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Gap analysis is a tool that is used to evaluate the performance of an organization by comparing its actual performance to its potential or desired performance. Once an organization clearly defines the gaps in their performance, they will be able to create a strategic plan to address and eliminate these gaps and improve their performance. Gap analysis, therefore, provides organizations with information to evaluate their performance, resource use, and strategies.
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As gap analysis can be used as a tool to evaluate the performance within many different aspects of a business, there are multiple different gap analysis methodologies. Let’s take a look at a few:
Some key benefits of performing gap analysis are:
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There are multiple different approaches that can be taken to perform gap analysis, including:
Fishbone analysis, also known as the cause-and-effect diagram, is often used by organizations to identify the root cause of an issue. The diagram focuses on the 6 Ms:
These 6 Ms help us understand the relation of these key elements of a business with a central problem. As the name suggests, the diagram mimics a fish skeleton; the central problem is placed on the fish’s head, the causes extend out to the left as the main bones, the ribs extend out of the bones as the major causes (in this case, the 6 Ms), and the sub-branches extend out of the ribs to denote the root causes of the major causes.
SWOT analysis is a tool that is used to scope out the internal and external factors that a business should be concerned with. The internal factors are the business’s strengths and weaknesses and their external factors are their opportunities and threats. This tool encourages the use of strategic thinking to achieve business goals and objectives. It also helps understand the business’s external environment so that the organization can capitilise on their opportunities and is always prepared for any unexpected changes that may affect them.
The McKinsey 7s model involves assessing 7 key interrelated elements of an organization. These 7 elements are divided into hard and soft elements; hard elements are tangible and can be controlled while soft elements are tangible and cannot be controlled. These are the 7 elements:
Gap analysis is a technique used to evaluate the performance of organizations by comparing their actual performance with their desired performance.
Gap analysis is leveraged by organizations to identify the gaps in their performance so that they can create an action plan to effectively address these gaps.
Some effective gap analysis tools are SWOT analysis, McKinsey 7s framework, fishbone analysis, and Nadler-Tushman Model.