There’s no right way to conduct a gap analysis.
At its core, a gap analysis assesses where a company is today, where it wants to be in the future, and what’s missing to bridge the gap. For such straightforward questions, there are thousands of reasons a gap analysis may be necessary and dozens of ways you can undertake one.
Business theory, organizational theory, and even psychology have played a part in developing gap analysis methodologies. But gap analysis tools are what will help turn the theory into actionable plans to close the gaps and achieve business success.
Here are seven gap analysis tools and models that companies are using today and tips on how you can apply them to boost performance.
SWOT analysis is one of the most popular and famous tools for business planning, dating back to the 1960s when it got its start at the Stanford Research Institute. SWOT analysis examines four different aspects of an organization, process, or project: strengths, weaknesses, opportunities, and threats.
SWOT analysis is effective because it has a simple structure. A four-quadrant grid formation, it’s essentially a comparison chart, looking at the positives and negatives of the subject under examination.
The insights you gain from a SWOT analysis, however, are anything but simple. The first two components — strengths and weaknesses — look inward at the company. What are the company’s values? What’s the value proposition of the product?
The second set — threats and opportunities — turn outward to the competitive landscape. Where do the competitors stand? What are the outside forces (i.e., changing consumer habits, regulations, the state of the economy) that affect the business?
A SWOT analysis provides managers with a realistic examination of the current situation. This clear visual tool helps them make better strategic decisions about how to get where they want to go.
When a project is complex, multifaceted, and heavily time dependent, many larger organizations turn to the PERT — Program Evaluation and Review Technique. The PERT concept, which the United States Navy developed in the late 1950s, examines the predicted time it will take to complete a project based on three forecasts: optimistic, most likely, and pessimistic. It relies on statistics to plan the timeline of a project and assign estimations of how long the project will take in each of these scenarios.
The PERT technique is based on two types of milestones: activities and events. Activities are the work that an organization needs to do in order to complete a task. An event is the completion of a task that enables the organization to move to the next stage of the project. Managers estimate the time needed for each activity and event and compare it to the “critical path,” which is the longest time it could take to arrive at the goal.
By comparing the various scenarios to the critical path estimation, managers can arrive at the optimal predicted scenario for time management.
Although it may sound complicated, you can easily create PERT charts with the help of software like Microsoft Visio.
Nadler-Tushman congruence model
There are lots of ways to analyze performance gaps. While the PERT analysis looks at schedules and timing, the Nadler-Tushnman tool takes a broader look at how different elements of an organization come together to affect outcomes.
More specifically, the Nadler-Tushman Congruence model — named after two organizational theorists who developed it in the 1980s — examines four aspects of an organization that transform inputs to outputs: work, culture, structure, and people.
A deep study of each of these elements helps managers understand how their organization is functioning and how the parts interact with each other — in other words, the “congruence” of all parts working together that make up the organizational flow.
For example, you may have the right people working on a project; however, if the structure of the team doesn’t support efficient operations, the project will suffer.
Once you’ve examined in depth how the four elements interact, you can pinpoint deficiencies and develop an action plan to remedy them. The power of this gap analysis tool is the way it predicts how changes in one specific area — such as culture or structure — can impact other areas of the company.
If you’re looking for a gap analysis tool to help specifically with product design or quality control, the fishbone diagram could be right for you. Japanese organizational theorist Kaoru Ishikawa developed it as a causal diagram — that is, he designed it to show where factors in a process can cause problems, or faults, later.
Depending on the gap analysis goal, a fishbone diagram can include different types of factors. For example, in manufacturing processes, the analysis considers the 5Ms (mindpower, machine, material, measurement, and method), while for product marketing, it’s the 8Ps (product, price, place, promotion, people, process, physical evidence, and performance).
Each of these forms a separate branch of the fishbone diagram, providing an overall visual experience that can communicate complex gaps in a simplified way.
And the reason for the name “fishbone” diagram? The diagram itself looks like a fish skeleton. The most famous user of the fishbone diagram is carmaker Mazda Motors, which used the tool to help perfect the design of its Miata, or MX5, vehicle.
McKinsey 7-S model
True to its name, the McKinsey 7-S model takes on seven elements that must be aligned for an organization to succeed. Two McKinsey consultants developed it in the 1970s as a tool to help organizations manage change and achieve goals. What’s interesting about the method is how it positions the seven S’s when considering an organization’s performance.
The tool divides the seven S’s into the hard elements that are set and easy to define, such as structure, strategy, and systems, and soft elements that are more fluid and gray, including skills, style, staff, and shared values.
The model places shared values at the center, with the other elements surrounding it. This shows how much importance the McKinsey model places on the impact of values on every other aspect of a company’s functioning.
The McKinsey 7-S is a great tool for gap analysis, as a company can use it to plot where the organization stands in terms of each of the individual seven S’s today and where it wants to be for each element in the future. Comparing these two charts, it’s easy to pinpoint the core details that need to change in order to reach the level of harmony that can help achieve business goals.
Burke-Litwin Change model
Like several gap analysis tools, the Burke-Litwin model came on the scene in the 1960s, when business management was entering into more sophisticated territory. This model tackles the issue of change management, identifying 12 elements that influence an organization:
- External environment
- Mission and strategy
- Organizational culture
- Management practices
- Work climate
- Individual needs and values
- Performance (both individual and organizational)
Each of these is a critical driver of organizational change, and together they form a flowchart model showing how they interact and contribute to the change process.
Due to the large number of elements the Burke-Litwin model tackles, most regard it as one of the more complex gap analysis tools, and larger organizations facing broad change use it most often. Even so, the model itself covers all the elements of a business, no matter the size. Even smaller companies can use the framework of the Burke-Litwin model as the basis for a gap analysis.
Tables, charts, and spreadsheets
Gap analysis doesn’t require a specific theoretical model to be effective. Even a spreadsheet, chart, or table is a great gap analysis tool, which means you don’t need complicated software or methodology.
Gap analysis involves organizing information in a way that allows for proper analysis and comparison. For this reason, gap analysis tools are visually oriented, such as the SWOT grid or fishbone diagram.
You can create a visual gap analysis for any type of assessment using basic layout and design skills. For example, you can create a gap analysis that’s numbers oriented, such as a financial gap analysis, with Excel or Google Sheets.
You can create a table in PowerPoint or Word to map out different areas of the analysis and compare them. Or you can use one of the numerous gap analysis templates online as a starting point. The possibilities are endless and don’t have to break the bank.
Tools to fill the gaps
Gap analysis is a broad concept. Organizations can use it to assess a discrete problem — say, improving a recruitment questionnaire — or for a large, complicated challenge — such as reorganizing the entire HR department.
Whatever the goal of a gap analysis, there’s a tool that will help do the job. What’s more, if existing gap analysis tools aren’t quite right for your needs, you can create your own with a simple spreadsheet or table. When it comes to gap analysis, there’s no limit to the tools that can help you succeed.