Most of us have participated in a planning session using SWOT analysis (strengths, weaknesses, opportunities, threats). Often, participants offer suggestions that however well-intentioned, are just “top of mind” or limited to their own area of responsibility or expertise. This is especially true for weaknesses and threats which often come from outside the business. These are important but rarely comprehensive. A deeper dive into risk needs to be a formal part of every company’s planning process.
Let me introduce you to CARVER, a system created in World War II to determine where bomber pilots should drop their munitions for maximum effect and minimal risk to the crews. Recently, this tool has been rediscovered as a business tool to identify not only your own weaknesses but that of competitors. CARVER is an acronym representing six fundamental aspects of risk management and assures a deeper dive into the things that can go wrong than merely using SWOT. It can be used to assess both qualitative and quantitative data and can be quickly understood by anyone on your management team. This short article from HBR provides a great overview and guide to using CARVER to identify hidden risk.
Worth your time. Are you sitting on a pile of dynamite and don’t know it?