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What is Gap Analysis? – In this series, we have been looking closely at strategic management and some of the tools that exist to help managers in their strategic planning and implementation.

Today, we’ll turn our attention to Gap analysis. As with the other tools we have reviewed – including SWOT analysis – Gap is not a strategic method itself, but it is a valuable tool that supports the overall strategic planning process (SPP)

What is Gap Analysis?

Most companies begin their strategic process with some kind of strategy in place – whether it has been formally defined and process-led using a model such as the Balanced Scorecard, or informally created and adhered to using local processes. The only notable exception tends to be with startups, which may have sought to get off the ground at speed to launch a time-sensitive market-offer, and who then need to craft their longer-term strategy post-launch.

Regardless of which methods a company has used to develop its strategy in the past, the chances are that it will have dedicated large amounts of time, money and human resources to it – to come up with the strategy, to share it across the business, and then to try to deliver it.

With this in mind, we never want to throw away all of that hard work and investment! However, it is important to review any existing strategy for validity and completeness. Nothing is more frustrating for a company than to progress a strategy that later turns out to be incomplete, or simply incorrect.

A Gap analysis exists as a tool to help avoid this situation. It works by analysing the existing strategic material that it exists and systematically interrogating it to find any gaps, in order to address them. By ensuring that the business is following a full strategic process – without omissions – it is far more likely that the resulting strategy will be a good one.

How do we create a Gap analysis?

The good news is that the tool’s structure is actually relatively simple. The objective is to create a list of the company’s strategic components and to assess each of them for completeness.

However, it’s important to remember that there will be things that are either unknown at this stage, or which have been forgotten because we don’t always know, what we don’t know! So for this reason, it’s helpful to use some kind of template or guide, in order to make sure important things don’t get left out.

Choose your Gap analysis list approach

There are three ready approaches to follow here:

1. Create your list and then benchmark it to an established one within a similar industry
2. Follow an established and proven list, such as the one offered as part of the Balanced Scorecard, or a similar recognised methodology.
3. Use the Intrafocus free template, which has been developed by strategic planning specialists with decades of experience! You can find it here: Strategic Planning Checklist

However you choose to create your Gap analysis, your list will first guide your strategic business planning through the fundamentals, such as mission, vision, values, objectives, and KPIs to ensure that everything is in place. It will ask if the business has carried out sufficient market research, created implementation and communication plans, put in place projects, initiatives, measures, targets and so forth. It will ask if a SWOT analysis has been delivered to assess business enablers and whether strategy maps are in place. Other items for the list are proposed in the template above, for reference.

Add your RAG status

For each of the strategic elements, the business can then apply a Red, Amber, or Green status (RAG) and add any commentary required. Any items which are flagged up as orange or red will need to be addressed and worked to completion.

The Gap analysis can then be continued as a reference point as the company takes its strategic process forward, and it will ensure that all necessary activities are being considered, monitored and actioned appropriately.

Want to find out more?

You can learn more about the Intrafocus Strategic Planning Process (SPP)

Our team of strategy consultants work with businesses of all sizes and across all industries – profit, and non-profit – to help them enjoy strategic success. Whether you are new to the strategic process or looking to refine your approach for better results, our highly experienced team is here to help. The first step is usually to hold a tailored strategy workshop on your premises. Please contact us to find out more.