction of a new service in the after-sales area”.
The specific naming of the topic or goal also helps you to carry out the environment analysis, i.e. to record the opportunities and risks. This is because the influencing factors to be considered can be almost infinite. There is a multitude of political, economic, social and technological developments. The solution is simple: focus on the influences that are gaining in importance because of the named topic/goal.
Incorrect order of application
We recommend that you start with the internal analysis – the company – and thus go into the strengths and weaknesses first. These can usually be formulated and described very specifically. You get fast results in the analysis and are then motivated to dedicate yourself to the external analysis – the environment. It also helps you to limit the external influencing factors if necessary, in that the strengths and weaknesses that have already been recorded serve as a guide.
In the area of chances (opportunities), these are often described as concrete options for action. However, this derivation of strategic options should only take place in the next step of the SWOT analysis. During the analysis, the observations of the environment are in the foreground. Example: “Participation in a startup to develop a new AI application” (specific option for action) versus “Many new startups in the field of AI” (general description of the market environment with potential opportunities).
In a broader sense, an incorrect order of application can also apply to the timing of the SWOT analysis. This should always serve as a starting point for an actual strategy development and not vice versa. Otherwise, the analysis would take on an alibi role in order to legitimize a predetermined strategic direction. This also applies to activities that have already been carried out and whose justification is only provided by a subsequent SWOT analysis.
Conclusion
Although the SWOT analysis has been used in almost every company worldwide for decades, errors can still creep in today. At first glance, this is often not even recognizable, because the SWOT analysis usually brings up a large number of points. In terms of quantity, the management and the participants can usually be very satisfied. Mistakes in the application of methods are noticeable: when it comes to the qualitative implementation of the findings. The results fall short of expectations. This becomes particularly clear when the results are re-evaluated after some time has passed.
If those responsible and initiators of the analysis know the errors shown here and avoid them accordingly, the SWOT analysis is and remains one of the most effective tools in strategic planning. A simple way of preventing the errors listed from creeping in in the first place is to use the respective SWOT and TOWS frameworks on ConWISE’s digital consulting platform.
The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!
Open Strategy – or trust in your own employees!
/by Christian ArentzenIdeas about business strategies are slowly changing. Until now, strategic management was the exclusive preserve of the executive level or management. Sometimes management consultants were also commissioned to shape the future for their own company. The latter often led to acceptance problems and slow implementation. With the Open Strategy approach, a radically new way of strategy development is now being taken. In the following, the approach is described in more detail, the main changes and advantages compared to the classic approach are shown and finally there are some practical tips on how to apply it in your own company, department or division.
What is Open Strategy? A definition
Open Strategy is about radically opening up the strategy process by involving the company’s own employees as well as external third parties or even competitors in strategy development and formulation. Instead of developing strategies only within management and advisory circles, they deliberately push for access to other sources of knowledge, such as Fontline employees, customers, partners and suppliers. This approach was developed by professors and advisors Christian Stadler, Julia Hautz, Kurt Matzler and Stephan Friedrich von den Eichen over the last 2-3 years. You have recorded your knowledge in the book of the same name (Link).
The main advantages of using the Open Strategy approach are as follows
The wisdom of many
In the Open Strategy approach, strategy development is not limited to a small circle of top managers or external consultants. The more people are involved, the more diverse the approaches. And this principle already applies in the analysis. This is because scientific findings show that frequent mention of strengths, weaknesses, opportunities or risks also indicates high relevance. In his book “The wisdom of the many – why groups are wiser than individuals”, James Surowiecki goes into detail as early as 2004 on the fact that the accumulation of information in groups leads to joint group decisions that are often better than the solutions of individual participants (so-called collective intelligence). Leaders would therefore do well to increase the probability of success of a strategy with the help of collective intelligence.
Diversity instead of single-mindedness or the crux of confirmation bias
If the strategy development is done by a few, the results can quickly become one-sided. Thus, political interests of individuals usually stand in the way of a promising strategy. This behaviour can be traced back to the so-called confirmation bias. In the process, people and especially alpha animals in leadership positions see their own convictions confirmed by others. In this way, information is selectively chosen that fits one’s own perception.
On the one hand, novel strategies are based on courage and thinking outside of familiar patterns. The confirmation bias also often applies to so-called industry experts. Strategy consultants who have a specific industry focus tend to use already known scenarios from the industry environment for strategy development. So the chances of developing new innovative strategies are slim. It is better to involve cross-sectoral experts.
External experts, however, do not necessarily come up with more innovative ideas than the company’s own staff. Especially when the involvement of the employees comes from different hierarchies and areas. Employees who are new to the company can also often bring in new ideas and directions without bias. Accordingly, Open Strategy brings out more innovative or even disruptive ideas than conventional methods.
Greater willingness to implement or prevent the ‘not-invented-here’ syndrome
A major advantage of the Open Strategy approach is that implementation fails less often. This is simply because the staff involved also feel responsible for successful implementation. Changes are more likely to be accepted if they are brought about by one’s own ideas. This behaviour is sometimes also based on the “not-invented-here” syndrome. This is an aversion, i.e. a negative attitude towards ideas and innovations that are brought externally to a company, a person or another department of the same company. The more and earlier the staff from various company units are involved, the greater the willingness to implement the ideas and strategies.
More realistic instead of theoretical artefacts
Strategies in which the company’s own employees were involved in the development take better account of the company’s conditions. Outsiders are not familiar with the current situation in the company, do not know about investments that have just been made or are simply too far away from the day-to-day business. The latter is one of the main reasons for involving external parties in strategy development, in order to prevent possible operational blindness. However, this is often overrated or used as a pretext for commissioning. In many cases, their own employees are quite capable of getting rid of operational blindness if the questions are asked appropriately and they do not experience any interference from the supervisors present. Measures proposed by the workforce are more concrete and tangible. The people know exactly what could be done, also in detail, because they deal with the processes and operational issues on a daily basis or are in direct contact with customers and suppliers.
