A gap analysis is a tool that allows organizations to assess their current state versus their desiredfuture state and create an action plan that allows them to bridge the gap between the two.
While there are several methodologies and frameworks to use for a gap analysis, this gap analysis template will set you up with the basics needed to craft a thorough gap analysis.
A gap analysis is useful as it ultimately helps organizations determine the best strategy to overcome their shortcomings that keep them from achieving their desired vision
The role of a gap analysis template in strategic planning.
A gap analysis can be an important tool in strategic planning as it helps organizations create an action plan for achieving their future state, and it can be fundamental for determining resource allocation and setting goals.
The core elements of a comprehensive gap analysis template.
There are 5 core elements included in any gap analysis template. These elements include:
- Your organization’s current state.
- Your organization’s desired future state.
- A timeframe to completion of your future state.
- The gap between your future state and current state.
- Strategy or action plan to bridge the gap.
We will go over a basic gap analysis template and guiding questions to ask when conducting it.
Step-by-Step Guide to OnStrategy’s Gap Analysis Template
There are several specialized frameworks you can use for your gap analysis such as the Nadler-Tushman model, maturity model, and McKinsey S-7 (which will be explained later in the post).
However, for a more basic template, continue reading the steps below and follow along with the guiding questions to create your own gap analysis.
Step 1: Evaluate your current state.
When conducting a gap analysis, it is recommended to begin by evaluating your current state. You can determine the current state of your organization through various assessments such as a SWOT analysis, competitive advantage, McKinsey 7-S or even a Nadler-Tushman model.
Using one of these assessments for your current state analysis allows you to figure out what your areas of focus should be. While these assessments may unearth several areas of improvement, it is best to only focus on at most five at a time.
Pro Tip: If you’re stuck on which components or aspects of your business you should focus on or assess, try thinking of the balanced scorecard approach.
Break up your assessment by looking at your internal processes, customer service, organizational innovation, and financial state.
Once you’ve determined your focus areas, use these guiding questions to help you analyze your current state more deeply:
What is our current situation?
- What are our current strategies, processes, resources, capabilities, or areas of focus?
- What is our current level of performance?
- What are our current products or services, and how do they perform?
Step 2: Define your desired future state.
Next, it’s time to define your desired future state and goals. It’s important to note that you should have a complete vision statement before you start this exercise.
Bonus: If you create “mini” vision statements that support your overall vision statement, you have clear areas of focus for this exercise to reach in your future state.
It’s also helpful to have completed assessing your competitive advantages and competitors before completing this exercise.
What are our goals or desired situation?
- What level of performance do we aim to reach?
- What changes do we want to see in our strategies, processes, resources, or capabilities?
- What new products or services do we want to develop, and what are the expected performance levels?
Step 3: Set benchmarks and time frames to complete your goals.
Additionally, begin thinking about timing and the major milestones you’ll expect to achieve as you work towards closing the gap. Set benchmarks and time frames for success.
- What is the projected timeframe to close the gaps?
- When can we expect to start seeing improvements?
- What are the milestones along the way?
Step 4: Assess the gap between your current and future state.
Now you’ve come to the crux of the assessment: the gap. The gap is the deficiency between the current state and the target state. Assess areas where you’ve met your goals and areas where you still have work to do. The guiding questions for this section help you determine just what the gaps are between your current state and unrealized future state and answer why they exist:
What are the gaps between our current and desired situation?
- Where do discrepancies exist between our current strategies, resources, and capabilities, and where we want to be?
- Where are we underperforming against our targets or standards?
- What product or service gaps exist in terms of quality, scope, or performance?
- What are the root causes of these gaps?
- Do we currently lack resources, skills, or do we have outdated processes? Or is it due to external factors like market changes?
Pro Tip: It’s not enough to merely identify where your gaps are; you must also be able to explain the root causes of those gaps to help address and overcome them.
Step 5: Build an action plan & strategies to bridge the gap.
Now, it’s time to assess what strategy or actions will need to be taken to ensure that the gaps are closed. This is where you will begin to build your action plan and road map your path to success.
The basic elements that your action plan should include are objectives, actions to achieve each objective, timelines, measurements, contingency plans, and a method of communication. Here are some guiding questions to inform your strategy:
What actions are required to close these gaps?
- What are your objectives?
- What strategies, processes, or resources need to change or be adjusted?
- What investments are necessary for new tools, technologies, or infrastructure?
- Who is responsible for implementing the action plan?
- What are the KPIs or other measures of performance?
- What method will we use to monitor and how often will we monitor progress? How often will we report on our progress?
- What are the contingency options? How will we identify risks and mitigate them?
Bonus Step 6: Determine level of effort
Finally, in the last state of your gap analysis, you should consider the actual scope of work and effort that will be required to make the necessary changes.
Consider if this is something that can be accomplished within your internal team, and if so, what skill levels need to be advanced or filled? Or maybe it will be more efficient to outsource externally. Ultimately, is the effort required and the output anticipated comparable enough to justify the effort at this time?
These are important considerations to make, and your determination on the effort vs. benefit can be more thoroughly informed by answering these questions:
What resources, skills, efforts are needed to ensure that we can implement our plans successfully?
- What is the cost of implementing the required changes or interventions?
- What are the expected benefits in terms of performance improvements, increased revenues, cost savings, enhanced reputation, etc.?
- What training or development is needed to enhance skills?
- What financial, logistical, or operational challenges may arise?
- What is the priority for each action item?
