Gap Analysis

Definition

Gap analysis is the process of comparing an organization's actual performance or capabilities to its desired, optimal, or target performance or capabilities. It identifies the gaps between the current state and the desired future state, allowing organizations to develop strategies to bridge those gaps.

5 Must Know Facts For Your Next Test

1. Gap analysis helps organizations identify areas for improvement and prioritize initiatives to close the gaps between current and desired performance.
2. It is a crucial step in the strategic planning process, as it allows organizations to align their resources and efforts with their long-term goals and objectives.
3. Gap analysis can be applied to various aspects of an organization, such as financial performance, operational efficiency, customer satisfaction, and talent management.
4. The results of a gap analysis can inform decisions about resource allocation, process improvements, technology investments, and talent development initiatives.
5. Effective gap analysis requires a deep understanding of the organization's current state, as well as a clear vision of the desired future state, which is often defined through benchmarking or industry best practices.

Review Questions

• Explain how gap analysis can be used to measure and evaluate strategic performance, as described in topic 9.6.
  • Gap analysis is a key tool for measuring and evaluating an organization's strategic performance. By comparing the organization's actual performance to its desired or target performance, gap analysis identifies areas where the organization is falling short of its strategic goals and objectives. This information can then be used to develop targeted strategies and action plans to close those performance gaps, ensuring the organization stays on track to achieve its long-term strategic vision. Gap analysis provides valuable insights into the effectiveness of an organization's strategic initiatives and helps leadership make informed decisions about resource allocation and future strategic priorities.
• Describe how gap analysis can inform talent development and succession planning efforts, as discussed in topic 11.6.
  • Gap analysis is crucial for effective talent development and succession planning. By assessing the organization's current talent capabilities against the desired future state, gap analysis can identify skill gaps, leadership development needs, and potential succession planning challenges. This information can guide the design of targeted training programs, mentoring initiatives, and career development opportunities to build the necessary competencies within the workforce. Additionally, gap analysis can help organizations proactively identify high-potential employees and develop tailored succession plans to ensure a smooth transition of leadership roles over time. Ultimately, gap analysis enables organizations to bridge the talent gaps and ensure they have the right people in the right roles to support the achievement of strategic objectives.
• Evaluate how the insights gained from a gap analysis can inform an organization's overall strategic decision-making process.
  • The insights gained from a comprehensive gap analysis are essential for informing an organization's strategic decision-making process. By clearly identifying the gaps between the current state and the desired future state, gap analysis provides a data-driven foundation for prioritizing initiatives, allocating resources, and aligning the organization's efforts with its long-term goals. The gap analysis findings can guide decisions about process improvements, technology investments, talent development programs, and other strategic initiatives designed to close the identified performance gaps. Furthermore, the gap analysis process encourages organizations to continuously monitor and evaluate their progress, enabling them to adapt their strategies as needed to ensure they are on track to achieve their objectives. Overall, the strategic insights derived from gap analysis are crucial for enabling organizations to make informed, data-driven decisions that drive sustainable growth and competitive advantage.

Related terms

Strategic Planning: The process of defining an organization's strategy, or direction, and making decisions on allocating its resources to pursue this strategy.

Benchmarking: The process of comparing one's business processes and performance metrics to industry bests or best practices from other companies.

SWOT Analysis: A strategic planning technique used to identify an organization's Strengths, Weaknesses, Opportunities, and Threats.