Simple is not always the best strategy, but the best strategy is always simple
Simple and comprehensible should be at least the mission and vision, which should reflect the strategy as guidelines. Storytelling is an essential tool for successful communication in today’s world. And this also applies to internal company communication. The more people from the company were involved in the strategy development, the more stories there are to tell. Managers as well as experts tend to use many anglicisms. Technical terms that are on everyone’s lips right now. And so these “buzz words” are often included in the strategy formulation. But this encourages misunderstandings among staff and sometimes counteracts the actual message behind it. Strategies are there for all to follow and understand what needs to be done to implement them. Keep them simple in communication and find out early on by involving staff.
Meets the expectations of a new generation
The classic approach to strategy development is also at odds with the new world of work (New Work). Employees want to be involved in the future direction of the company or division. And not have them presented top-down by the managers for implementation. It would also be fatal not to take into account the opinions and ideas of Generation Z, because they work with different means of communication, have a distinct value system and are open and receptive to technical innovations. Many of the young workers in the private sector make use of the latter in particular and can thus contribute significant innovative impulses to the development of the strategy.
To sum up, here are some practical tips for applying the Open Strategy approach
Näheres dazu auch im Artikel Strategy development in the 21st century – time for a new approach
Conclusion
The traditional process in which top management retreats with its team of advisors and works out a strategic plan behind closed doors has had its day. Today, it is no longer enough to communicate the results of this work in the form of powerpoints to employees in town hall meetings and then set a specific budget for each area so that they can implement the strategy. Managers already benefit from the involvement of their employees in the analysis. No one knows the company and the industry as well as she does. It is important to get rid of old thought structures that say that strategic management is the sovereign task of the top management. One would disregard the great potential that lies within one’s own company if one relied instead on the knowledge of a few or a few selected management consultants.
A turning point in strategic corporate management
/by Christian ArentzenWe are currently experiencing a turning point, both politically and socially. Previously valid norms and modes of action are being questioned. Yesterday’s common practice is stopped today. But what does that mean for companies? Does corporate leadership need to rethink? Yes, a turnaround in strategic corporate management can already be seen today.
The business environment is changing significantly
Whether it is new spending in the billions on military defence (Capital, 28.2.2022), an acceleration of the energy turnaround (SZ, 28.2.2022), or the strengthening of the semiconductor industry in Europe (EU, 8.2.2022): not all of this comes as a surprise, but we are now challenged to master several challenges simultaneously. In order to achieve this, managers must fundamentally question their actions and adapt them quickly. In short: the corporate world is also facing a turning point. Regardless of whether it is a medium-sized company or a corporate group, corporate management under the yardstick of constant economic growth is a thing of the past.
A turning point in strategic corporate management – What are the triggers?
Trigger of turning point in strategic corporate management
Some changes and influencing factors have been known for some time, such as demographic change with its effects on the skilled labour situation. The call for sustainable and environmentally conscious management is also not new. What is new, however, is the emphasis on how these changes are now being demanded by politics and society. Awareness of change and its consequences has also increased. This brings opportunities, but also risks. One example: Since COVID-19, the topic of digitalisation has definitely been at the top of companies’ agendas. At the same time, however, the dangers of cyberattacks are also increasing. In many areas, we are only at the beginning of the technological possibilities. Those who lose touch here will lose competitiveness. As of today, we see the main drivers as follows:
Each of the drivers of the turnaround identified here would in itself have a considerable influence on the orientation of companies. But it is precisely the sum of the influences that will massively change companies.
How can companies and managers respond to this?
Managers are now challenged to strategically question or even reposition their company. A primary goal is to strengthen a company’s resilience in order to cope with temporary shocks in the value chain. Not only internationally active corporations, but also small and medium-sized enterprises now need an adapted strategy for the coming years. And not as an end in itself, but for your employees, customers and investors. This is because a change of era always creates uncertainties among those involved, which are best countered with clear strategic corporate management.
We advise leaders not to waste time. Start strategically repositioning your company now. You don’t need a big throw to do that. It is important that you define the strategic guard rails at the beginning. Based on this, you will develop the corresponding initiatives. So they take an iterative approach instead of just holding a one-off strategy workshop. It is important that you document your strategic work results, because only then will they be concrete, understandable and lived by everyone in the company. Involve your own employees as well. They know your company and the market environment best – even better than some external consultants. They often already have an idea of what concrete solutions and measures could look like. In addition, changes in which the own employees were involved are also supported. You can also read more about this in our blog article Concretising a strategy for successful implementation.
Our detailed white paper on the turning point in strategic corporate management
We have described all the above influences in detail in a white paper. To this end, we have compiled a large number of strategic recommendations for action. Here you can download the document free of charge (German version).
Free whitepaper
If you want to start creating your strategy now, the ConWISE platform can support you with the individual steps. Test the easy-to-use application with a free user account. If you have any further questions, please do not hesitate to contact us.
The first 100 days: 5 tips for leaders
/by Christian ArentzenWhether you are taking on a new leadership role with your current employer or moving to a new employer, the “first 100 days” will be critical to how you are perceived. It would be fatal to let three months pass by without achieving initial successes. So use your first 100 days strategically. The following 5 tips will help you:
Tip 1: Involve as many people as possible around you
In the first few days and weeks you should mainly listen and take stock. Although the focus is on your “own” employees, you should also involve your superiors and managers from other departments. Ask for feedback on suppliers and external service providers regarding past and future cooperation. The impulses and advice of external management consultants can also be very helpful. But avoid larger consulting engagements and presence in the house. On the one hand, the high costs of consulting work can speak against you as a prudent manager. On the other hand, the involvement of consultants always creates distrust among their own employees as well as questions about their own competence. You should therefore only use external consultants on a selective basis and ideally use digital consulting services for support.
