Unlocking Excellence: The Power of Gap Analysis in Product Management
As a product manager, continuous improvement is the driving force behind success. To excel, you must be able to examine processes, identify inefficiencies, and devise strategies to bridge gaps. One potent tool that aids in this pursuit of excellence is the gap analysis. This strategic planning technique enables you to take a step back, understand your current situation, envision where you want to be, and strategize on the best path to get there.
What is a Gap Analysis?
A gap analysis is a comprehensive assessment that helps organizations identify discrepancies between their current performance and their desired or potential performance. This tool is commonly used across various domains, including project management, product development, process improvement, human resource management, and strategic planning. In its simplest form, a gap analysis assesses:
- Where you are (current state)
- Where you want to be (desired state)
- The gap between these two states
Types of Gap Analysis
A gap analysis can be a versatile tool with applicability in a variety of domains within an organization. Depending on the context, it can be customized to evaluate different aspects of performance, processes, or strategy. Some common types of gap analysis include:
- Process Gap Analysis: Maps how various processes should and currently look like, identifying gaps to optimize the delivery process.
- Skills Gap Analysis: Excellent for employee development planning, comparing desired skills with current skills to plan a career path.
- Product Gap Analysis: Rarely used, but effective in planning product development by comparing the current state of the product with a product vision or competitive alternatives.
- Financial Gap Analysis: Provides a clearer picture of financial performance, showcasing areas of underperformance.
Conducting a Gap Analysis: A 5-Step Guide
To conduct a gap analysis, follow these five core elements:
- Identify Key Areas: Start by identifying key areas you want to investigate and improve on. Begin with 5-10 potential areas to avoid tunnel vision or overwhelm.
- Define Your Desired State: Envision an ideal state, either by being realistic about the next year or two or by imagining a perfect, ideal state, ignoring constraints.
- Determine Your Current State: Assess the area’s current state, being brutally honest with yourself.
- Identify Gaps: Identify the difference between the ideal and current state, quantitatively or qualitatively.
- Plan Actions to Close Gaps: Ideate potential improvements to close the gap, prioritize the most promising solutions, and implement them.
Gap Analysis Template
To streamline your gap analysis process, use a template that consists of eight elements:
- Area: The high-level theme you want to focus on.
- KPI: The best way to measure the health of the area.
- Desired State: The ideal state, either quantitatively or qualitatively.
- Current State: The current state, either quantitatively or qualitatively.
- Gap: The difference between the ideal and current state.
- Priority: Identify which areas need the most improvement.
- Key Actions: Identify key actions to close the gap.
- Owners: Assign accountable owners for improving each area.
Unlocking the Power of Gap Analysis
Gap analysis can help you improve by identifying the differences between the ideal and actual state of various areas. By planning specific actions to close the gaps over time, you can use this exercise as a long-term process improvement, a single retrospective exercise, or a strategic product document. As a product manager, you can use gap analysis for working with team members on their growth plans, comparing key competitors, and improving team dynamics and delivery. Remember to start broad and get more specific over time.