The Taoist farmer and SWOT analysis

Do you know the story of the Taoist farmer and his son?

There once was a Taoist farmer. One day the Taoist farmer’s only horse broke out of the corral and ran away. The farmer’s neighbors, all hearing of the horse running away, came to the Taoist farmer’s house to view the corral. As they stood there, the neighbors all said, “Oh what bad luck!” The Taoist farmer replied, “Maybe.”

About a week later, the horse returned, bringing with it a whole herd of wild horses, which the Taoist farmer and his son quickly corralled. The neighbors, hearing of the corralling of the horses, came to see for themselves. As they stood there looking at the corral filled with horses, the neighbors said, “Oh what good luck!” The Taoist farmer replied, “Maybe.”

A couple of weeks later, the Taoist farmer’s son’s leg was badly broken when he was thrown from a horse he was trying to break. A few days later the broken leg became infected and the son became delirious with fever. The neighbors, all hearing of the incident, came to see the son. As they stood there, the neighbors said, “Oh what bad luck!” The Taoist farmer replied, “Maybe.”

At that same time in China, there was a war going on between two rival warlords. The warlord of the Taoist farmer’s village was involved in this war. In need of more soldiers, he sent one of his captains to the village to conscript young men to fight in the war. When the captain came to take the Taoist farmer’s son he found a young man with a broken leg who was delirious with fever. Knowing there was no way the son could fight, the captain left him there. A few days later, the son’s fever broke. The neighbors, hearing of the son’s not being taken to fight in the war and of his return to good health, all came to see him. As they stood there, each one said, “Oh what good luck!” The Taoist farmer replied, “Maybe.”

This morning I was in a conversation about SWOT analysis and strategic planning. I told this story as an example of why SWOT analysis has extremely limited application to planning.  Contexts change so fast that what was a threat one moment is an opoortunity the next.  What seems to be a weakness can become a strength.

I think SWOT analysis might apply in situations of extreme complexity, right close to a crisis situation.  You need to do a quick assessment of where you are in order to act.  Beyond that though it becomes dangerous to rely on an assessment that was accurate in one context but is useless when the context changes.

I don’t know why or how this became a key part of strategic planning, especially in non-profits, but it’s probably time to retire it in favour of better sense making and strategy.