Gap Analysis

by | Jul 18, 2019

Much of what we do here at The Shuler Goup is finding holes and gaps, and then filling those holes and bridging those gaps. One of the exercises we take our clients through as well as something we do here in our own business, is what we call gap analysis.

One method is to sit down and brainstorm with your team about certain factors or metrics. Let’s say, for example, revenue. First, you have to recognize (know) what your revenue is. Then you look at where you want it to be. Sometimes there’s a gap between those two numbers.

You can look at other things like number of clients, number of employees, customer retention, expenses, space utilized in your facilities, production numbers, and employee satisfaction. All sorts of things you can measure and survey because for anything that you can measure, you can figure out if there is a gap.

And then if you determine that there is a gap, the next step is…what do you need to do in order to bridge that gap?

First, determine what you’re measuring and what’s important. Of course, it depends on the particular business or organization. A charity, for example, is going to be measuring donations, donor events, volunteers, volunteer hours, efficacy of the volunteers or the staff. A manufacturing company, on the other hand, is going to look at number of units produced, the cost per unit produced, the shipping lines, the verticals, etc.

Those are all different things these two different organizations, in these examples, will measure. These are called KPIs, key performance indicators, or metrics, or whatever you call them… things you’re keeping an eye on. You can’t necessarily have in front of you all the data all the time because then it all just starts to swim before your eyes. Even if you have a team who’s dedicated to this, you still need to focus on certain things at certain times. So as an organization, you and your team decide what you are focusing on and what you want to measure. You need a starting point you can look at right now so you can see where you are. Are you at the end of the quarter, the end of the year, in the middle of a quarter?

Next, determine how you want to start measuring. How often do you want to look at these metrics and these numbers? Is it weekly, monthly, quarterly, or annually? Pick your starting point, then review and look backwards. Where was the organization a year, two years, or five years ago? Knowing where you are now is important, but knowing how far you’ve come is very telling and also important. Then you’re comparing where you were to where you are now.

  • What’s the difference?
  • Is there an improvement?
  • Has there been a decline?
  • Do you know why there’s been an improvement?
  • Do you know why there’s been a decline?

Finally, you look forward…here’s where you want to be. There’s probably a gap because if there’s not some difference, then you’re just static, status quo. An organization is a living organism, and just like a human being, there needs to be growth, evolution, adaptation, and change. Otherwise, the organism will die.

So, there should be some sort of change that you’re looking at between now and the future There are gaps, from before now (the past) and now to the future. Looking backwards,

  • Why did we improve?
  • Why did we decline?
  • What was happening?

Basically, you’re applying data to why occurred in the past.

Then, you look at now and where you want to be in 1, 3, 5 years. What are the gaps?

  • How do we bridge that gap?
  • How do we make those changes from now to then?

This is the basis of your gap analysis.

I recommend doing this systematically and as part of a larger, formal process every year. Implementing a regular review would help you understand where the gaps are, not that you want to make mid course corrections, but help you have your finger have on the pulse of what’s happening so that you can see trends. By doing this gap analysis on a regular basis you will start seeing more trends, so that you can make better decisions.

That gap analysis and its counterpart, how you bridge that gap, is crucial for a thriving organization.

You have to know what’s going on. You need measurable data. You have to understand why you are where you are. And you have to know how to get to where you want to be.

Hopefully you’re doing some of this already, and you and your team take time on a regular basis to step back and look at the organization from a big picture, landscape view.

Too often we’re mired in the details, and we don’t take enough time to step back and see how our efforts are paying off and what changes we might need to make. So make that gap analysis part of a formal process that you and your executive team do on a regular basis.

If this is something that isn’t familiar to you or, you’d like a checkup to see if there’s anything you need to improve and maximize in the process you’re already doing, that’s where we at The Shuler Group can come in and help.

It’s those gaps that may not be apparent when we’re in the trenches, but become very much apparent when we step back and look at the whole landscape.


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