Every organisation aims at working efficiently and profitably while achieving growth in a primed manner. This is often made possible by staying on top of things and creating setups wherein every process works in perfect tandem with the underlying business operations. The management must possess complete clarity on where it should be diverting its funds and resources at all times.
However, easier said than done, this state of affairs can only be achieved when organisations truly understand and know where their shortcomings lie. Gap Analysis lets you do that and much more. It is a strategic analysis technique that lets one identify gaps between the current situation and the desired future outcome.
Gap Analysis is excellent for, firstly, identifying the gaps and, secondly, helping to close these gaps by pointing out the opportunities for improvement. It highlights the areas that require focus and resources by answering the following three questions:
- Where are we?
- Where do we want to go?
- How do we get there?
How Gap Analysis Helps Make Team Goals More Achievable?
The need for Gap Analysis arises out of any shortcomings faced by the business. The customer service department may be slow in responding to customer complaints or, perhaps, the sales team might have missed its targets or probably the organisation needs an overhaul in terms of the way business decisions are being made. Gap analysis is the answer to any and every question.
It also allows everyone on the team to come together and look for solutions cohesively. One of the downsides to having multiple people involved in the strategic planning process is the differences in opinions and the lack of clarity on the way ahead. Gap analysis provides a framework that lets people answer specific questions in the form of a template and arrive at a suitable plan for the future.
Simply put, the need for gap analysis may come up multiple times in an organisation.
- Is it time to hire new team members?
- Invest in new software? Develop new systems?
Answering all these questions becomes much easier with the help of a thorough gap analysis.
Benefits of Conducting Gap Analysis
Gap Analysis brings in its wake a lot of benefits that are not only measurable but also reflective of whether the business is in the right direction to meet the organisational goals. Here are some of the ways in which gap analysis can prove to be a fruitful exercise:
An organisation can obtain an in-depth analysis of their business with the help of gap analysis. It provides a deep insight into each aspect of the operations, even the ones which might otherwise be left out.
A gap analysis can help identify areas of improvement in an organisation’s operations. Whenever any department underperforms, gap analysis can be conducted to figure out the root cause behind the same. If the customer service department is failing to respond to all customer complaints and there are a lot of escalations, gap analysis can point out any process enhancement opportunities.
If an organisation is looking to expand its product portfolio, a gap analysis could be its best bet in looking out for new services or product opportunities in the market. There may be several gaps between what a company is currently offering and the expectations of the customers, and gap analysis could help identify and cater to this gap to develop new offerings.
One of the generic and very important benefits of conducting a gap analysis is that it helps improve the efficiency of the business by highlighting anything unusual going on in the company. Once that is revealed, it becomes a lot easier to focus resources and energy on exactly what needs to be done.
How to Perform a Gap Analysis?
To make the team goals more achievable, it is important to first identify which area of business requires to be analysed, what are the gaps, what is the end goal, and how to get there – gap analysis helps answer all of these.
Here are the five steps to be followed while conducting a gap analysis for any specific team, business division or the organisation as a whole:
Analyse the Current State:
Start with the current state, always. Gather an understanding of where the organisation stands at the moment before making plans to achieve goals. For instance, a company aspires to become the industry leader in their space but faces frequent lawsuits from unsatisfied customers for product-related issues. Do the problems exist in products or are customer queries genuine and customer service teams need to be trained to handle issues better at the initial level? It is impossible to perceive this without digging deep, talking to the people involved, gathering data and exploring the KPIs. Figure out what leads to customer irritation by looking at both quantitative information, such as the organisation’s NPS score or the number of dissatisfied customers handled each week through calls; also look into qualitative information such as customer comments and the feedback given by the customer service team that pinpoints any sorts of loopholes in catering to them.
The aforementioned process remains the same even if you want to analyze a more strategic area of the business., A sales team looking to become the best in their industry or figuring out any gaps internally should get down to analysing their sales pitch, conversion rates, targets, growth rates, etc.
It is important to get an in-depth understanding of the problem at the initial stage. This is made possible by shedding light on all the contributing factors and realising what the issues are. Doing so provides a better insight into the bigger picture.
Identify Where You Want to Go:
Once you have a complete picture of the events that are happening, next you should focus on what the organisation wants to achieve and how it should use the available information to do that. Ask questions that will automatically answer where the company wants to go in the future. What should the future look like? What’s not happening that should be?
For instance, a particular marketing company has a range of freelance writers. However, if a significant amount of its internal time and resources gets wasted in editing and rewriting the work received from freelancers, then it is a problem. The company may want to look into it and completely restructure their content creation process to achieve more efficiency.
Similarly, a factory unit of a particular production company may want to achieve a state wherein they can meet all their safety regulations. This may include regular temperature checks of the workers and ensuring that everyone present at the plant site dons safety hats, masks, gloves, etc. The current situation may be far from what the company aspires for.
