Gap analysis is a powerful strategic planning technique, yet like any tool, misconceptions around how to apply it can limit its effectiveness. This article debunks the most common myths to empower business consultants with an accurate understanding of gap analysis.
It’s Just Comparing “As-Is” to “To-Be”
A common oversimplification is viewing gap analysis as merely comparing current and desired future states. While that comparison is a key component, effective gap analysis entails thoroughly analyzing the gaps between those states to identify root causes and improvement opportunities. Simply documenting gaps without this analysis squanders the technique’s true strategic value for guiding organizational change.
In practice, a robust gap analysis should incorporate:
- Benchmarking against industry best practices
- Assessing performance drivers behind gaps
- Prioritizing gaps based on impact and effort to close
- Modeling and projecting gap closure over time
Rather than a basic snapshot, gap analysis is an ongoing process of diagnosis, evaluation and improvement planning.
It’s The Same As a Needs Assessment
While related, gap analysis and needs assessments have distinct purposes. A needs assessment identifies problems and opportunities from a user or stakeholder perspective. Gap analysis does so from an internal business process standpoint.
For example, a needs assessment might uncover customers wanting online account access. The gap analysis would then evaluate current IT systems and identify upgrades needed to provide that access.
Needs assessments define desired outcomes, while gap analysis assesses the work required to achieve them. The techniques are complementary rather than redundant.
The Gaps Are Set in Stone
Gap analysis provides a snapshot of gaps at a point in time, but organizations and desired outcomes evolve. An effective gap analysis specifies not just current gaps, but the trajectory and timeframe to close them.
For instance, a gap analysis might reveal:
- A 10% gap in customer satisfaction, projected to take 2 years to fully address
- A technology platform 3 releases behind industry standard, estimated to take 18 months to update
This dynamic perspective helps set pragmatic goals and priorities rather than static wish lists. As business contexts change, gap analysis must be continually revisited and updated.
It Requires a Massive Effort Upfront
Because gap analysis is a complex strategic exercise, attempts at comprehensive analyses often prove costly and time-consuming. This leads to perceptions of gap analysis as an arduous process.
More effective is an iterative approach, starting with targeted analyses on high-impact gaps. Quick wins can be prioritized to build momentum with modest initial effort.
As expertise and buy-in grow, analysis can organically expand in scope. Far from a monumental first step, gap analysis is an ongoing journey of alignment.
The Focus is Purely Financial
While financial metrics are clearly vital, true gap analysis takes a holistic view. Gaps concerning brand, culture, systems, and skills can be equally important for strategic performance.
Over-emphasizing financial gaps leads to narrow perspectives and perverse incentives. For instance, budget deficits can often be traced back to gaps in capabilities or relationships.
An inclusive gap analysis framework encompasses all facets of an organization and its environment. This enables assessing root causes of performance gaps and broader impacts.
It’s a Solo Activity for Analysts
Effective gap analysis requires synthesizing insights from across an organization. While coordination and analysis are essential, the most successful efforts solicit input and buy-in across departments, functions and leadership levels.
This cross-pollination of perspectives ensures more accurate assessments of current vs. desired states in complex contexts. Breaking down internal silos also builds momentum for gap closure.
Rather than a top-down mandated project, gap analysis should be an inclusive, consensus-driven activity. Embedding it into organizational culture maximizes impact.
There Are Universal Best Practices
While proven methods exist, each organization must adapt its gap analysis approach to fit its unique culture, capabilities and objectives. Off-the-shelf best practice solutions rarely deliver lasting value.
For instance, gap analysis for growth-oriented startups would differ substantially from mature enterprises focused on incremental efficiency gains. The gaps requiring attention also diverge dramatically across industries and markets.
Standard frameworks provide useful guardrails, but customizing them to organizational contexts is essential. This requires balancing structure with creativity and flexibility when practising gap analysis.
It’s a One-Time Activity
The best gap analysis provides an objective baseline rather than an end state. By illuminating key gaps and trajectories, it builds foundations for ongoing tracking and improvement.
Effective organizations revisit and update gap analyses quarterly or annually, adjusting baselines and targets as conditions change. This turns gap analysis into a dashboard for navigating continual improvement.
Periodic refreshment keeps analysis focused on priority gaps and actions. Ongoing gap analysis embeds strategic alignment into everyday operations.
Closing Thoughts
By dispelling misconceptions around purpose, scope and practices, business consultants can maximize gap analysis’ strategic value. At its best, gap analysis is an inclusive, adaptable and iterative process for aligning organizations with evolving business contexts. Maintaining realistic expectations of this powerful technique helps convert insights into impact.
Make progress, not perfection, the goal of your gap analysis pursuits. Small, sustained steps forward create lasting change.
