Saturday, April 25, 2009

Applied Strategic Planning

Goodstein, Leonard D., Timothy M. Nolan, and J. W. Pfeiffer. Applied Strategic Planning: how to develop a plan that really works. New York: McGraw-Hill, 1993. Ch.11.

Much of this chapter is dedicated to addressing the results of a gap analysis. This summary will primarily focus on the information relevant to the process of conducting a gap analysis, and any associated advantages or pitfalls.

Goodstein calls gap analysis the "moment of truth" for a strategic planning team. This analysis provides the team with the opportunity to identify specific gaps that exist between the organization's current status and the "performance required for the successful realization of its strategic business model." The organization's current status and level of performance is the product of an internal performance audit.

Probably the most important product of a gap analysis is the estimate of the size of the gap and whether or not the strategies and tools at hand are enough to reduce the size of the gap. Every effort must be taken to close each perceived gap, and the team's responsibility is to reevaluate the desired future, business model, and solutions until all gaps are closed. This may require the team to repeat the process several times, or even revisit the mission statement or business model periodically.

There are two basic approaches to reducing gaps:
  1. Transactional Solution: Requires a modification or reduction of goals
  2. Transformation Solution: Requires a reduction of the obstacles causing the gap
The authors offer some words of caution to the strategic planning team. They recommend a strong consultant in the gap analysis phase to reduce the chances of the team falling into a group think frame of mind. Additionally, it is important to ask whether or not it is realistic to assume that a particular gap even has the potential be closed. Identifying a gap in one area can result in the realization of other gaps in different areas. The team must also assess the feasibility of change when assessing the scope and nature of existing gaps.

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