What is a Gap Analysis?
In our bid to develop a sound business strategy, we must carry out robust strategic analysis, assessment and research. This can sound daunting initially! Happily, however, there are valuable tools that exist to support each stage. Today we’ll look at Gap Analysis.
Reviewing what’s in place
In nearly all cases, an organisation working to create a strategy will already have something in place. This could be a recent or legacy strategy of some sorts. (The only exception here tends to be for start-ups.)
For larger and more established companies, in particular, a great deal of work will have been undertaken in relation to this strategy. Significant amounts of time, effort and resource will have been invested into it – from strategy assessment and creation through to communication, implementation and evaluation.
Of course, when all of this work has already been done, we never want to simply write it off and start again! This is even true if hindsight shows that the strategy was incorrect, or perhaps insufficient.
Building on what’s in place
A more valuable approach is to instead validate the existing strategy and to see where it has gaps. This is often a typical problem with a strategy. As a business leader, you may intuitively know the organisation’s best course of travel. However, without knowledge of the strategic process, it is easy to miss out the detailed steps needed to make this happen. This is where the Gap Analysis comes in.
The value of Gap Analysis
The clue is very much in the name of this handy strategic tool. Gap Analysis involves taking a systematic review of the strategic material already in place to flag up any gaps.
The three Gap Analysis Steps
1. Work out where you are currently
What is your current position? Here, you should evaluate your strategic activities to get the whole picture. The analysis could include a mix of quantitative data (sales figures for example) and qualitative data such as methodologies and customer feedback.
2. Define the ideal future position
Get idealistic now, and work out exactly where you would like to be. Once clarified, it becomes easier to see how and why you are falling short of your strategic end-point. Remember, it may simply be because the landscape has changed. But whatever the reason, you must identify the steps now needed to get you back on track.
3. Bridge the gap
This becomes your roadmap. Identify the gaps, and then define the objectives that will transition you to the desired end goal. Yes, it can be harder than it sounds! A strategy workshop is often a good way to approach this task, with an external facilitator to provide theoretical rigour, tools and the objective guidance needed.
The value of frameworks
To maximise your value from the tool, you must gather a list of every deliverable that must happen to transform the strategy into a successful reality.
Be careful here, as you don’t want to end up with a To-Do list! Remember too, ‘you don’t know, what you don’t know’. This is why we recommend using a framework such as the Balanced Scorecard. This strategic process is used by thousands of organisations across the globe and it provides a proven and established list of criteria to verify and address. Alternatively, you can use an industry benchmark as a sense check.
Your ongoing reference
The gap analysis you produce will provide:
1. An excellent reference point that you’ll use throughout your strategic development process.
2. A check that every necessary strategic activity has been captured.
3. The detail to ascertain which of the next-step strategic analysis tools you might subsequently use.
Remember, the gap analysis itself won’t ensure strategic success. You’ll still need to deliver each activity on the list! But it will give you and your management team a framework to refer to, to ensure nothing gets missed out.
Looking for a free Gap Analysis template?
We’ve made it easy for you. You can find a free template developed by the strategy experts at Intrafocus: Balanced Scorecard
Keen to know more about the strategic analysis process and the various other tools you might then employ? Get the insights you need in our Balanced Scorecard.
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Move ahead with a strategy workshop. Our strategy workshops give you the concepts, tools and insights that you need to make your organisational strategy a success. We have hosted many successful strategy workshops for organisations of all sizes and across all industries. Contact us to find more.