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Mind the Gap: What Gap Analysis Is, Why You Need It and How to Do It

Posted by StellaPop on Sep 3, 2019 8:47:46 AM
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Gap-Analysis

Everyone has a fantasy of who they want to be. And that often differs from who they are in reality. Companies aren't any different. We all have a vision of where we want our company to be. But to get there, we must know where we are. This is the purpose of gap analysis.

Gap analysis reveals the difference between your company’s goals and your present reality. It’s a valuable tool regardless of whether your company is currently succeeding, failing or treading water.

Performance vs. Potential

There's a difference between your company’s potential and its actual performance. Your potential is what you can accomplish in the ideal world, your performance is what you’re accomplishing in the real world.

Even if you’re running a successful Fortune 500 company, there’s always greater potential for your organization.

Where Do You Want to Be?

To realize your company’s highest potential, you have to determine how you want to differ from where you are today. Take inventory of where your company stands right now. Then, determine what you want your company to look like in the future, whether that’s one year or ten years down the line.

You can also look backward. When you’ve completed a project, look at where you were when the project began. Next, look at your results. Discovering the difference between these two pictures is the essence of gap analysis.

Now, Mind the Gap…

The way you get your company from point A to point B is simple. You can either look forward or backward. Both views will help you determine how to meet your goals. And they’ll also help you discover ways to improve existing processes.

First, you need a realistic picture of where your company stands at this moment. You can do this by taking a  look at the processes you currently have in place. Or you can look at the processes in place when the project you’re analyzing began.

Next, determine precisely what you want the company to look like in the future. When you’re looking backward, you need to know how you wanted things to appear when the project was completed. Reality doesn’t matter. This is an intellectual exercise.

Obviously, there will be a “gap” between these pictures of the ideal and the real. Discovering this gap will help you find tangible solutions to reach your goals.

The Framework

These exercises provide a framework for understanding your current business situation. You can’t improve your business without knowing where you’re actually standing. Realizing this framework gives you a chance to plan for the future.

Gap analysis helps you discover opportunities for improvement. And of course, every business needs to improve. Improvement is growth. And I’ve heard it said before if a business isn’t growing, it’s dying.

The Strategy

The real goal of gap analysis, however, is to build an actionable strategy going forward. This strategy should get your company from its current situation to the desired future.

There are many methods for performing gap analysis. Here’s a shortlist of just a few: SWOT, Fishbone, McKinsey 7S, and Burke-Litwin Causal Model.

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See Also:

Year-End Biz Quiz: Goals

Business Minded: Organizational Strategic Planning in 8 Key Steps

Time to go Big CEOs – How To Think Big Picture

Topics: Management Consulting, CEO Series

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