Every business - and every manager in that business - should know what are the critical success factors … what must the company do - and do well - if they are to be successful. What are the factors that underpin the mission.
The aim is not to identify lots of these - but the essential (‘critical’) ones.
One probably relates in some way to customer satisfaction or service; another (especially in smaller businesses) might relate to the control of work-in-progress and/or cashflow.
Once these are identified, the business should identify some measure that will tell them how well (or badly) they are doing in relation to each CSF. These are the organisation’s key performance indicators (KPIs) - and there should be at least one that relates to each CSF.
Finally, they need to identify actions that will make those indicators move in the right direction, showing progress is being made in relation to the CSFs and towards the mission.
We like to think of a form of ‘golden thread’ that runs through everything the organisation does - from establishing the mission, to identifying CSFs, to identifying appropriate KPIs - and establishing a set of action plans.
The concept is very simple; execution is harder - but failing to create the golden thread means some important factor may be overlooked.
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