What Are Critical Success Factors for a business and Why you need them?
What are Critical Success Factors for a business? Whether you have just started a small business, have been running an enterprise business for the past 10 years, or are just thinking about starting a business, you should consider Critical Success Factors (CSF).
Critical Success Factors for a Business is defined as “the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.
There are many moving parts to any size of a business, some of the moving parts are essential for the business to continue to function. For example, let’s say you are running an e-commerce company that sells shoes. Inside your company, you have a marketing team, accounting team, operating team, and a manufacturing team that you outsource. For instance, let’s take the following questions into consideration.
Issues to consider when striving to identify CSFs includes:
What variables or factors are likely to impact our desired outcome?
Some of the factors that might impact the desired outcome of our e-commerce business are if the customers are not getting their orders on time or worse they are not getting their orders at all. This would fall on my operation team to make sure that we had everything in place to assure that the shoes get the ship as soon as possible after the customer orders. For my marketing team, a variable that could have a huge impact is making sure to stay inside the brand. We don’t want people to get confused about who we are as a company. This confusion could lead to dropping in brand awareness and ultimately a drop in sales.
Are we able to perform statistical analysis based on past data?
○ For accounting, you could look at past years and months sales to see if you are on tracking or doing better/worse than last year.
○ Operations you could look at data of misdelivered packages or customer complaints.
○ For marketing, you could look at digital marketing data from past years.
What changes in behavior must occur to create the desired outcomes?
This often can be the hardest part, to identify what exactly needs to change. There could be many factors that need to change or just one. Sometimes you won’t exactly know the outcome of the change until you try it.
What conditions must exist or change to create the desired outcomes?
Again this part can also be difficult to identify. The conditions for each business could vary based on location, industry, and other factors. Some of the conditions that will exist for our e-commerce shoe story to be successful in making sure that there is enough search traffic for the products we have to sell.
What skills do we need to add or acquire to achieve success?
The world is always changing and adapting, so your business should be too. It is important to be looking to add new skills to your business to compete. This can happen by either hiring new roles and people or by somehow training the people you already have.
What tools must we add or master to allow us to achieve our goals?
With today’s technology, there are countless numbers of software that most likely can be a tool to help solve your problem. However this doesn’t mean that the tool always has to be software, it could be new machines, templates, programs, etc. Just anything that you can use to help achieve your goals.
Now that you have some overview of critical success factors it’s time to get to work and identify the factors that are critical to your business using this free template.
By: Corbin White
Check out other ways to become successful with the 7s Model: Evaluate Your Business Strategic Plan. Check that blog out here.