I remember, when I joined a small team to turn around a bankrupt company with a historical significant sales revenue and huge number of workforces. We did not apply any specific tool or depend on too much of excel sheets. However, did a thorough gap analysis to understand the current state of business and where we want to be and we all wanted know with child-like curiosity how soon we can make the balance sheet green.
In my perspective Business Gap Analysis is a structured method to lead the actions for business results. It’s all about moving from current stage/state to desired stage/state. I would prefer a different approach if it’s a new business and if its existing one.
If an existing business is going through stress, below steps simplistically (actually its very detail oriented and calls for hard work and discipline) brought a fantastic result.
Though I am writing sequentially, each point equally needs to be focused upon followed by simultaneous actions.
- Financial Performance: Look into balance sheet, P $ L for last five years. Look at the best, worst and current numbers. Look into debts and its cost to company. Just do this and do not project anything yet. (we will cover it later)
2. Sales Performance: Look into historical sales or potential of sales determining market size, product optimization, competition, pricing, customer engagement. Understanding current sales situation and where one wants to be is key driver.
3. Product/ Service: Analyze as an outsider, putting oneself in customer’s shoes. This will assist in fine tuning continued product or service development.
4. Operational efficiency: Understand linking with quality.
5. People Competency: Apply quick 360-degree approach without connecting to reward or promotion. Look into employee’s future potential over their “NOW’. This will help to reorganize team and do further leadership development.
6. Cost of Goods: Understand scope of optimization.
7. Cultivate conducive working environment: Happier the environment, better it is.
I shared above seven steps that can help to project the financial numbers. However, making an organization customer centric and nurturing a work environment which is happy and energetic is key for turn around.
Regardless the business nature or size, I believe such methodology will do wonder.
If you will be interested more , a small video how one can transform an average company to excellent company. https://www.youtube.com/watch?v=1Ycucbz6vco