Critical Success Factors and Key Performance Indicators

Critical Success Factors ( CSFs )as the name suggest are those factors in which you must excel in order to outperform your rivals your competitors. But this is not as easy as one may think about it at first. It is a detailed process expanding over several stages, which we will be discussing in detail below. If an organization is not giving importance to success factors, then it would be very difficult to see its business as a going concern.

Critical Success factors may be customer satisfaction, market share, meal quality, number of donors and number of volunteers(not for profit organizations) and sales volume.

Critical Success Factors Methodology

1. After identifying the Critical Success Factors, an organization must identify a strategy for each and every Critical Success Factor. Lets suppose Customer satisfaction is our Critical factor, then a strategy could be the appointment of a designated manager to the client.

2. Identify Key Performance Indicators for each strategy. This will help to achieve success and will enable management to take appropriate steps if Key Performance Indicators show something going wrong like number of repeated orders from clients are declining or number of complaints are increasing.

Key Performance Indicators

Key Performance Indicators are categorized into Financial indicators, Quantitative indicators, Actionable indicators, Directional Indicators and Practical indicators. They should be explained in an easy and understandable language and should be linked directly to the target goals. If possible, there should be a mathematical model. Most mathematical models provide support to view the effect of one single change to one Key Performance Indicator on the Target Goal.

3. Revise Key Performance Indicators to ensure that nothing important measurement and evaluation factor got ignored. It is a continuous process. The idea here is that you have to work again and again to make things better. But do not go into unnecessary small issues because you will loose your main focus. Just focus on major and crucial indicators.

4. Communicate Critical Success Factors with everyone involved in key decision, so that congruence of objectives achieved. As we all know that without informing the key elements of the process will endanger the support and help from them. So, in order to get success and achieve the desired target goal, communication plays an important role.

5. Continuously review your Critical Success Factors to ensure that they are not outdated. This is itself a detailed process because you have to continuously monitor your own strategies, your competitor objectives, strategies and their future turn (off course, you are guessing their strategies).

Salman loves to read and write human resource, business and Business Finance Decisions related articles. He runs in partnership a Job Opportunities in Pakistan blog.

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