Tip 2: Identify the problems but also the opportunities
You will spend some time analyzing your new environment. Be careful not to focus one-sidedly on the problems and get lost in the details. Instead, always work out the chances and possibilities for the future. This also applies if you received the new management position with the advice to solve the existing problems. Ultimately, it’s a look back and you’ll be appreciated when you’ve fixed the problems, which equates to meeting expectations. However, you will be viewed as a manager with great prospects for the future if you can also show the opportunities for further development. So always pay attention to the weaknesses and strengths, to the risks, but also to the possibilities in your analyses. Combine existing strengths with emerging market opportunities and use methods such as ConWISE’s ‘Competitive Advantage Finder’.
Tip 3: Work out strategies together
After you have analyzed your environment and the current situation, you can develop initial strategies and prepare and make decisions.
It is recommended that you work out these strategies together with your employees. Also include other areas of the company with which there is a dependency. It is also advisable to call in your superiors from time to time. Less as part of the elaboration than as part of a feedback provider and early sponsor of your plans. The occasional use of a consultant in the sense of a sparring partner can also be very revealing. But here, too, the strategy should be developed in-house and not outsourced to a consulting firm. Ultimately, it will be your employees who will then put these strategies into action. You will also get to know your employees even better. You can see which employees have similar ideas as you. And you can see who finds change difficult or easy.
Tip 4: Always proceed in a structured manner
Your procedures and decisions should be clear, transparent and structured. Even if decisions are accompanied by negative consequences, employees should know how they came to the decision. Use structured methods for decision-making. In this way you make it clear that decisions are not made purely from the gut, but that you have dealt with them and taken different perspectives in advance. A good example here is the application of the Six Thinking Hats method. In this way, employees perceive decisions as fair, well-reflected and appropriate. But the development of strategies should also be structured and not the expression of a random product. Incidentally, a large part of the consulting service consists of using a structured process. You can also use these methods for yourself.
Tip 5: Show concrete results and initiatives
Concept papers can make an impression at first glance, but they don’t really get you anywhere if they can’t be implemented. Always pay attention to concrete initiatives, but don’t fall for actionism. You can do this, for example, by always concentrating on the 3 most important activities. Meet qualitative goals and statements with measurable target values, specific deadlines and responsibilities. One likes to hear the arguments “we’ve never done it like this before” or “it doesn’t work”. In these cases, ask for specific improvements or changes that can also be implemented in the short term. Always confront your employees with the question. “What could we specifically start doing or tackling differently tomorrow?”. Enter your projects in roadmaps and set concrete goals for your area and the individual employees. A good approach that supports you is, for example, the OKR method – OKR stands for Objectives and Key Results and is a management system for targeted employee management.
Conclusion: Successful start in a new management position
The 5 tips listed here for a successful start in a new management position are not only relevant at the start, but should form the basis of your daily activities.
You can use the necessary methods immediately on our digital consulting platform. This does not require familiarization with theoretical concepts or participation in workshop series or seminars. ConWISE is practice-oriented, interactive and can be used immediately in a team. Contact us!
AI Strategy: 10 AI Applications You Should Know
/by Christian ArentzenA large number of today’s business processes will change through the application of artificial intelligence (AI). Today we only see the tip of the iceberg of the new possibilities. But its use is no longer a vision of the distant future, but is already advanced in many areas and can be used by companies. Managers should therefore already be dealing with how the use of AI will look like in their own company. Which applications are affected and how this can be incorporated into a suitable AI strategy. The following article describes 10 current and concrete AI applications of AI in everyday business. AI applications that can be the first step towards more comprehensive AI use.
Which processes are suitable for AI?
If a business process has at least one of the following 3 characteristics, the use of AI should be examined more closely:
Against this background, the use of AI in order processing or data processing is well suited. In many companies, these activities will still be carried out by employees. These tasks are typically repetitive, high-volume, and rule-based processes. This makes the use of artificial intelligence easy to implement and pays for itself within a short time.
10 AI applications with potential
The following 10 AI applications have emerged as of today in corporate use. Most applications can be used regardless of the industry and company size.
(1) AI-powered virtual assistants
AI-powered personal assistants like Amazon Echo, Google Home, and Apple HomePod are examples of virtual assistants that many are already using in their personal lives. However, the systems also unfold their benefits in the corporate sector. Either in use as a management assistant or as additional services for customer assignments. The systems will become increasingly intelligent in the coming years and will be able to perform many daily activities better and better. Against this background, it is already necessary to strategically consider to what extent it makes sense to link your own product world with the usual personal assistants.
(2) AI market research
Various AI-based applications such as IBM’s Watson or Amazon Web Services can conduct extensive research for companies. This also includes competitive analyzes or the creation of detailed reports. In the future, such tools will use companies’ internal data to make amazingly accurate predictions about the success of new products or services.
(3) AI-powered CRM and sales tools
With the help of AI, every step of the sales process can be improved – from generating leads and categorizing them to personalized marketing messages. All major CRM software vendors already integrate AI capabilities into their tools. Today it is no longer a problem to predict customer needs in a timely and targeted manner and to analyze the entire purchasing process in detail. The AI development in this environment is already very advanced and offers companies a good introduction to AI, since data is often available here and the training of the AI system is possible with manageable effort.
