How to conduct a gap analysis to close organisational shortfalls

Executive overview

Without knowing where your gaps are, you only discover failures at the deadline. A gap analysis compares current state to desired state and surfaces what is blocking goal achievement.

Four types apply across most organisations: market, strategic, profit, and skills. A four-step process turns the analysis into an action plan.

Gaps not identified before the planning period are gaps you can't fix in time.

The four types of gap analysis

• Market gap analysis — where product supply is not meeting consumer demand
• Strategic gap analysis — whether the organisation is on track vs. competitors and long-term goals
• Profit gap analysis — whether annual or long-term profit targets are reachable
• Skills gap analysis — whether human capital matches what goals require

When to conduct a gap analysis

• Before a strategic planning period (e.g. before Q3, to compare progress against annual goals)
• When a department or area is consistently underperforming
• When evaluating compliance metrics or rolling out new training requirements
• Any time — waiting for end of quarter is not required

The four-step process

1. Identify current state — define which KPIs and metrics matter most for success
2. Set SMART goals — specific, measurable, achievable, relevant, time-bound targets for the desired state
3. Analyse the gaps — investigate KPIs to find the root cause; ask: do we lack resources or personnel? Are resources allocated effectively?
4. Evaluate solutions and build an action plan — determine what processes to optimise and whether new hires are needed; monitor and readjust continuously