- Do we have the resources and bandwidth to take on this project right now?
Determine now what the level of effort will be for this project and if you can realistically take it on. Anything determined low to medium effort can be implemented with slight resource re-allocation. Anything deemed higher effort may need executive or board assessment and approval.
Best Practices for Gap Analysis
As shown by the gap analysis template, this process can be a weighty and complex initiative for any organization and ensuring that you are doing everything correctly to set yourself and your team up for success is imperative.
Here are a few best practices to implement when planning, initiating, and reviewing the process:
Establish clear goals and metrics to avoid “scope creep.”
Scope creep happens when you start a project or initiative with certain parameters; then as the project goes on, you begin to realize that there are considerations you didn’t account for. So, as the project continues, you make a slight adjustment by adding an objective or action item.
Now, the initial boundaries of the analysis become blurred or extended without adequate consideration. This can happen if new objectives are added during the process, if the scope of the analyzed areas is widened, or if more in-depth analysis is conducted than originally planned.
Pro Tip: The “scope creep’ pitfall can be easily avoided with proper planning and frequent reviews. Ensure that the scope is clearly defined before you act.
After implementing the initiative, document everything, monitor and report frequently, and carefully manage any required changes. Ensure that the person responsible is clear in their responsibilities and the task expectations.
Ensure buy-in by involving your stakeholders.
Gaining relevant feedback and perspectives from your stakeholders in each step of the process is key, especially in the beginning stages of the analysis when trying to gauge your organization’s current state. This may even take a bit of time and various methods of reporting.
You can begin by conducting employee, management, and executive surveys or interviews, brainstorming sessions, customer satisfaction polls, and benchmarking or competitive advantage studies.
Involving your staff as well as the decision makers in the process will allow everyone to have a sense of ownership over the initiatives when the time comes to execute. For any successful strategic plan, you need stakeholder buy-in from everyone on your team.
Alternative Gap Analysis Frameworks
There are various frameworks that you could utilize within your gap analysis, which we will describe briefly. Some of the more common frameworks are:
The Nadler-Tushman model is essentially an organizational diagnostic tool used to assess the alignment between teams and initiatives in the organization. Although it is not specifically a gap analysis, it can be utilized as one in order to identify discrepancies or deficiencies within the organization.
This model looks at whether the inputs from the organization align with the various components in the transformation process to create the desired output. If the three align, then you’ve created a congruent initiative, and if not, then these prove to be gaps that need to be addressed.
A major drawback of this analysis model is that it is very good at diagnosing and pinpointing the issues within an organization, but it doesn’t offer many solutions. This may result in needing to employ a different framework or methodology to determine the best way to bridge the gaps or resolve the shortcomings.
A maturity or capability model gauges a company’s maturity in several areas and points out the areas for improvement. A maturity assessment is conducted in four steps:
- List the capabilities you want to assess.
- Create a scale of different maturity levels: basic, below average, average, advanced, world class.
- Define the maturity levels of each capability.
- Position the current state and future state of your company on the scale.
You can use the Maturity model to run a competitive analysis of some of your competitors or other organizations in your industry.
Some cons of implementing this in your gap analysis is the progression may seem too rigid and not account for the unique aspects of each organization when it comes to innovation and development. It may also lead teams to focus on the particularities of the process itself, rather than the bigger picture or results.
A SWOT analysis is a matrix with four key areas:
- External opportunities
- External threats
- Internal strengths
- Internal weaknesses
The SWOT serves as a tool to assess your current state by looking at your strengths and weaknesses so you can align your team with which areas you need to improve upon. The external opportunities and threats can also be useful in a gap analysis as they can help you explain why the organization has weaknesses in certain areas, and why the gap exists between these in your current state and your ideal future state.
Some cons of this particular framework are that it may lack concrete or verifiable data and that it tends to run on the more subjective side.
The McKinsey 7-S Framework will help you ensure that all parts of your organization are aligned and work in harmony and that your organization is well organized to achieve its vision and strategic goals. It ensures that alignment is met between the 7 ‘S’s in an organization:
- Shared values
There are a lot of complexities that go into the McKinsey 7-S assessment, but essentially the goal is to summarize the company’s current state, summarize the target state, ensure that the S’s in your company’s target state are correctly aligned, and then list the key initiatives that need to be done to reach the company target state.
This can be used in a gap analysis to see where your gaps exist in those key areas of your business. It allows you to outline where your strengths, as well as your weaknesses, specifically lie. One significant drawback of this methodology is that it is complex and may require significant time and resources to conduct thoroughly, as well as certified McKinsey consultants.
A gap analysis template is a valuable tool for businesses. It enables you to identify areas of improvement, set clear objectives, and develop an effective action plan to bridge the gaps between your current and desired state.
By conducting a comprehensive analysis, you can pinpoint root causes of these problems and implement strategies that will lead you to successfully bring yourself closer to your desired future state. Whether you are looking to enhance your employees’ skills, analyze market opportunities, or streamline your processes and efficiencies, a gap analysis template provides a structured approach to achieving your goals.
Gap Analysis Template FAQs
The five fundamental components consist of the current state, desired future state, time frame to completion, the gap between the current and future state, and the strategy to bridge the gap. The gap is the discrepancy between these states, highlighting areas for improvement.
A good gap analysis template is characterized by its clarity and simplicity. It should clearly outline the goals or objectives to be achieved, analyze the current and desired future states, and provide practical steps for bridging the gap. The template serves as a roadmap for success.
Give this a shot!