Critical Success Factors in Business
What is a critical success factors (CSFs)?
The critical success factors (CSFs) are those things that if removed or not done would inhibit the success of the organisation’s achievement of the vision. The CSFs are generally fairly generic and are measured with high-level key performance indicators.
Examples of Critical Success Factors
“To attract and develop and retain world-class talent”
“To identify, attract, satisfy and retain a sound customer base”
“To partner with world-class players”
“To achieve financial targets and manage working capital”
They should cover the main business principles of marketing, human resources, finance and process. These aspects are often referred to as the balanced scorecard. However, critical success factors are not limited to just these four aspects. Some organisations extend these to other aspects namely: Growth, image, partnerships, environmental impact, social responsibility etc.
Hard business strategies flow from these CSFs. When establishing these, they should support the vision and link directly to what is required to achieve it.
The larger the organisation and the more people involved in the establishing of the critical success factors, the more complex it becomes and the longer the process. Many small organisations are able to create their critical success factors in a few hours.
As strategy will flow from these, the bigger the change required to achieve the vision the more complex the critical success factors can become as they reflect what needs to be done to achieve the vision.
Most organization have between seven and eight critical success factors as mentioned above.
As mentioned the critical success factors support the vision and the organization values also need to be understood. Thus the vision, values and critical success factors guide the business and are not changed over time. The strategies and measures might change, but these three aspects are like high-level guiding principles.
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