how to do gap analysis

The Enigma of the Gap Analysis

What if I told you that, in reality, there was no gap between supply and demand? That even though we can forecast a gap between supply and demand, it never comes true.

The key concept is that gaps exist only in the future and never in the present. As soon as we reach the point of execution, the gap is immediately closed.

This may seem counterintuitive: how does the gap close and, if it always closes, why plan to close the gap?

Let me explain, as much of this relates to Parkinson’s law that ‘work expands so as to fill the time available for its completion’1.

Introducing Sally

Sally is a manager in a large company, she has worked there for nearly ten years and has been a manager for nearly three of those. She’s contracted to work a 40-hour week, eight hours per day. On a typical Tuesday morning, where she attends the weekly staff meeting with her peers, her boss reveals that there is a new strategy from the sales team and that Sally needs to produce a report by the end of the week to assess the impact so that her boss can raise it with unit director.

Sally leaves the meeting and looks at her calendar and to-do list. A short-notice task, a mountain of work and a busy diary – sound familiar?

How can Sally possibly fit it all in?

Sally’s first thought is that if she works late, more than her contracted hours, then she can get the work done. By doing so, she would be providing additional supply (for free). But Sally does that every week and she’s tired of it.

The Eisenhower Matrix

The Eisenhower matrix was developed based on a statement attributed to President Dwight D Eisenhower that ‘the things that are urgent are seldom important and the things that are important are seldom urgent.’2

eisenhower matrix

The report on the impact of the new sales strategy is both important and urgent, so Sally must do that.

Sally looks at the rest of her workload for the week, there is work she has that is also urgent, but less important. So, Sally delegates that demand to one of the team. Though this looks simple on the matrix, her team are equally time poor and have nowhere to delegate work further.

Now both Sally (as she still needs to free up more time for the report) and Sally’s team (as they’re picking up some delegated tasks) are looking at the less urgent tasks.

There is work that is important, but not urgent, which Sally (and her team) will delay. However, that just moves the demand from this week to next week, which compounds the problem of the busy schedule.

The final option, for those that are neither urgent nor important, is to drop the activity. So, Sally looks at a couple of meetings and figures she’ll decline those. Maybe Sally is lucky and her absence from that meeting creates no adverse impact. If she’s less fortunate, the organiser notices her absence and reschedules the meeting to next week, again, compounding her problem of being time poor.

Be more productive

Alternatively, Sally looks at some of her tasks and chooses to spend just five minutes on reviewing a proposal that she’d planned to spend half an hour to complete. This may produce a perfect result, in which case the delta of twenty-five minutes would simply be demand that produced no additional value; a productivity issue. Alternatively, that choice of spending five minutes may be insufficient to create the necessary outcome and result in drift, outcomes that take longer, and waste, where we fail to produce the intended outcome.

The disappearing gap

In all instances, a supply or demand solution is found. On the supply side, spare capacity is utilised or the workforce is reallocated at the opportunity cost of an alternative source of demand. On the demand-side, it can move to a later point in time, potentially generating additional demand as a result. Alternatively, the demand forecast is requalified as necessitating a lower level of derived demand. Finally, the demand may simply be cancelled and the result is a missing output, which may either generate additional demand or result in a failure to generate a successful outcome.

Though a gap between supply and demand was forecast at the beginning of the week, at the end of the week Sally has handed in the report and all looks fine. This is what business leaders experience on a routine basis and is a major reason why gap analyses are difficult to present. Is the gap analysis simply fraud?

The truth

It’s only in the future where the problems arise. The member of Sally’s team who, having worked late again on another delegated task, has now called in sick. Sally’s absence from the meeting means that key information was not passed on, resulting in an issue that will require a lot of work. The proposal that Sally skimmed over was not at sufficient quality and isn’t approved, wasting the effort of her team and missing out on a key objective.

The key to gaining consensus on a gap analysis is to focus less on the forecasted gap, but on bringing to life the reality of the problems they will face because of the gap that has been forecasted. Alternatively, reframe it in a way they will recognise: how many problems are they dealing with right now because of something that could have been fixed a week, a month or a year ago?

References

  1. Parkinson, C N (1955) Parkinson's law, The Economist, 19 November.
  2. Fuller, M G (1954) Making Maximum Use of L.O.M.A. Facilities, Proceedings of the Annual Conference of Life Office Management Association, LOMA, Fort Wayne, Indiana
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