The traditional notion of SWOT analysis being deployed as an adequate tool to identify Strengths, Weaknesses, Opportunities & Threats in a business is fast changing. The idea behind a SWOT analysis is to provide a 360 degree view of risks and opportunities but more often than not, it fails in doing so because of its superficial application and its failure to include interconnected system risks.

If you deploy inefficient analysis techniques and are not aptly prepared, then you can be easily taken by surprise due to a recession, a disruptive technology or a game-changing way of thinking utilized by a competitor.

Most of the future risk-mitigation efforts revolve around the domino effect of a prior or most recent crisis. And unfortunately, the triggers and threats that led to the crisis are ignored.

What are the key shortcomings of SWOT Analysis:

• Underestimating the contribution of human factors in creating or destroying an organization
• SWOT analysis doesn’t incorporate War Gaming, Stress Testing and disruptive failure mode analysis testing of leadership mindset, strategy, work culture, processes, and products & services
• Not basing it on proven innovation-on-demand techniques
• Over-dependence and relying on cyber security and patents without conducting stress testing with advanced cyber-circumvention and patent busting techniques
• Avoiding uncomfortable discussion topics not identifying with focused and anonymously solicited inputs from employees
• Ignoring “Trojan Horse” risks that are secretly lurking in the hearts and minds of employees or piggy-backing purchased technology, software, products or services
• Not applying Gamification techniques to address threats in an effective manner
• Failing to include effective strategies to attract and retain key human talent
• More often than not, SWOT analysis fails to identify low profile threats with potential cascading effect
• Ignores external perspectives to challenge group-think assumptions of perceived safety and robustness against future disruptions

The age-old concept of KISS (Keep It Simple Stupid) has lost its ability to identify and protect against complex future cascading risks. In today’s ever-changing world casual optimists get punished and those who hope for the best but seriously attempt to plan for worst case scenarios are generously awarded. We have now entered a new era where we need new ways to describe and understand the complex world we have created that has outgrown the simple tools we like to describe it with.

Adapted from David Patrishkoff‘s blog .