What is gap analysis?

By | May 21, 2017

Gap analysis is exactly what is sounds like – figuring out how far you are from a particular goal or target. Consulting firms do this all differently. It takes many forms, but is super common. In fact, I can’t think of any project where we did not include at least one gap analysis somewhere.

Nothing fancy. While it may sound official, it’s common sense. You weigh 190 lbs, and you want to weigh 180lbs? 10lbs is the gap.

They can look a lot like performance scoreboards – here is an example from a hypothetical call center. Goal – current performance = gap. Simple, right?

Harder than it sounds, for lots of reasons. . . 

1. Urgent trumps important. As I blogged about in the past, clients have full-time jobs, they don’t have the luxury of focusing on 1 problem intensely for 4 weeks. They are insiders and the onerous onslaught of day-to-day work often crowds out time for more strategic, thinking time. Consultants have it easy; we get paid to stop and focus on important questions for clients.

2. What’s the question? Like a student caught day-dreaming in class, it’s completely possible to loose your bearings and not know what that main question is. Odd, right? It’s not uncommon for corporate folks to have 5-7 annual objectives, which in reality is often 3 too many. In the One Thing (affiliate link), Gary Keller argues that we should focus on the “first domino” – the critical one thing – that causes all other things to happen.

What’s one big thing you could get done today, this week, this month – that would start a chain reaction of achievement?

Note to clients: Any Fortune 500 company uses LOTS and LOTS of metrics to measure their business – and it’s unrealistic that you will abandon those, or not track them. That said, in the nuts-and-bolts of YOUR BUSINESS, pick the goals and targets that will matter. 

3. What does good look like? Benchmarks are a convenient reference point, but not the answer. Each situation is different. Strategy is about being the best YOU, not targeting 80%, 85%, 90% of the average of everyone. Regression to the mean, not good.

Gotta set 2 goals.

  1. Short term- what can we fix today with better process, focus, and some founder’s mentality? These are low-cost fixes. Stuff that is LONG overdue, and not rocket science.
  2. Medium term – optimize for the future, not for today.  Paraphrasing Drucker,  pursue (tomorrow’s) opportunities, don’t solve (yesterday’s) problems.  Too often, corporate America tries to solve yesterday’s issues.

4. Where are we now? Even if you identify the right goal (not merely copying the competition), how do you accurately weigh yourself? Data is often slow to collect, sometimes inaccurate, and often inconclusive. Data is often a mess. You would be surprised how much precious time is spent simply getting a useful data set for analysis.

Note to clients: Save the consultants’ time (and thereby your money), by getting the data to them as soon as possible. You are paying for the analysis, thinking, and implementation – not the data collection and cajoling. Getting the data is on you.

Note to clients: Ask for a sustainable measurement system. Anything that requires exhaustive excels with macros, and sophisticated calculations – err – will probably get abandoned like an expensive exercise machine in your basement. 

Consultants: Random data points are not helpful. Definitely show the trend. Also, don’t use radar charts, so hard to read. Especially useless if there is no real correlation between the metrics. Don’t make the client tilt their head to read your charts. Make it easy to understand. Use more tables.

5. Okay, now what? Once we know the gap – how do we go about “tackling the bear?”  This is also the core job of consultant – or any change agent – make it easy to do the right thing. Head, Heart, Hand. It challenges the head, motivates the heart, and gets the hands moving. Much more this later. . .

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3 thoughts on “What is gap analysis?

  1. Eric

    Can you elaborate what’s wrong with the radar charts? As a “client”, I see nothing wrong with that.

    The hard part are really the analysis of sub-optimal data, the identification of choices and an actionable execution plan – none of them is covered in this article.

    1. consultantsmindadmin Post author

      Hello,

      For me, the radar chart is needlessly graphical. In my experience, a simple table, or stop-light (red,yellow,green) or even bar charts are easier to “see”. That said, if it works for you, please use them.

      Completely agree about bad data (http://www.consultantsmind.com/2013/02/18/9-reasons-clients-often-have-bad-or-missing-data/), and identifying choices, and actionable plans. Will definitely post on those in the future.

      Thank you for reading and the pushback.

      1. Eric

        Thanks for your response. Look forward to your further insights!

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