Organisational Review Tools

a) SWOT analysis

A SWOT is a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in the current and future situation of an organisation.
It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective.

Strengths and Weaknesses
Strengths and weaknesses are the factors of the firm’s internal environment. When looking for strengths, ask what you do better than your competitors, or what you have that is more valuable than they have. In the case of weaknesses, ask what you could improve to at least catch up with your competitors.

Where to look for them?
• Resources: buildings, equipment, knowledge, brand equity, intellectual property, etc.
• Core competencies
• Capabilities
• Functional areas: management, operations, marketing, finances, human resources and R&D
• Organisational culture
• Value chain activities (adding value to your product)

Opportunities and threats
Opportunities and threats are the external uncontrollable factors that usually appear or arise due to the changes in the macro environment, industry or competitors’ actions. Opportunities represent the external situations that bring a competitive advantage if seized upon. Threats may damage your organisation so it is best to avoid or defend against them.

Where to look for them?
• What could you improve?
• What should you avoid?
• What are people in your market likely to see as weaknesses?
• What factors lose your sales?
• Changes in technology and markets on both a broad and narrow scale.
• Changes in government policy related to your field.
• Changes in social patterns, population profiles, lifestyle changes, etc.

b) PEST(EL) analysis

PEST or PESTEL or STEEPLE analysis is a simple and effective tool used in situation analysis to identify the key external (macro environment level) forces that might affect an organisation. These forces can create both opportunities and threats for an organisation. The categories can include ‘ethical’, ‘legal’ and ‘environmental’.
The outcome of PEST is an understanding of the overall picture surrounding the company.

c) Competitor analysis

In order to better understand the external environment and the competition in a particular sector, organisations often undertake a competitor analysis.

The competitor analysis process identifies an organisation’s key competitors and compares them using the relevant sector’s critical success factors. The analysis also reveals an organisation’s relative strengths and weaknesses against its competitors.

When you have completed your competitor analysis, you will be able to come up with a strategy to make the most of opportunities in your industry – and to deal with potential threats before they arise.

Sources of information about your competitors
Online searches should provide information that is published and available for general consumption.
• Annual reports
• Company profiles
• Product brochures
• Press releases
• Articles published in the media
• Presentations.

Then there is data that will require some investigation and research, such as pricing, marketing campaigns, promotions and so on.

Other good sources of information about your competition include trade shows, conferences and seminars.

Completing the template
Usually such templates are filled out with summarised comments. Sometimes they are scored. We recommend comments, as that is a more useful record, but additional scoring can help highlight critical disparities.

d) Investment readiness

Investment readiness or ‘income readiness’ requires detailed consideration of the abilities, structures, culture, tools, competencies and governance of an organisation. It also assumes that the organisation knows what it is trying to achieve and that it has, or will have, the necessary capability to get there and to deliver on its promises.

e) The balanced scorecard

The balanced scorecard is a tool to measure your organisation’s performance, or implementation of your strategy. It focuses on a limited number of key indicators. Each is monitored against your past figures and your targets. It is ‘balanced’ in that it reflects all key areas of your activity, and internal and external objectives. It is recommended that organisations develop their own scorecard and indicators so that they reflect the organisation’s specific strategy and unique properties.

To embark on the balanced scorecard path an organisation first must know (and understand) the following:
• The organisations vision
• The organisations strategic plan/mission
• The financial status of the organisation
• How the organisation is currently structured and operating
• The level of expertise of their employees
• Customer satisfaction level

A balanced scorecard approach generally has four perspectives:
1. Financial
2. Internal business processes
3. Learning & growth (human focus, or learning and development)
4. Customer

Each of the four perspectives is inter-dependent. Improvement in just one area is not necessarily a recipe for success in the other areas. However, in the social change sector it is quite common to add a fifth dimension; impact.
Booktrust developed the enhanced model you find above.

f) Organisational analysis spider diagram

The spider chart is a tool to help assess, in a visual format, an organisation’s strengths and weaknesses. The axes can be determined to reflect all aspects of an organisation, or alternatively those felt to be priorities for financial sustainability, or any specific aspect. You might want your chart to match closely your investment readiness assessment, or your balanced scorecard.