(4) AI-generated content for digital marketing campaigns
Virtually every digital marketing activity can be made even better through the use of artificial intelligence. One of the most powerful examples of this is the automated generation of content in text, audio or video form. In the USA and China in particular, sports reports, stock market data or the current weather are created purely by AI. A Chinese news agency has had the news spoken by two virtual employees since the end of 2018 ( see the FAZ report of November 9, 2018 ). For companies, this results in opportunities to have social media posts, press releases and blog articles generated automatically.
(5) AI-powered email marketing tools
When it comes to email marketing, most companies already have a lot of valuable data. This makes the use of artificial intelligence for email marketing campaigns predestined. In doing so, e-mail titles can be analyzed with regard to their opening rate and the optimal length of e-mail texts can be found out. Here, AI is both a measuring instrument and a text generator.
In 2016, Boomerang Respondable was the first AI assistant to help create perfect business emails. The software uses machine learning algorithms trained on hundreds of millions of messages.
(6) AI-based customer service
For many companies, it is a goal to constantly improve customer service. Many service departments have been working with chatbots for quite some time. For example, they can automate interactions with users, support business processes, obtain information or even perform tasks of a personal assistant. But only in recent years have they gained popularity among users and businesses. This is also due to advances in artificial intelligence and the popularity of messaging apps. Many companies today are still using chatbots that are “rules-based” and work without AI, but in the future most of them will be AI-powered and even voice-controlled.
(7) AI-driven accounting
Robot-supported process automation will change the number-heavy business areas in particular. This includes financial management, accounting and controlling. Since most of the day-to-day work of accountants is repetitive and rule-based, most of it can and will be automated by AI. But it will also affect the interfaces to external service providers. Tasks for which tax consultants and auditors are still needed today will then be covered to a large extent.
(8) AI-powered recruitment
One of the areas where the use of AI has been criticized the most is in human resources and recruitment. Although the use of various AI technologies can save time and resources in the hiring process, critics argue that many of them are biased and unethical. Despite the skepticism, however, it is obvious that AI can be very useful in the pre-selection of applicants in several respects. From analyzes of written application documents, social media posts to language evaluations. As people develop in life, current interests and future desires for change must be taken into account equally.
(9) AI-enabled legal activities
As with accounting, many of the activities performed by lawyers are repetitive and rule-based. When reviewing contracts, AI can show very high accuracy rates, and at a fraction of the time it would take a human. The legal platform LawGeex, for example, uses AI to review and revise contracts based on given legal guidelines. Changes in the law can be taken into account promptly and their consequences can be shown. This proves to be particularly advantageous for companies that operate in the international market.
(10) Robotic process automation
Similar to AI, the basic idea of robotic process automation is to identify high-volume, repetitive tasks. An example of this is the processing of orders. Most robotic process automations are currently still rule-based, meaning they do not contain AI. However, it is expected that most software programs of this type will be AI-powered in the future.
Conclusion
It is not a question of whether AI will be used, but when and in what form. The possible uses are already diverse and the applications are increasing day by day. Regardless of whether a company wants to address its customers more precisely, deliver better service or streamline internal processes, the use of AI cannot be avoided. External pressure will also increase to make greater use of the possibilities offered by artificial intelligence.
Managers today have to think intensively about the structured and targeted use of AI in their company. For this purpose, ConWISE offers an AI strategy framework that can be used to easily plan the use of AI for the future.
The ConWISE team will be happy to show you exactly how this works during a non-binding appointment.
Contact us!
How do you find the right management consultancy?
/by Christian ArentzenAll management consultants ultimately offer a service. And as with all services, the difficulty at the beginning is not knowing exactly what the end result will be. It is this uncertainty that worries many executives when it comes to hiring a management consultancy, especially since the usual fee rates often add up to five to six-digit amounts in the end. So what to do? How do you find the right management consultancy for you? We see several possibilities, which we will consider in more detail below.
Personal recommendations
Address the personal network
One of the most common ways you can go is to ask your personal environment for recommendations for good management consulting. In Germany alone there were almost 200,000 consultants working in more than 15,000 consulting firms in 2020 (according to BDU – Bund Deutscher Unternehmensberater in 2020). There is a high probability of finding someone who has already made contact with one or the other consultant.
It is best to ask colleagues who are in a similar position to you or who have already had a comparable task. Describe your project as precisely as possible, because there are corresponding experts for every topic. If you ask people you know, they can also assess whether a consultant fits their own personality or not. A special tip: maybe you know or have had contact with a valued management consultant from the past. Even if this is out of the question for the assignment in question, they usually have a network of colleagues who they can assess well. Last but not least, it is also important to him/her to help you and thus to be commissioned as a consultant again next time.
Use of the big players
A large, well-known management consultancy such as McKinsey or BCG is usually expensive, but a few arguments reduce the risk when making a selection. The number of consultants who work there. If a consultant doesn’t fit, they can usually be changed overnight without having to terminate contracts. In principle, however, it is also the case that the selection process in management consulting for new colleagues is based on certain similarities. While this is not always desirable in terms of divergence, it does allow service delivery to level off at a consistent level. The tools and the thought patterns of the consultants employed in the company are similar. And finally, the large consulting firms also have extensive knowledge and case studies. Many problems have arisen in one of the global consulting units. If, for various reasons, a large management consultancy is not an option for you, but you are looking for independent and freelance management consultants or technical experts, the following two ways are possible alternatives.
