How to use Gap Analysis for your next Quarter’s OKRs?

Dec 21, 2022
How to use Gap Analysis for your next Quarter’s OKRs?

OKRs and Gap Analysis are frameworks designed to help teams be more effective. They can be used in different ways, but they share a common goal: setting goals for individuals and teams.

What is Gap analysis?

Gap analysis is the process of assessing the differences between business processes, applications, databases, and other technology assets within an organization. It helps you identify opportunities for improvement in your current system and makes recommendations on how to improve efficiency by identifying gaps in investment.

Gap analysis typically involves 5 steps:

Step 1 – Define your organization’s current state.

  • What is the current state of your organization?
  • What strengths and weaknesses do you have as an organization?
  • What opportunities and threats do you face in the future, both internally (within) and externally (from other organizations)?
  • How are these factors affecting your goals, key performance indicators (KPI), strategies or plans for achieving them in any given year/period? 

Step 2 – Define your organization’s target state. This is a good time to look at your current problems and how you want them to change in the future. Consider these questions:

  • What are our current challenges?
  • How do we measure success? What do we want our customers and employees to know about us? How can we show that we’re doing well for them (and ourselves)?
  • When looking at this question, don’t just think about what needs to be fixed—think about where things could go if everything stayed as it was today.

Step 3 – Identify the gaps between the current state and desired state.

Gap analysis is a process of identifying the difference between two things. This could be between performance and quality or other factors such as cost or time to market.

You must understand the difference between your current state and your desired state to identify gaps and make improvements.

Step 4 – Determine how to close the gaps.

This step is where you should identify the gaps between the current state and desired state and then determine how to close them. For example, deficiencies in your team’s skill sets may prevent them from meeting their goals as quickly as possible. You can use this information to create a plan of action for closing those gaps by prioritizing which areas need improvement first (and why), then creating plans for making improvements over time so that they become habits rather than exceptions or emergency measures.

Step 5 –  Create a plan of action.

This step is about taking the information you’ve learned and using it. You need to define your problem before starting on a solution so that when the time comes to create goals and strategies, those will be clear and measurable. 

Types of Gap Analysis

There are different types of gap analysis, differentiated according to different criteria. 

Gap Between Current State and Desired State

Gap analysis is a process that helps you identify where your business or organization stands with its desired state and then use this information to develop action plans.

The first example of gap analysis involves identifying the gap between the current state and future goal:

  • Current State – Example 1 (Business): We currently have four employees, but we’re looking to grow by 20% over the next year. The goal would be for us to hire 30 more people over the next 12 months.
  • Future Goal – Example 2 (Business): By 2020, our goal is to gross $100 million in revenue and have 300 employees working at our headquarters in the San Francisco Bay area of California.

Gap Between Current State and Actual State

The gap between the current and actual state is the difference between what you have now and what you have. 

The gap between resources available and required resources

The gap between the resource requirements and their availability is called a resource shortage. To solve this problem, you need to find the available resources you can use for your project. You may also have to buy some new equipment or hire new employees if none of your current ones can do the job for you anymore (for example, if all workers quit due to lack of work). You must then evaluate whether these additional expenses will be worth investing in them before deciding whether or not they are necessary for solving your problem at hand

Gap Between Targeted Skill set & Available Employee Skill set

You can use the skill set you selected for your new hire to determine their target skill set. For example, if you were hiring a software engineer who needs to be able to work with Ruby on Rails and Python, but doesn’t want to be an expert in any specific language or framework, then they would have an available employee skill set of “Ruby on Rails” and “Python”.

If we assume that all potential employees are required by law or contract to have at least some knowledge of these languages/frameworks (or other similar ones), then this would represent a gap between their targeted skill set and available employee skill set:

  • Targeted Skill set – Ruby on Rails & Python
  • Available Employee Skill sets – Some understanding of Ruby on Rails & Some understanding of Python

How Gap Analysis can be helpful in OKRs

Gap analysis is a way to measure progress toward your OKRs. It helps you get feedback from the business on what’s working and what isn’t so that you can adjust your strategy accordingly. The goal of gap analysis is to identify where you are now and the changes you need to make to achieve your desired outcomes.

Gap analysis can help you set your OKRs by identifying what needs improvement, which allows you to plan accordingly. Gap analysis is a plan for achieving goals. It helps your team set its most ambitious OKRs, and it can also be used to measure how well you are doing on your OKRs

How to use Gap Analysis for your next OKRs

Applying the steps of gap analysis to your OKR strategy is simple. 

To perform a gap analysis, you need to gather three things:

  • A list of goals for your OKRs.
  • The resources you have available for achieving your OKRs.
  • The resources that will be required to achieve the OKRs in question.

Use this information combined with the steps of how to do a gap analysis listed above to review your OKRs.

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