For funding sustainability, the axes might include:
• Organisational fundraising ethos and strategy
• Income diversity
• Management of finances, monitoring and reporting
• Risk awareness, assessment and plans
• Impact, and impact assessment processes and reporting
• Profile, external communications, supporters
• Partnerships: delivery, funders

The axes can be numbered from the centre to the edge, with the centre reflecting weak, the edge strong. These could be simple limited classifications such as: weak, adequate, good, strong. Or they could be more varied, with up to 10 or more stages. Some models have specific assessment criteria for each number and axis. But an exercise based on perceived strengths and weaknesses is also valuable. Individuals might create their own diagram, and then compare with others. A final agreed diagram can then be produced.

Plot where you perceive the organisation is on each axis, and then join the dots. The ideal profile is an equilateral shape. Disparities from the equilateral reflect strengths and weaknesses.

The chart above is an example taken from an organisational assessment exercise, and one showing how the exercise can be used to measure against targets.

g) Ansoff matrix

The Ansoff growth matrix is another marketing planning tool that helps a business determine its product and market growth strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth strategies which set the direction for the business strategy.

Using the Ansoff matrix
Map your current and planned products or services against this matrix, to reflect your current strategy and new plans. You may want to consider the business development advantages of evolving expertise in all four sectors.

Analyse whether your existing products and services are marketed to your existing audiences (or audiences already demanding such products and services) or whether you are moving into new markets. Perhaps map also your competitors in that market. Alternatively, from your analysis of your audience needs, you may be developing new products for that audience. Finally, diversification involves developing new products for markets new to you (and possibly markets least engaged with such offers). Usually the risks increase with the movement into new products or markets, and further still when both are new.

Your strategy might include repackaging or enhancing existing products to move them into the new product sector, or developing new partnerships to take products into new markets. This analysis is likely to be closely aligned with your competitor analysis.

h) The Boston Box matrix

The Boston Box is a model used for analysing a company's potential by plotting market share against growth rate. The Boston Box was conceived by the Boston Consulting Group in the 1970s to help in the process of determining which businesses a company should invest in and which it should divest itself of. A business with a high market share and high growth rate is a star, and one with a low market share and low growth rate is a dog. A high market share with low growth rate is characteristic of a cash cow, which could yield significant but short-term gain, and a low market share coupled with high growth rate produces a question mark company, which offers a doubtful return on investment. To be useful, this model requires accurate assessment of a business's strengths and weaknesses (as analysed through the SWOT analysis).

Using the Boston Box to gauge diversification and sustainability
The Boston Box can also be used (alongside your Ansoff matrix) to plot your various products, to show how diverse your portfolio is. Growth in a product eventually slows, as does usually market share. The common cycle is from question marks, through stars, into cash cows and finally a dog.
A diversified portfolio has stars that are key for the future, cash cows that supply current funds to support future growth, and question marks which need those funds to be developed into stars.

One option, in plotting your products against the two axes, is to indicate the financial value to you of that product by the size of the circle marking its position.

i) The change curve

The change curve model describes the four stages most people go through as they adjust to change.

When a change is first introduced, people's initial reaction may be shock or denial, as they react to the challenge to the status quo. This is stage 1 of the change curve.

Once the reality of the change starts to hit, people tend to react negatively and move to stage 2 of the change curve: They may fear the impact; feel angry; and actively resist or protest against the changes.

Some will wrongly fear the negative consequences of change. Others will correctly identify real threats to their position.

As a result, the organisation experiences disruption which, if not carefully managed, can quickly spiral into chaos.
For as long as people resist the change and remain at stage 2 of the change curve, the change will be unsuccessful, at least for the people who react in this way. This is a stressful and unpleasant stage. For everyone, it is much healthier to move to stage 3 of the change curve, where pessimism and resistance give way to some optimism and acceptance.

The tool is useful for considering where you are as an organisation, or as an individual, in the change process that takes place as a business diversifies and new income sources are sought. It prepares you for that process. It reminds you that the process is not without risks. It emphasises the value of risk management, change management, and also the Human Resources analysis processes, tools and skills required for successful organisational change.