Selection via portals
Digital professional networks such as LinkedIn or XING have proven to be suitable for marketing, especially for freelancers and self-employed consultants. Xing also offers its own project postings for freelancers. But how are you supposed to separate the wheat from the chaff here? Well, on the one hand, there are recommendations for certain expert knowledge. Unfortunately, this is only of limited significance. On the one hand, it is usually close contacts who recommend one and on the other hand, “the knowledge” is very different. Also, pure specialist knowledge is not the decisive criterion as to whether someone is a good consultant or not. But what you can definitely do is check if the candidate is connected to someone who is connected to you. In this way, an existing contact can be asked for an honest assessment. The risk remains high, however, because despite flexible contracts, a few days as a consultant quickly accumulate before you can get a real impression of the actual work. The following last option could help here to find experts and consultants via a digital consulting platform and to get an idea of the content in advance without generating large consulting costs.
Contact via a digital consulting platform
A digital consulting platform such as ConWISE.de is breaking new ground when it comes to finding and integrating management consultants.
Use of a digital consulting platform such as ConWISE.de
Accompanying consulting services such as impulses, ideas and practical examples are offered by the platform partly using artificial intelligence (AI). Such a platform also already specifies a step-by-step method sequence and automatically creates reports on the results. This already eliminates or reduces the consultant expenses for administrative and structural tasks and the risk of high consultant costs is significantly reduced. The need for advice is therefore concentrated on technical and company-specific support. In this case, ConWISE, for example, offers the option of contacting a consultant or expert directly and hiring them for limited-time tasks. This can be, for example, a review of the strategy development or the selective moderation of an online workshop. In this way you get to know the skills and personality of a consultant directly and can then conclude further contracts directly with the desired person.
Conclusion
The old adage “Those who have the choice are spoiled for choice” also applies to the selection of a suitable management consultancy. Nevertheless, digitization is creating new opportunities here as well.
The new digital consulting platform ConWISE is a good example of this. On the one hand, it reduces the use of consultants by digitizing consulting processes and enabling your own employees to work out structured concepts and solutions. On the other hand, the digital approach enables consultants to be called in when required and simply at the push of a button. The risk of encountering an unsuitable consultant is minimized and the effort is kept small. If, based on the support provided on the digital platform, you come to the conclusion that the chemistry is right and the expertise is there, then you have found the right management consultant for you. The ConWISE team will be happy to show you exactly how this works in a free demo presentation. Contact us!
New Normal: how has Corona changed your company?
/by Christian ArentzenCorona with two lockdowns has hit every company worldwide. There were crisis winners, but also companies that had to file for bankruptcy. A pandemic like Corona has a significant impact on companies. Nothing will be the same afterwards, even if many are calling for a “back to normal”. So there will be a new normal after Corona for companies. But what will this look like in your company? What lessons do you draw from the past few months? What opportunities arise in the longer term and what risks should one be prepared for? Now is a good time to do a business analysis. Using a New Normal analysis , the main influences of the Corona Pandemic can be easily evaluated for your company.
A simple method is enough
In order to determine how well your company is prepared for the changes caused by Corona, you do not need complex analyzes or even a team of consultants. A simply structured method such as the SWOT analysis that you carry out with your employees is sufficient. Strengths and weaknesses are always taken in direct relation to the company and in comparison to the competition. In other words, insights that are homemade and influenced by the company itself. Strengths and weaknesses classifications are aimed at the nearer past or present. It answers the question of how the company has been positioned in recent months or how it would currently react. Chances (opportunities) and risks (threats), on the other hand, are future-oriented and are brought to the company from outside.
The SWOT analysis is one of the most popular strategic management tools and can be developed quickly and easily in a team. The general SWOT method is used here as a focus analysis, in that the evaluation is always seen in connection with the influences of Corona. These influencing factors and concrete changes are considered and their effects on the company are described.
The New Normal – Home office and remote work
For many employees and employers, working from home will remain an integral part of the work culture in the future, regardless of what the political regulations will be. So how was it during the lockdown period?
Assign the following factors as either strengths or weaknesses . In writing, you should evaluate each of these points in relation to your situation:
Think about the opportunities that will open up for your company in the future:
But also think about the possible risks:
The New Normal – Corporate Health Management
One’s own health is perceived more consciously as the greatest good. Companies that have already done something for the health of their employees in the past were also perceived as attractive employers. Younger generations will place even more value on healthy living and working.
Health at work
Rate the following aspects to determine whether you are perceived as a strength or weakness in the company:
Here, too, it is important to think about the opportunities that arise for your company:
On the other hand, there may also be specific risks:
The New Normal – degree of digitization
Among the winners of the Corona restrictions were companies that have relied extensively on digitization. Online purchases and services were in high demand. This trend was not new, but it became more and more important to us. The entire value chain must be considered, from the automated purchase of goods to digital asset management and cashless payment systems.
What strengths and weaknesses does your company have in the area of digitization:
Think about the opportunities that digitization opens up for your company:
Also assess the possible risks:
The New Normal – Acting in global markets
With the global corona pandemic, there were also delivery bottlenecks or shortages of goods in some cases. There are many reasons for this, from the dependency of global manufacturers to extreme demand for individual raw materials and goods. This is based on the idea of a globally networked economy. The consequences of this became clear with Corona: a lack of medical products, restrictions in transit traffic, a lack of unskilled workers or rising prices for certain raw materials.
Consider the strengths and weaknesses that emerged against the background of globalization:
Also think of the opportunities that arise from the consequences of the global corona restrictions:
What are the risks when looking back at behavior in the globalized markets:
Conclusion
We have limited ourselves to four major changes that were observed during the lockdown times and that will also concern us in the future. With a simple methodology such as the SWOT analysis, a company can form its own picture and position itself strategically. It is crucial that you focus, like here on Corona and the effects on the economy. This works very simply with the help of a digital consulting platform such as ConWISE. All of the factors listed flow directly into the analysis and thus provide a picture of the new normality in your company. Use this uncomplicated New Normal analysis from ConWISE
The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!
