Thursday, May 14, 2009

Gap Analysis and Integrative Thinking

Gap analysis is a framework enabling a management team to evaluation actual performance with its potential. At its core are two questions: "Where are we?" and "Where do we want to be?". In game theory, this manifests as potential non-zero sum gains and in economics manifests as working within the potential frontier curve (both describing inefficient processes).

Gap analysis is a logical step following common size analysis and other forms of bench marking. It helps identify the causes of performance shortfalls and areas for improvement.

Many managers who are familiar with ISO 9000 for quality management (which implements a Plan, Do, Check, Act (PDCA) framework) will notice it has many similar characteristics and goals to GAP analysis applied recursively.

Sometimes gaps are easy to quantify: Our competitors computer model has 20% more computing power. Other times it is not: Our brand equity is weak relative to comparable fashion designers.

Understanding the factors that produce these distances is the first step in bridging them. The initial steps of an integrative thinking framework also has similar characteristics in using Salience, Causality, Architecture and Resolution to move from problem to solution.

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