A Comprehensive Guide to Conducting a Gap Analysis for Strategic Planning - Examples and Templates Included

A gap analysis is an extremely useful strategic planning tool to help businesses identify gaps between their current state and desired future state. This comprehensive guide will explain what a gap analysis is, provide a four-step template to conduct one, outline the benefits, and include examples and templates so you can perform a gap analysis for your business. Read on to learn how to use a gap analysis to set goals and improve your business strategy.

What is a Gap Analysis and Why is it Important for Strategic Planning?

A gap analysis is the process of comparing your current performance or situation against your goals and desired future state to identify gaps and areas for improvement. It involves assessing where you currently are, where you want to be in the future, and what steps you need to take to get there.

Gap analysis is an important part of the strategic planning process. It helps you identify gaps between your current objectives and capabilities and your desired goals and business requirements. This allows you to create strategic plans to close those gaps.

Conducting a gap analysis provides many benefits, including:

• Identifying gaps between your current state and goals for future growth

• Determining areas in your business that need improvement

• Assessing strengths, weaknesses, opportunities, and threats (SWOT analysis)

• Setting measurable objectives for performance improvement

• Creating an action plan with specific steps to bridge the gaps

• Allocating resources effectively to implement strategic plans

• Building a foundation for making business decisions

In summary, gap analysis is a data-driven assessment to help you gain insights into how you can evolve various areas of your business to achieve your long-term vision. It is an essential tool to drive progress, meet objectives, and maintain a competitive advantage. This guide provides actionable templates and examples so you can conduct an effective gap analysis.

Why Perform a Gap Analysis?

Conducting a gap analysis provides strategic insights and has a variety of benefits:

• Bridge the gap between where your business is today and your goals for the future

• Identify strengths, weaknesses, opportunities and threats (SWOT analysis)

• Assess your current capabilities and performance

• Determine areas or processes that need improvement

• Set specific, measurable targets and objectives

• Develop an action plan to drive progress and growth

• Optimize resource allocation to focus on priorities

• Gain competitive advantage by enhancing strategy

• Meet and exceed customer expectations

• Boost profits and shareholder value creation

Gap Analysis Process Overview

The gap analysis process involves four key steps:

1. Determine your current state

2. Define your desired future state

3. Identify gaps between the two

4. Develop plans to bridge the gaps

This strategic planning process enables you to gain insights into how to evolve and meet your business goals. The gap analysis process transforms abstract strategy into actionable steps for growth.

Step-by-Step Guide for Conducting a Gap Analysis

Performing a gap analysis involves a four-step process:

1. Identify Your Current State

The first step is to objectively assess your company's current state across all areas of the business. This includes evaluating:

• Current business and operational performance metrics

• Existing organizational and departmental structures

• Resources, staffing levels, and capabilities 

• Processes, systems, and technologies in place

• Products and services offered

• Market position and brand reputation

• Financial performance and profitability

• Customer satisfaction levels

• SWOT analysis of current internal and external factors

Conducting market research, competitive analysis, and benchmarking studies provides additional context around your current standing. Use as much qualitative and quantitative data from multiple sources as possible to paint a clear picture of your present-day situation.

Techniques for Assessing Current State

Some techniques and frameworks to assess your current state include:

• Financial analysis - Review past financial statements, sales data, profitability ratios, etc.

• Market analysis - Research current market share, growth trends, competitive landscape, product mixes, etc.

• SWOT analysis - Evaluate internal strengths & weaknesses, external opportunities & threats.

• Benchmarking - Compare performance metrics vs. competitors or industry standards.

• Process mapping - Document current business processes and identify inefficiencies.

• Customer analysis - Gather feedback on satisfaction, needs, pain points, etc.

• Gap analysis surveys - Survey staff across the organization to uncover gaps.

• PEST analysis - Assess political, economic, social, and technological factors.

• Portfolio analysis - Review product lines and business units.

Using a combination of these diagnostic approaches will provide a comprehensive understanding of your current state. This establishes a baseline for mapping your future goals.

2. Define Your Future State

Once you have established your current state baseline, the next step is to define your ideal future state. Think 3-5 years out and consider:

• What is your long-term organizational vision?