Do you know the 5 most common mistakes in a SWOT analysis?
/by Christian ArentzenSWOT is the abbreviation for Strength, Weakness, Opportunities and Threats. In German: strengths, weaknesses, opportunities and threats. It is one of the best-known and most frequently used management methods. Its strength lies in its simple application for many topics in the company. A simple 4-field matrix represents the grid for the SWOT analysis. Despite this simple application, errors can creep into the application. You should know and avoid these. Only then does the SWOT analysis unfold its huge potential in everyday business life.
The SWOT analysis and its importance
The SWOT analysis was developed in the 1960s at Harvard Business School for use in companies.
Even today, the SWOT analysis is one of the best-known and most frequently used methods in the context of strategic planning. The abbreviation SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
With the help of the SWOT analysis, strengths and weaknesses of a company, a department, of processes or of products and services can be found out. This corresponds to an internal company analysis. The method also compares the opportunities and risks in relation to the environment and the competition ( see also the definition of a SWOT analysis ). At the same time, it covers an external environmental or environment analysis. Both analysis types are mapped in a 2×2 matrix. See also the figure below:
The classic SWOT analysis
Incorrect application of the SWOT analysis
In the end, the success of a management method is measured by concrete and goal-oriented measures. In contrast, the SWOT analysis first of all describes conditions inside and outside the company. The success of a SWOT analysis can only be seen in the consequences and strategies derived from it, or their implementation. See also our article ” Successful specification of a strategy “.
When using the actual SWOT analysis, you often come across the following 5 errors:
In the following, we will go into more detail about these errors and show how they can be prevented.
Lack of comparison with the competition
When analyzing strengths and weaknesses, this should always be done in direct comparison with the competition. A strength or a weakness that also applies to all competitors at the same time can be neglected. The easiest way to proceed is to ask yourself the question: “What are the concrete strengths or weaknesses compared to the 3 main competitors?”. Make sure that not only direct competitors are considered, but also potential new market entry candidates are relevant. For example, an insurance company should not only keep an eye on its direct competitors, but also on platform providers such as Amazon, Alibaba, etc. These have already proven several times that they can expand their market power to related company fields (example: Amazon discovers the insurance business of n-tv, 2021).
Unstructured derivation of consequences
As mentioned, the analysis results of the four SWOT fields only describe a state. For successful management, the derived consequences are now decisive. Avoid the mistake of only looking at the weaknesses one-sidedly or using the opportunities immediately as a strategic guideline. In practice, a structured approach called the TOWS matrix has proven to be advantageous here (see also the TOWS method description ).
The TOWS Matrix is based on a classic SWOT analysis. The results of the company’s strengths and weaknesses and the resulting opportunities and risks are compared in a matrix. Each combination of SWOT fields results in a specific strategic thrust:
From the SWOT analysis to the TOWS matrix
Unilateral focus during analysis
Distortions in the analysis often occur, especially when a well-trained team or department gets together to carry out a SWOT analysis. In doing so, individual fields of the SWOT matrix are focused one-sidedly by basking in the strengths or, in the case of weaknesses, by targeting those that come from others. Again and again one finds that a previously formulated hypothesis should be supported by the results of the analysis. The view of strengths, weaknesses, opportunities and risks is therefore perceived to be very limited.
This distortion of results can also creep in if superiors with strong opinions or patriarchal managers are actively involved in the elaboration. The participants then often orientate themselves on their statements in order to avoid any contradictions or resentment.
How can this be prevented?
The group of participants should be as heterogeneous as possible. So they come from different areas and/or belong to different hierarchies. Women and men should also deliberately participate in the analysis together, since their perspectives on things can be different. It often also helps when outsiders such as consultants or suppliers who are able to express independent opinions are involved. Even an independent and anonymous implementation of the SWOT analysis, as made possible by the digital consulting platform from ConWISE, leads to open and unbiased results.
Lack of topic and goal orientation
“Let’s do a quick SWOT analysis!” Managers can be heard shouting. And the flipchart or whiteboard is divided into a 4-field matrix and off you go. Then a confused collection of points takes place. Although a lot of content comes together, the consequences derived from it are not satisfactory in the long term. The problem with this is that the measures follow no recognizable direction. This can be prevented by narrowing down the subject area for the SWOT analysis at the beginning and writing it down. The topic must always be visible or visible to every participant.
The topic can include a specific product, service or process. Make sure that the description is as specific as possible. Example: instead of “SWOT analysis in the service area”, it should read “SWOT analysis for the introduction of a new service in the after-sales area”.
The specific naming of the topic or goal also helps you to carry out the environment analysis, i.e. to record the opportunities and risks. This is because the influencing factors to be considered can be almost infinite. There is a multitude of political, economic, social and technological developments. The solution is simple: focus on the influences that are gaining in importance because of the named topic/goal.
Incorrect order of application
We recommend that you start with the internal analysis – the company – and thus go into the strengths and weaknesses first. These can usually be formulated and described very specifically. You get fast results in the analysis and are then motivated to dedicate yourself to the external analysis – the environment. It also helps you to limit the external influencing factors if necessary, in that the strengths and weaknesses that have already been recorded serve as a guide.
In the area of chances (opportunities), these are often described as concrete options for action. However, this derivation of strategic options should only take place in the next step of the SWOT analysis. During the analysis, the observations of the environment are in the foreground. Example: “Participation in a startup to develop a new AI application” (specific option for action) versus “Many new startups in the field of AI” (general description of the market environment with potential opportunities).
