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How to determine and write critical success factors



In our previous discussion, I highlighted that a critical success factor (CSF) is that activity in an organisation which is very key to its success or that is key to achieving its strategic goals. CSFs may change over time due to changes in the environment, industry or competitive position of the organisation. They include product quality, employee attitudes, skills, manufacturing flexibility, brand awareness, processes, cash flow, innovation and product development.

In order to be effective, a critical success factor must be vital to the organisation’s success, benefit the company or department as a whole, be linked to a high-level goal and therefore linked directly to the business strategy so that the achievement of a CSF results in meeting strategic goals.

The process of identifying CSFs requires that a firm comes up with the organisation’s vision, mission statement, and high level goals and then develop detailed goals and their key success factors. The key success factors or CSFs are the areas that need attention for the organisation to achieve its mission and objectives. Determining the CSFs requires the involvement of all departments.

There are four basic types of CSFs namely:
Industry CSF’s which result from specific industry characteristics, eg, location in the retail industry will be a CSF for that industry;
Strategy CSFs which are a result of the chosen competitive strategy of the business whether its differentiation strategy or cost leadership or any other strategy that an organisation chooses, eg, product development would be the CSF for differentiation strategy;

Environmental CSF’s resulting from economic or technological changes, for instance, because of certain developments in the environment there could be issues of privatisation which should be adopted to be successful;
And temporal CSF’s resulting from internal organisational needs and changes. These CSFs are usually short-term in nature.
Each industry has its own unique industry-specific CSFs but companies in each industry might not have identical CSFs. You need therefore to identify what will give you competitive advantage over competition; what is it that is central to the future of the organisation and to the achievement of that future.

Each CSF should be measurable, observable and associated with a target goal. A good CSF should begin with a verb characterising action, for instance: attract customers, expand or increase market share through current customers or through acquisition of new customers, or monitor quality customer service to ensure provision of excellent customer service.

Some of the major CSF’s can be categorised into these key areas.
People – availability, skills and attitude, training and development
Resources – people, equipment, raw materials
Innovation – ideas and development
Marketing – supplier relationship, customer satisfaction and customer retention,
Operations – continuous improvement, communication to improve quality,
Finance- cash flow, available investment

Identifying the right CSFs will give you that competitive edge over the competition. Competition is good and necessary but you need to weather it by doing things differently. Business leaders should not cringe when they hear the word competition or try killing the competition by buying it out or taking certain legal action to make sure that they will never survive.

But in reality, competition is both good for your business and for the consumer because it sharpens the way you produce your product, provide service or retain customers. When you were starting your business you might have thought to yourself that it would be easier doing business without competitors.

But what one fails to understand is that if competitors don’t want to get onto your type of business it means you are destined to fail in that business because there is no “honey” to speak of. Competition is either direct or indirect. But having competitors is healthy. It’s actually good for your business. You need to embrace competition and see it from a positive perspective. You need to learn from the enemy.

There is a tactic in the book, Art of War, which says “Keep your friends close and your enemies closer.”  Your competition can teach you the biggest lessons and you begin to identify your CSFs and you also develop the competences to ensure that you remain above the competition.
To ensure success in achieving your CSFs, you need executive support.

The Executive team should appoint a champion to monitor and track progress in achieving the CSFs. All users should be involved in drawing up the key success factors because this will ensure ownership. The goals to which the CSFs relate to should be very clear so that it’s easy to establish the link between the goal and the CSF that ensures achievement of the goal. There should be a way to track and measure the achievement of the CSF.
CSFs help a business to focus their attention on activities that ensure success of the organisation by focusing on building capabilities to meet the CSF’s and hence the vision, mission and goals.

Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy, advanced performance management and entrepreneurship. For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts:, call on +266 58881062 or WhatsApp +266 62110062.

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