• What goals do you want to achieve for growth?

• What is your desired brand positioning and reputation?

• How will you differentiate from competitors?

• What new skills, capabilities, and processes will be needed?

• How will technology and innovation shape your plans?

• What customer needs do you aim to meet?

• What new products/services will you offer?

• What level of financial performance do you want to reach?

Your future state should align with your overall business objectives and set a path for advancement. Make sure it is realistic yet ambitious enough to drive meaningful progress.

Best Practices for Defining Future State

Keep these best practices in mind when establishing your future vision:

• Involve key stakeholders - Get cross-functional input from leaders across departments.

• Assess feasibility - Ensure your goals are attainable given resource constraints.

• Research emerging trends - Consider how projected market shifts may impact plans.

• Prioritize ruthlessly - Focus on the most vital goals aligned to strategic priorities. 

• Set measurable targets - Quantify objectives so progress can be tracked.

• Build in flexibility - Allow room to evolve plans as circumstances change.

• Get leadership alignment - Make sure executives support the future roadmap.

Clearly defining your future state is critical to identifying the right gaps to close to advance your strategic growth.

3. Identify Gaps and Set Priorities

With your current and future state defined, you can now identify specific gaps across all areas of the business. Some key techniques for spotting gaps include:

• Process analysis - Map current processes against future desired processes to find inefficiencies.

• Benchmarking - Compare current performance metrics to industry standards or best practices.

• SWOT analysis - Assess internal strengths/weaknesses and external opportunities/threats.

• Customer analysis - Identify unmet customer needs by gathering feedback.

• Competitive analysis - Determine competitive gaps in your market position, product mix, pricing, etc.

• Financial analysis - Evaluate spending and investment gaps.

• Capabilities analysis - Assess current vs. needed organizational capabilities.

• Technology analysis - Examine how current solutions and tools map to future needs.

Outline every gap uncovered and prioritize based on impact, effort required, and available resources. Focus first on mission-critical strategic gaps rather than minor operational gaps.

Prioritization Methods

There are a few different ways to prioritize gaps:

• PEST analysis - Categorize gaps into Political, Economic, Social, Technological buckets. Address PEST factors appropriately.

• High/Medium/Low - Bucket gaps into high, medium, low priority groupings.

• Effort vs. Impact - Plot gaps on a matrix assessing effort vs. impact. Address high impact, low effort gaps first.

• Theme-based - Group related gaps into categories and create thematic priorities.

• Size of gap - Tackle the biggest deltas between current and future state first.

Apply the prioritization method most appropriate for your analysis. The key is identifying the gaps that will make the biggest difference in driving your strategic growth if addressed.

4. Develop an Action Plan to Bridge the Gaps

The last step is to develop a well-defined action plan to close the priority gaps identified. For each gap, your plan should outline:

• Specific activities and tasks required to address it

• Personnel responsible for executing each activity

• Timeline and milestones for completion

• Resources needed (budget, equipment, etc.)

• Performance metrics to measure progress

• Risks, constraints, dependencies

Having a detailed gap closure plan is critical for successful implementation. Make sure to get buy-in from stakeholders throughout the organization. Also build in regular reviews to track progress and make any necessary adjustments.

Keys to an Effective Gap Closure Plan

Elements for an effective gap closure plan include:

• Ownership - Assign individuals responsibility for specific actions.

• Measurable targets - Quantify desired outcomes and milestones for each activity.

• Resource allocation - Make sure sufficient budget, staff, tools are available.

• Oversight - Establish governance processes to oversee execution.

• Change management - Anticipate and address potential change resistance. 

• Regular reviews - Continuously monitor progress and refine as needed.

• Celebrate wins - Recognize and reward successful gap closure efforts.

Executing your gap analysis action plan will help bridge the gaps blocking your path to future growth and success. It transforms strategic insights into concrete initiatives to fuel improvement.

Real World Examples of Gap Analysis

To understand how gap analysis works in practice, here are two examples across different business contexts:

Business Growth Gap Analysis

• Current state: ABC Company has struggled with stagnant revenue and market share over the past 3 years. Existing products are dated compared to newer competitors. Brand awareness is declining among target demographics.