In a broader sense, an incorrect order of application can also apply to the timing of the SWOT analysis. This should always serve as a starting point for an actual strategy development and not vice versa. Otherwise, the analysis would take on an alibi role in order to legitimize a predetermined strategic direction. This also applies to activities that have already been carried out and whose justification is only provided by a subsequent SWOT analysis.
Conclusion
Although the SWOT analysis has been used in almost every company worldwide for decades, errors can still creep in today. At first glance, this is often not even recognizable, because the SWOT analysis usually brings up a large number of points. In terms of quantity, the management and the participants can usually be very satisfied. Mistakes in the application of methods are noticeable: when it comes to the qualitative implementation of the findings. The results fall short of expectations. This becomes particularly clear when the results are re-evaluated after some time has passed.
If those responsible and initiators of the analysis know the errors shown here and avoid them accordingly, the SWOT analysis is and remains one of the most effective tools in strategic planning. A simple way of preventing the errors listed from creeping in in the first place is to use the respective SWOT and TOWS frameworks on ConWISE’s digital consulting platform.
The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!
Specification of a strategy for successful implementation
/by Marco ZanderIn the second part of our series on strategy creation, we dealt with how you can start concretizing your strategy based on the vision and mission as well as the environment and self-analysis. Building on that, let’s take a closer look at how you can flesh out the strategy .
From actual to target
The strategy aims to transform the company from the current state to a future state . If you have already followed the first two posts in our series, you have already defined it with the help of vision and mission.
If you now look at the current situation of your company, you will find that adjustments are necessary in various areas in order to achieve the set goal. The previously performed environment and SWOT analyzes will also help you. With their help, you can assess where adjustments are necessary.
The following section is intended to illustrate this using an example:
Example – A fashion manufacturer
As a fashion manufacturer with a business model that has so far been heavily focused on retail, you want to play a leading role in online retail in the future. In accordance with your vision, you want to become the most-worn brand in Europe with sustainably produced fashion.
Your company has several well-known brands in its portfolio and is well positioned in terms of production and logistics. This has already put you at the forefront of market shares in several countries.
However, you have weaknesses when it comes to online presence. Furthermore, the increasing change to online business represents a high risk for your current business.
As you can see from the environment analysis, your competitors in online trading have increased their sales considerably in recent years. In terms of brand awareness, however, they lag far behind your company. However, your brands are losing ground in customer perception compared to those of the competition.
The online strategy is to be specified
Strategic fields of action in the case of the fashion manufacturer
The factors mentioned above already result in a number of fields of action that need to be tackled in order to achieve the vision.
In marketing , the existing brands need to be modernized. This can also mean that individual brands are removed from the portfolio in order to focus on more promising ones.
In addition, the marketing channels must be coordinated with increasing online business. This also requires that the IT systems are provided to manage the goods and marketing materials digitally and to play them out in different channels. This can be done, for example, using a digital asset management system (DAM).
At the same time, new skills are required from employees. The HR department will provide training courses to ensure that marketing staff become more familiar with the needs of online business. New hires are made in IT for the provision and operation of new systems.
Strategic Goals
In the next step, you define strategic goals for the specified fields of action. These goals are intended to determine what is to be achieved specifically in the fields of action for the strategy’s observation period (3-5 years).
For the fashion manufacturer example, these could be:
Be sure to define the goals SMART :
In this context, the OKR method should also be mentioned, which has gained enormous popularity in recent years.
With their help, the goals (objectives) are operationalized via concrete results to be achieved (key results). Implementation is then monitored and controlled by regular reviews of target achievement. This review can take place, for example, once a quarter. Visit our Knowledge Base for more information on this and other methods.
road map
After you have defined the strategic goals, you define the activities that are necessary to get from the current starting point to the desired target state. This often results in dependencies in terms of content or time. In addition, you will probably plan with limited resources that need to be coordinated.
Roadmap for the concretization of the strategy
You then arrange the activities according to their priorities and the dependencies mentioned. You then map these as shown above for each field of action on a roadmap diagram . This then defines your company’s path to achieving your goals.
The roadmap then serves as the basis for project portfolio management . In it, you define the relevant initiatives, provide them with budgets and monitor their implementation. This creates the transition to a successful and sustainable implementation of your strategy.
Conclusion
The concretization of the strategy is a crucial step in the creation of the strategy . If you don’t do this, strategies are often too vague and not applicable in everyday work. In many cases, employees then perceive the strategy as “too aloof”. In many cases, this is followed by the fact that they completely ignore the strategy (according to the motto “again a new strategy, but nothing changes anyway”).
Hence our advice: Define your strategy based on a motivating vision and mission , strategic goals and concrete initiatives for the coming months and years. Then you have an excellent tool to lead your company successfully into the future. You can create this basis with the help of the ConWISE platform. Contact us.
From mission and vision to strategy
/by Marco ZanderIn the previous blog post we presented the definition of vision, mission and values in the context of strategy creation. This article is now about how we proceed to set up a strategy – i.e. the plan for the next few years.
The goal is the way
Our target state is defined by the vision and the mission. We have a clear idea of where we want to go. The task now is to define the path from the current point of view to this goal. And as so often, there can be several ways.
For example, imagine you want to ride your bike from one place to the next. There is a short trail but it is a dirt road over a high mountain. Or there is a long way that is well developed with a bike path and does not contain any steep parts, but is considerably longer. Which one do you choose?
Your choice could depend on several parameters:
Several paths lead to the goal
You see, with the same starting point and the same goal, there are different ways to get to the goal. And the choice of which path you choose depends on environmental factors on the one hand (gravel path or developed bike path, mountain or flat route) and on the other hand on yourself (your level of fitness).
