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Upon completion of this module, you should be able to:
• Define what is a Gap analysis
• Give examples of soft and hard metrics of a Gap analysis
Gap Analysis Template: The 3 Key Elements of Effective Gap Analysis
Gap analysis compares the gap between an organization’s actual performance against its potential performance. In gap analysis, you typically list out the organization’s current state, its desired state, and a comprehensive plan to fill out the gap between these two states. This analysis can yield a lot of insights into an organization’s performance and functioning. It is pertinent for businesses as well as more organic organizations such as school classrooms and communities.
Gap analysis is more organic and flexible than SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, which typically follows a four quadrant pattern. Gap analysis may be highly quantitative or conceptual, using either Excel worksheets or flowcharts. The analyst has much more freedom in choosing what to focus on. At the same time, every gap analysis template must have a few essential components, as shown below:
I. State Descriptions
The first step in gap analysis is identifying your current and future desired state. This can be done by describing the following:
1. Your Current State
Every gap analysis starts with introspection. Your gap analysis template should start off with a column labelled ‘Current State’ wherein you list out all the attributes you’d like to see improved. Your focus can be as wide (ex: the whole business) or narrow (ex: HR policies within CRM division) as the objective demands. The analysis can be quantitative (‘currently get 50 orders per day’), qualitative (‘lack of diversity in workplace’) or both. The key thing is to be specific and factual with an emphasis on identifying weaknesses.
2. The Future State
The future state represents the ideal condition you’d want your organization to be in. This state can be highly specific (ex: ‘increase order count to 100 per day’, ‘decrease absenteeism by 25%’), or generic (‘create more inclusive work culture’). Your gap analysis template should record all the idealized attributes as they correspond to the current state.
Sometimes, you may not even have a clear conception of an idealized future state and might be conducting a gap analysis as an exercise towards self-improvement. In this case, you can record ‘N/A’ under the future state column.
II. Bridging the Gap
This is where you identify and describe the gap before finding ways to remedy it.
1. Gap Identification
The next column in your gap analysis template should record whether a gap exists between the current and future state. A simple ‘Yes’ or ‘No’ can suffice (a description of the gap will be made in the next column).
2. Gap Description
The gap description should record all the elements that make up the gap between the current and future state. The description should be consistent with the current/future state. It can be qualitative (‘lack of clear HR policies for employee termination’) or quantitative (’50 orders/day difference between current and ideal state’). This should only serve as a description, not a remedy.
III. Factors and Remedies
This is where you identify the factors responsible for the difference between your current and future performance. You can then use this data to come up with a remedies and action plans to tackle the performance gap.
1. Factors Responsible for Gap
The next part of your gap analysis template should list all the factors responsible for the gap identified in the previous column. This list should be specific, objective and relevant (ex: ‘poor employee pre-screening’ can be one reason for high workplace absenteeism).
2. Remedies, Actions and Proposals
The last step in the gap analysis is listing out all the possible remedies for bridging the gap between the current and ideal state. These remedies should directly address the factors listed in the column above (ex: ‘video pre-screening for all candidates before interview’ can be one remedy for employee pre-screening issues). The remedies must be action oriented and specific (‘tie up with new payment processor to reduce shopping cart abandonment’, not just ‘effect measures to reduce shopping cart abandonment’).
Gap analysis can be an effective tool for analyzing and understanding organizations. It is particularly applicable in a new business setting, of course. New businesses will find it especially useful for gaining insights into how to organize and allocate resources.
STEP 3: Create a Plan of Action
At this point, it should start becoming clear as far as what your next step should be. Look at areas of deficiency and create a plan for improvement based upon these areas given the resources available. Let’s say your action plan looks like this:
Come up with your own recommendations, and place them in the “Action Plan” section of your gap analysis chart.
STEP 4: Back Up Your Plan of Action with Data and Analysis
Finally, after your investigation and planning are complete, you will want to report your findings with the appropriate data and analysis presented. To do this, you may wish to use the gap analysis report template in the next section. In your report, you will include things like the background of the company and analysis, problems that have occurred, and even reasons for undertaking the analysis.
Then, you will present your findings, showing the strategic objectives, current standing, deficiencies, and whether or not the current situation is acceptable. If the situation is unacceptable, you will present a course of action for improvement. Finally, all of your analysis will be backed up with the data gathered during the analysis.
Gap Analysis – Restaurant Service Staff
Scenario: An established restaurant recently changed hands with the new owners looking to maximize its potential. They hired additional staff and arranged for the permits for and construction of an out door patio/eating area. With the expansion initially came more customers, but also increased complaints and a gradual drop off/loss of regular customers.
A satisfaction survey was made available with the presentation of the meal cheques and was also available online. From information collected, it was determined that restaurant patrons were happy with the food but unhappy with the service, in general.
A gap analysis process was put in place and asked the following questions about service staff:
- Do the servers really know what they’re supposed to do?
- Do the servers understand how to do the job?
• Do the servers receive specific, objective feedback on their current performance?
- Do the servers have all the equipment they need?
- Are the servers capable of doing what’s expected; is there a good job fit?
- Do the owners offer adequate incentives to perform?
The answers to these questions led to the identification of the following gaps:
- There were no job descriptions or written standards of performance.
- While the servers received informal feedback on their performance, the feedback was generally vague and non-specific. No formal appraisal system had been put in place.
- There were inadequate incentives (and very few consequences) for performance.
- There were no job descriptions or written standards of performance.