• Future state: In 3 years, ABC Company aims to increase revenue by 40% and market share by 10%. New products will be launched to attract younger buyers. Brand awareness will improve with refreshed messaging and social media campaigns.

• Gaps: Product line needs innovation, current technology and systems are inadequate, brand perception is weak, sales and marketing efforts are not aligned to growth goals.

• Action plan: Invest in R&D for new product development, upgrade to CRM and ERP systems to support growth, revamp brand platform and digital campaigns, expand sales team and optimize incentive structures.

Customer Experience Gap Analysis

• Current state: XYZ company has average customer satisfaction scores and retention. Call center resolution times are high. Website and mobile apps need UX upgrades. 

• Future state: XYZ aims to exceed industry CSAT benchmarks, improve retention by 15%, and lower call resolution times. Seamless omnichannel experiences will be delivered.

• Gaps: Poor CX across channels, high customer effort, lack of CRM data insights, inadequate staff training.

• Action plan: Implement voice of the customer program, overhaul web and mobile experiences, expand self-service options, train call center staff on new knowledge management system, integrate CRM insights across the organization.

IT Project Management Gap Analysis

• Current state: The IT department lacks standardized project management practices resulting in missed deadlines and cost overruns. No central system for tracking tasks and issues. Insufficient collaboration across IT teams.

• Future state: Implement PMO with documented project management practices based on PMI framework. Deploy project management software for centralized tracking. Increase cross-team collaboration.

• Gaps: Lack of PM skills, tools, and methodologies. Silos between teams. Missed delivery targets.

• Action plan: Develop PM training program, select and roll out project management software, map new PM processes, establish PM community of practice for idea sharing.

Tips for Conducting an Effective Gap Analysis

Keep these tips in mind to ensure you conduct a comprehensive gap analysis:

• Use multiple data sources - Leverage both quantitative metrics and qualitative inputs from staff and customers.

• Involve key stakeholders - Get participation across departments to cover all perspectives.

• Compare to benchmarks - Assess performance against industry standards and competitors.

• Focus on the end goal - Keep the long-term strategic vision in mind rather than just immediate gaps.

• Prioritize ruthlessly - Target only the most critical gaps with the biggest impact.

• Assign ownership - Give individuals responsibility for closing each gap.

• Set measurable targets - Quantify gap closure targets so progress is trackable.

• Reassess regularly - Review and refresh the analysis as business factors evolve.

• Communicate findings - Share results cross-functionally to drum up engagement.

Following these best practices will ensure your gap analysis yields actionable, high-impact insights.

Avoiding Common Gap Analysis Pitfalls

You can also optimize your gap analysis by steering clear of these common pitfalls:

• Not getting diverse input across the organization

• Letting the current state analysis rely too much on assumptions rather than facts

• Defining future state goals that are too vague or unrealistic

• focusing only on identifying gaps vs. outlining plans to close them

• Not assigning clear ownership for follow-through

• Failing to monitor and reassess gap closure progress over time

Avoiding these missteps will further enhance the quality and impact of your gap analysis efforts.

Gap Analysis Templates and Tools

To help conduct your analysis, here are some free templates and tools:

• Excel spreadsheet - Useful for capturing gaps across different business areas in a structured format.

• PowerPoint presentation - Summarize findings in a visual format for stakeholder reviews.

• Word document - Provides flexibility for creating a customized gap analysis.

• Online gap analysis generators - Sites like GapAnalysis.com let you answer guided questions to auto-generate a report.

• Project management software - Tools like Wrike, Asana, and Jira help you manage and track gap closure plans.

• Graphic design software - Programs like Visio are useful for mapping process flows and visualizing gaps.

Leverage these resources to streamline your analysis and easily communicate insights. Tailor them as needed to suit your specific business requirements.

Steps for Creating a Gap Analysis Template

Follow these steps to create your own reusable gap analysis template:

1. Define areas of assessment - Ex. Strategy, Operations, Technology, Marketing, etc.

2. Determine KPIs & metrics per area - Ex. Revenue growth, market share, conversion rates.

3. Outline columns for current vs. future state - Leave room to document gaps.

4. Include planning section - For detailing gap closure action plan.

5. Add visualizations if possible - Charts, graphs to illustrate gaps.

6. Format professionally - Make it easy to update and share.

Having a tailored gap analysis template makes it easier to conduct regular assessments as your business evolves.