It is similar in companies when they formulate a strategy. In this case, too, environmental factors are included (e.g. political environment, competitors and customer interests) and one’s own performance (available resources, skills, strengths and weaknesses) is considered.
In what environment do we want to achieve our goal?
There are a variety of methods for analyzing a company’s environment. For example, there is the PESTLE method (environmental analysis), whose name is derived from the first letters of the areas to be considered: Political, Economic, Social, Technological, Legal, Environmental . It is immediately obvious that these areas have a significant impact on a company’s scope for action.
In the last 10 years in particular, technological developments have opened up completely new market opportunities, but at the same time have made their application in many areas absolutely necessary in order to be able to continue to exist on the market. It is becoming apparent that in the next 10 years, in addition to the continued rapid development of technologies, environmental protection will also have a significant impact on the actions of companies.
Analysis of the environment
Another commonly used approach analyzes the following areas:
After analyzing these areas, you will have an overview of how your environment is likely to develop over the next few years. With the help of this information, in the next step you can analyze what influence these factors have on your company and what opportunities and options for action may result from them.
SWOT analysis
When you look at your company, it is helpful to identify opportunities and threats in addition to the classic analysis of strengths and weaknesses. The SWOT analysis does exactly that. The advantage of this is that, in addition to looking at the company itself, its environment is also included in the evaluation.
It is important with this procedure that you strictly separate between
Examine the above points in the context of the previously defined mission, vision and values. Areas that are not relevant to the implementation of your mission are hardly relevant in a weakness analysis. Likewise, strengths will be of no use to you if they do not contribute to the achievement of the vision.
Be critical when analyzing and try to examine hyped topics in detail to see whether they really bring the promised advantages for your application. For example, many of the promises about blockchain that have been loudly communicated in recent years have turned out to be largely exaggerated up to now. In the field of artificial intelligence, on the other hand, there are many useful areas of application. Therefore, this topic should be analyzed more closely in most companies for its possible benefits.
Identify strategic fields of action
After you have analyzed the environment and your company within this environment, it is time to draw first conclusions. Based on the results of these analyses, you can now define strategic fields of action in which you want to become active. Fields of action arise, for example, if
The strategic fields of action specify the topics that need to be worked on in the coming months and years in order to implement your mission.
Next Steps
By defining the strategic fields of action, you have taken another important step in defining your strategy. Some companies remain too vague here and subsequently have difficulties operationalizing their strategy. Therefore, in the next part of our blog series on strategy creation, you will learn how to specify the necessary steps to implement the strategy and set up a plan for the next few years.
If you want to start creating your strategy now, the ConWISE platform can support you with the individual steps. If you want to know how this works, just contact us . We would be happy to arrange a personal demo appointment with you.
Successfully develop an AI strategy
/by Christian ArentzenDo companies actually need an AI strategy? It is probably less a question of “if” and more of the question of when it is too late to deal with AI. Developments in this area are rapid. In every company there are activities that can be automated and are based on an “if – then” logic. The fields of application of artificial intelligence range from data analysis and chatbots to new services, products and business models.
So, an AI strategy is essential to ensure your business is using AI strategically – in a way that ties directly to business goals. Developing an AI strategy means identifying how your company can best use AI. It is irrelevant whether the result represents an independent AI strategy or whether the findings are incorporated into the corporate strategy. It is important that companies think carefully about the use of artificial intelligence in their company.
Below you will learn what elements an AI strategy includes and how best to proceed to develop an AI strategy for your company.
The development of an AI strategy in the company
Below you will learn what elements an AI strategy includes and how best to proceed to develop an AI strategy for your company.
Development of an AI strategy with ConWISE
Step 1: Set AI goals and define use cases
As a first step, you should think about what goals you want to pursue with the use of artificial intelligence in the company. And what benefits the company should derive from AI. The result is an AI prioritization and the definition of concrete use cases for the company.
Possible AI goals could include:
The above goals are often implemented in the context of the following AI application fields:
Step 2: Prioritize use cases
Experience has shown that a large number of possible applications emerge from the first step above. These now need to be prioritized. You should concentrate on the top 3 applications. In addition, you can already identify so-called quick-win initiatives in this step. These are short-term AI projects that can help you demonstrate the value of AI in a relatively quick, easy, and inexpensive way.
Step 3: Identify requirements
Next, take on the core AI requirements. AI use cases usually have some common themes that need to be considered or that must be met as a prerequisite. Your task is to identify the challenges in order to close any gaps in the company.
The following topics are to be considered in particular when creating an AI strategy:
The following questions must be answered for each topic:
Data:
Technology and infrastructure:
AI know-how:
Change Management:
Step 4: Close gaps
After the requirements are clearly outlined and you have identified the gaps, you can start thinking about possible activities. What does it take to correct the respective grievances? They proceed in the same way as the main topics of the AI listed above. As a result, you receive a list of initiatives that you categorize in the next step.
Step 5: Create an AI roadmap
Not all initiatives are created equal. Also, some projects can be implemented quickly, while others take longer. Finally, there may also be dependencies between initiatives that you need to be aware of. A roadmap will help you with this, in which you can arrange the individual projects in terms of time. From short-term to medium and long-term AI projects.
Conclusion when creating an AI strategy
The way shown here to create an AI strategy is certainly only the first step in strategically dealing with AI. It at least provides the framework for how you want to use AI and what conditions are to be created where. In particular, developments in the field of artificial intelligence are progressing so quickly that the results should be checked regularly and adjusted if necessary. In this environment in particular, an agile approach is advisable.
The digital consulting platform from ConWISE is ideal for drafting initial concepts for the AI strategy together in the company. You will work out the results step-by-step along the development path shown above. New AI applications can also be quickly taken into account and incorporated into the AI strategy.
The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!