A gap can exist in different areas of your business. Gaps are the differences between where the business currently is and where you want it to go. Identifying and resolving these gaps is, therefore, crucial for reaching the desired ideal state.
Gap analysis can help you identify what is missing and hindering your business from moving forward or growing. It can also produce actionable insights that are helpful to your business. Let’s explore the practical steps you should take when conducting gap analysis.
Analyze the Current Situation
Identifying the area you want to improve and understanding its current state is the first step in gap analysis. You need to understand your current state before implementing any changes. Understanding your current state will also make it much easier to measure progress in the future.
Once you start the analysis, you might realize that your business has numerous current states that need a gap analysis. To avoid being overwhelmed, it is best to distill these into a few current states and use a gap assessment template to organize them all. Also, consider sticking to the ones that will have the most impact once you complete the analysis and resolution.
Identify Your Desired Future State
Where do you want to be in the future? What is your future target or goals? The answers to these questions inform the future ideal state you should be aiming for. As with analyzing your current state, you might have several future states depending on the areas you want to improve and gaps you want to fill.
Compare Future and Current States to Identify Gaps
Your gap analysis template should have two columns for your current and future states. The third one will be the identified gap. Under this column, you will provide answers for what you need to do to move from your current state to the future state.
Some businesses use graphs that show where the business is headed if they do nothing and where it could go if they close the gaps they identify. Doing this works well for quantitative measurements such as sales or increasing the number of employees. For other gaps like introducing a new product or providing a new service to meet customer needs, you should consider other ways to visually represent both states and the gap.
You should also investigate why certain gaps exist. For instance, you might ask why your revenue per employee is so low. Doing this will help you develop specific steps and measures to improve crucial metrics to reach the future state.
Create Plans to Fill the Identified Gaps
You should now have enough information to start formulating actionable solutions to fill existing gaps. You should base your improvements and plans on the information discovered when identifying gaps.
Also, consider how much implementing each solution will cost. If they are too expensive, you might consider options like outsourcing or working with another firm.
Gap analysis helps businesses and their owners or leaders understand where their business, departments, teams, and employees are, where they need to be in the future, and what to do to make this happen. The research they require can also help businesses identify additional issues they may not have discovered otherwise that could become crucial to their growth, expansion, and profitability.