Gap Analysis Process Models

In addition to a general four-step methodology, there are a few different process models that can provide helpful frameworks for a gap analysis:

Lewin's Change Management Model

Lewin's model outlines three stages:

1. Unfreeze - Prepare for change by highlighting need.

2. Change - Conduct analysis and implement changes.

3. Refreeze - Establish new processes and systems.

This model focuses on the organizational change management aspect of closing gaps.

McKinsey's 7S Model

The McKinsey 7S model looks at:

• Strategy

• Structure

• Systems

• Shared Values

• Style

• Staff

• Skills

Assessing gaps across these interconnected areas provides a holistic analysis.

Nadler-Tushman Congruence Model

This model examines:

• Inputs - Resources, capabilities, constraints.

• Outputs - Measured performance.

• Transformation process - How inputs are converted to outputs.

It focuses on aligning these elements to optimize performance.

Selecting the right process framework can enhance how you conduct different types of gap analysis focused on specific business areas.

Gap Analysis for Different Business Needs

The gap analysis process is very versatile and can be applied to many different business scenarios:

Strategic Planning Gap Analysis

• Goal - Identify gaps between current performance and strategic plan goals.

• Approach - Assess current state metrics vs. targets set in strategic plan. Examine required capabilities and processes needed to enable strategic objectives.

Sales Gap Analysis

• Goal - Pinpoint gaps in achieving sales targets.

• Approach - Evaluate sales process efficiency, competitor performance, customer insights, and metrics like conversion rates.

Marketing Gap Analysis

• Goal - Determine gaps in marketing capabilities and performance.

• Approach - Assess brand awareness, market share, campaign effectiveness, reach, messaging, etc.

Technology Gap Analysis

• Goal - Identify technology gaps and digital transformation needs.

• Approach - Audit existing systems and tools. Align to desired tech capabilities and roadmaps.

The gap analysis process can be customized as needed for different business functions. Focus your analysis on specific areas you want to improve.

Tying Gap Analysis to Strategic Planning

Gap analysis is an important element of the overall strategic planning process. It helps translate strategy into tangible objectives and action plans.

Steps to Integrate Gap Analysis into Strategic Planning:

1. Set long-term strategic vision and objectives.

2. Conduct gap analysis to identify gaps blocking strategic goals.

3. Prioritize gaps based on impact to strategy execution.

4. Develop gap closure plans aligned to strategic priorities. 

5. Assign owners and allocate resources to execute plans.

6. Monitor progress and refine gap closure plans as needed.

Integrating gap analysis this way ensures your strategic vision guides what gaps you choose to focus on closing. It enables data-driven strategic planning.

Gap Analysis Performance Metrics

Measuring gap analysis performance and effectiveness helps drive continuous improvement. Some metrics to track include:

• % of gaps successfully closed within target timeframe

• Number of new action plans generated from gap analysis

• Stakeholder satisfaction ratings with gap findings and action plans

• Cost savings or revenue growth achieved through gap closure efforts

• Milestone tracking for key initiatives spawned from gap analysis

• Resource utilization for executing gap-based projects

• Trends in identifying new vs. recurring gaps each cycle

  Tracking metrics like these over time provides insights into your gap analysis and strategic planning processes. The data can reveal opportunities to enhance your approach for even greater business impact.

Conclusion and Next Steps

Gap analysis provides unique insights that guide strategic objectives and growth plans. The examples and tips in this comprehensive guide equip you to conduct an effective analysis. Here are some final recommendations on how to bring your gap analysis to life:

• Review findings with executives and get their buy-in.

• Widely socialize results across the organization.

• Assign clear gap closure owners and accountability. 

• Allocate sufficient resources to support initiatives.

• Set regular checkpoints to track progress. 

• Refine plans as needed based on evolving internal and external factors.

• Celebrate successes along the way to maintain momentum.

Solid execution of your gap closure roadmap is key to bridging strategic gaps obstructing your goals. Use these techniques to conduct an insightful analysis, translate findings into action, and drive meaningful progress.