In both the situations above, you need to change the current scenario as it falls short of the ideal state. But instead of fumbling in the dark by putting in place random quick-fixes that won’t get the organisation anywhere, it’s good to picturise the goal and then move ahead in the direction.
But realistically, how to get into the ideal state? That’s the next step!
Find Gaps and Figure Out Solutions:
The first two steps, albeit necessary and imperative, will not seal the deal. They are just the building blocks for the final solution. Laying down goals without putting forward the required solutions can make goals seem lofty and unattainable. This is why this step requires eliciting doable solutions that will bridge the gap between the current and the desired outcomes.
Going back to the marketing company example we quoted before, a gap analysis will raise a valid question that needs to be answered: how to reclaim brand identity by being more in control of the company’s content?
Some of the workable solutions to the above could be:
- Explore in-house content creation possibilities, which means hiring full-time marketing resources. Again, it would be good to consider that this can prove to be more expensive than working with freelancers.
- Re-evaluate the pool of freelancers that work with the company; retain and work only with those who meet all the guidelines laid down and submit quality work, while letting go of those who do not. One of the downsides of doing this is that the process can be time-consuming and the company can experience higher turnaround time to cater to their customers due to being associated with fewer number of freelancers than before.
- Streamlining one’s content creation guidelines and retraining the freelancers can be another option to consider, which will again require time and effort and does not necessarily guarantee the required results.
Depending upon the company’s requirements, one of the above solutions should be implemented. If the management feels that it’s feasible to increase expenditure by hiring full-time resources, to obtain complete control over the content, then the first option is their best bet. However, the second and the third options can be mulled over if they are cost-conscious and there is no room for more investment.
Arrive at a solution that’s a win-win for everyone, based on the organisation’s and the team’s priorities.
Implement Plans to Bridge Gaps:
Change is constant; yet with every change, there comes a bit of resistance. Once a decision is reached upon, it’s important to take the rest of the team members and the other departments into confidence. Come up with a plan of action as the changes may affect the other departments, too. The final steps would be to establish a clear strategy and measurable goals, and transition into implementation mode by involving every team member. Assign specific tasks and make people accountable for the same. Have a timeline or schedule for rolling out the planned changes.
Below are some of the gap-analysis tools that lend a more practical approach to everything discussed above:
The good old SWOT analysis is probably one of the oldest and most widely used tools for an organisation to discover their Strengths and Weaknesses in the internal environment and Opportunities and Threats that exist external to the company. This can be done by the steps which follow:
- Indulge in a brainstorming session by gathering team members
- Create a SWOT Analysis matrix by listing down strengths, weaknesses, threats, and opportunities in a clockwise manner
- Discuss and figure out the ways to let go of the weaknesses by relying on the strengths internally
- Similarly, explore opportunities present in the market to ward off threats that may exist in the market
SWOT analysis is a quick, easy, and reliable tool for analysing any sort of gaps that need to be filled in going forward as an organisation.
Going by a lot of different names such as herringbone, Ishikawa, and cause & effect, the fishbone analysis helps to dig deep into the root cause of the problem. The fishbone diagram has a distinctive shape and lists the 6 M’s that help target exactly where the issue persists; these are:
- Mother Nature (environment)
Choose a category that is related to the central problem and study the cause-effect relationship.
A lot similar to SWOT analysis, PESTEL analysis helps to identify threats and opportunities by examining external business environments.
Here, PESTEL stands for:
This analysis proves to be quite useful when a company wants to look at the external situation from a macroeconomic point of view. This helps in minimizing risks from outside turbulences and current issues while looking at the opportunities for change.
McKinsey 7S Framework:
McKinsey 7S framework puts focus on the 7 interrelated elements of an organisation – Strategy, Systems, Structure, Shared Values, Skills, Style and Staff. The first three S’s are also known as hard elements, ones which are tangible and hence, can be controlled. The last four S’s are referred to as soft elements, intangible ones and therefore cannot be controlled. This analysis helps figure out whether all the elements are aligned well with each other. If not, analyse the gaps and address them. Define the state where all of them would be aligned together optimally. Based on the desired state, come up with a plan of action to realign the same, implement changes and review the same continuously.
This model gives a holistic view of the operations of an organisation by examining how each business process affects another and identifying which gaps affect efficiency.
The operations are divided into three groups namely:
- Input: The company culture, employees and all the resources that are used to create the company product.
- Transformation: The teams, processes, and systems that are responsible for taking the input and turning them into an output.
- Output: The final product or service.
The Gap Analysis is an essential tool for every business to streamline their operations and achieve team goals in a structured fashion, using strategic means that helps meet the distance between the current state and the ideal future state.