Your Complete Online Guide to Conducting an Effective Gap Analysis: Part 2

Your Complete Online Guide to Conducting an Effective Gap Analysis: Part 2

17th February 2021

In our first part of this topic, we learned about the importance of performing a gap analysis, who needs to perform the analysis, the different types available, and the first step that you need to take to conduct a practical gap analysis. Please read on to learn more about other essential steps. 

Step 2: Analysing the Current State

After identifying the relevant areas where a gap analysis could be required and the main reasons behind the analysis, it’s time to review your business’s current state. This is essential to determine where you need to start to improve. The best way of doing this is by collecting all the relevant information and documenting all contributing factors that led to the current state. For instance, when dealing with workplace safety issues, check whether the issues could have been caused by lack of sufficient access and safety equipment, such as plant platforms, personal protective equipment, and fall protection systems.

You may decide to collect qualitative feedback through interviews or questionnaires. Identifying the relevant key performance indexes (KPIs) and where they currently stand. You’ll need trackable and measurable data points if you need to know the extent of the gap you intend to overcome. The documentation should be as specific and detailed as possible to help ensure your analysis is efficient.

You need to also note all the beneficial factors and any other factors that may negatively affect your organisation. This is important to enable you to dissect the areas you need to improve after defining your future state, as explained in the next step.

Step 3: Defining the End Goal

It’s now time to define attainable business goals to strive for. This will be the end state you intend to optimise your organisation to reach. It’s almost obvious that this should be an improvement over the current state.

The goal should be measurable for you to determine when you’ve achieved it. But how can you ensure you’re defining quantifiable goals for your business? One simple and effective way is to look at your company’s and industry standards. You can also refer to the bar set by your competitors.

Your business’s historical data can also guide you on where you need to be in the near future. For instance, if your business has been growing sales at 5% every year, your end goal might be to take the sales to 7% or higher. It might also be important to include your customers and employees when setting your goals since they’ll be playing key roles towards achieving them. This is something new you’re about to put your resources and time, so you need to get as much feedback on the goal before making it final.

Step 4: Understanding the Gap

At this point, you’ve analysed your current state and defined your goals. Now, you need to compare the two to determine and better understand the gap you are to close. The gap could be small that it requires no significant operational changes or it could require large operational or organisational changes to be made hence a change management process.

You’ll need to understand all the hurdles, if any, that you’re up against as you try to achieve your goals. It’s important to note and document all the challenges faced in your current state and assess which issues can be addressed quickly and those that would take time. Coming up with this list will help you define what the gap looks like, and you’ll be able to develop an effective plan of action to eliminate the gap.

You may make mistakes along the way, and it is okay. Remember, the point is to understand the holes in your strategies and you’ll, eventually, know how to do right.