CATWOE, one of the best analytical tools for business stands for customers, actors, transformation process, worldview, owners and environmental constraints.
If you ever heard of the term CATWOE, no, you don't have to worry about it being a depression that cats go through or a time when cats are upset. It's something completely different.
CATWOE is an acronym or a series of letters that make up a word. It's used as a business term and if you look at the six different letters, they stand for: customers, actors, transformation process, worldview, owners and environmental constraints.
When you think about CATWOE, you're going to think about questions that you may ask yourself in business to help you to look before you leap into a particular direction. The goal with CATWOE is to help you think about the decisions you want to make ahead of time. For businesses, if they make the wrong decision, this can be very dangerous, cost them a lot of money and they can lose a lot of customers.
Let’s look at the breakdown to help you see the questions you need to ask in business before you leap into a decision:
The C in CATWOE stands for customers
This is a question you want to ask in terms of how your decision will affect your customers. In business when you make decisions, you want to always question whether or not the actions will affect your customers in any particular way. For example, Walmart which was known for its low prices, started raising prices over a period of time. Guess what happened? The public did not like this. It was met with opposition and they had to change how they priced their items again. Eventually, they had to go back to lower prices. Another example is Netflix which tried to raise its prices, but there was so much public outcry and rage over it, that Netflix sent a public apology and changed their prices. Because your business is focusing on people, processes and the environment, you want to make sure you always consider these in every transaction and every type of business analysis you do.
The A in CATWOE is for Actors
That means you want to ask who's involved in this particular situation. Actors are the key people that will be involved and who will be affected by the impact of the decisions that your company makes. You may want to look at people on your team and ask who you can utilize for various projects. This can help you to better assess who to put in charge of what area. When Facebook started to expand, Mark Zuckerberg, their CEO, knew that he needed to hire the right people who would help to implement (make) changes. He picked out strong leadership skills in people like Sheryl Sandberg, because she's a motivational speaker and successful author and writer.
The T in CATWOE stands for Transformation Process
Whenever you make a decision as it relates to your business, you have to ask what the systems that are going to be affected are. Also ask what processes will be affected by it. Every decision that you make is going to affect another area of your business. When Coke decided to come out with Clear Coke, they may have thought that it was a good idea, but the public did not like the idea of a clear soda and changes to a favorite brand.
The W stands for world view
You have to think about the global picture so you want to ask what is the big picture and who are we affecting? What particular issue is going to take place? What is the wider impact that this is going to have on people? When Shell Oil has an oil spill for example, they can't just let the incident go. They have to clean up the oil spill and make a public outcry. That means they have to ensure that all wet lands are cleaned up and all animals are cleaned of excess oil in the affected areas. They want the public to know they will take action. Because their oil spills affect all wildlife and surrounding regions, they have to act fast because it affects their business. This also involves a lot of brainstorming and different types of problem solving skills that you and your staff are going to have to work on. Because you want to ask yourself these different questions from different perspectives, this can help you to figure out whether or not you should make different decisions and why.
The O in CATWOE stands for Ownership
When you think about owner this is about a particular party and ownership or responsibility. You want to ask who will be responsible for the situation you're investigating. You also want to know who's going to play the role in finding the solution. As you look at your staff, key people come into play and you can utilize them to help in decision-making.
The E in CATWOE stands for Environmental Constraints
You have to ask yourself with any decision that your business makes who will be affected by it as it relates to the environment. You want to know who will be affected by limitations or constraints, and any impact that the answer may have as it relates to how well the project will succeed. When Walmart started setting up stores around the globe, they set up the stores in areas of Mexico where there were small mom and pop shops that were set up. The small bodegas and stores could not keep up with Walmart’s low prices and they eventually had to close. While this was great for Walmart because it meant that they had all of the business for those areas, it also had a bad impact on the neighborhoods. They were putting people out of work and this was met with a lot of opposition. People began complaining about Walmart and their strategies to try to get other people out of business.
Ultimately, you want to ensure that any problems that your business has, that you brainstorm ahead of time. Try to think of the various types of solutions that you can come up with and try to factor in each outcome. Every problem that exists will have a solution, but you have to determine whether or not the outcome will be right for your business. A lot of businesses fail because they target answers that will help the business but they don't think about the environment, their employees, or the people in the areas where they work. Make sure to do your homework and use these analytical tools for business, or that cat might be crying!
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