Let’s talk about critical success factors.
In business — heck, in just about every area of life — there are different things, people and ideas competing for our attention. It’s easy to get sidetracked, succumb to “shiny object syndrome,” and never achieve real success at anything.
This problem is magnified when attempting to grow a company.
- Should you invest in content marketing?
- Do you need to hire more sales personnel?
- Maybe the equipment in your warehouse is due for an upgrade?
We’re not sure what will best benefit your business.
All of the above suggestions could result in growth and higher value.
What are Critical Success Factors?
How about a quick history lesson?
What does the nugget of information mean for you in 2018? Not much… Other than the fact that critical success factors, also known as Key Results Areas (KRAs), have been around for a while and have a proven track record of helping businesses grow.
Critical success factors are the elements needed for an organization to achieve its mission.
It’s a management term that usually refers to specific activities — something an organization must do to achieve success — but never criteria.
Success criteria are outcomes, whereas critical success factors are the elements needed to make success a reality.
Use Critical Success Factors to Grow Your Business
So, you understand what critical success factors are. Good for you. But they won’t help you one bit unless you implement them in your business and daily workflow. Lucky for you, that’s what this section of the post is about.
1. Start With a Company Mission and Goals
Just about everything great begins with a goal.
So what’s your company’s goal? Or goals, having more than one is allowed and actually encouraged!
Do you want to become the most profitable vitamin store in town, selling hundreds of different supplements and winning a customer approval rating of 95% or higher?
Maybe you’re building a social media platform for people and their fur babies. Pet owners can log on and interact with other dog or cat lovers — all without ever going outside and breathing fresh air. Ew, gross!
Actually, that’s not a bad idea. Excuse us for a second as we go patent our zillion dollar idea… Okay, we’re back!
All jokes aside, your business needs to have goals. We recommend you organize them appropriately. Have one overarching goal, AKA your company’s mission. An example would be to become the number one furniture store in town.
Then have a few other, more specific goals that fall below that one. Goals such as to secure 30% local market share, attain a 98% customer satisfaction rate, and expand your product listing.
The critical success factors process always starts by listing the goals your company wants to achieve.
2. Brainstorm Possible Critical Success Factors
Got goals? Perfect, you’re ready for step two; the brainstorming phase. Basically, you now need to jot down every possible idea you can think of to reach your chosen goals. These are your critical success factor candidates.
For example, let’s say you hope to win 10% market share for your digital, niche leather goods, e-commerce store. A few potential critical success factors would be to “attract new customers,” and “offer a wider selection of products.”
Initiate this process for each goal you have and write down every idea you can think of. When your document is full of potential critical success factors, it’s time to narrow it down to the most essential. The ones that are truly vital to the success of your company.
We recommend you aim for three to five critical success factors. Any more than that and you’ll likely spread yourself too thin.
3. Communicate Your Critical Success Factors
Once your critical success factors have been identified, they then need to be communicated to your team. If you operate a one-man-band business — maybe you’re a freelance web designer — go ahead and skip this step.
We don’t even want to think about you mumbling your goals in the dark, completely alone, your profile lit by the faint glow of your computer screen. All in an attempt to follow our advice and “communicate”. Creepy!
But seriously, if you manage a team, they need to be aware of your company’s critical success factors AND how you plan to implement them. That way they can actually be a part of the solution and help you achieve success.
So host a company-wide meeting and bring everyone up to speed. Answer any questions that come up. The changes you’re proposing may seem drastic to some. Assure them that they are necessary.
4. Monitor and Re-Evaluate Your Choices
You identified your company goals and the critical success factors that will allow you to achieve them. You then communicated the factors to your team and have begun implementing the necessary changes.
Can you be done now? Not quite.
The next step is to monitor and re-evaluate your critical success factors.
- Did you make the right choices?
- Is your company moving in the right direction?
- Are your goals seeming more attainable with each passing day?
If not, it’s back to the drawing board.
Don’t feel bad, business is about constant adjustments. Sometimes you take a chance and things don’t work out. Other times processes or marketing techniques that worked for years suddenly fall flat. The key is constant learning and optimization.
Critical Success Factors In Action
We just outlined four steps you need to take to grow your company.
These steps really work. Don’t believe us? The following example illustrates the point. Though it’s totally fictional, it will allow you to see critical success factors in action. Observe:
Jenny Jams owns and operates a popular music lesson business in town. She and the other instructors she employees teach guitar, piano and drum lessons to over 100 students every week. But you know what? She’s hungry for more success!
Jenny read this blog and knows she must identify the critical success factors for her business in order to grow. First, she starts with her overarching mission and the specific goals that fall under it:
- Mission: Become the unquestioned, go-to business for music lessons in her town.
- Goal #1: Achieve 40% market share.
- Goal #2: Maintain a 98% student satisfaction rate.
- Goal #3: Expand her company’s lesson offerings.
Jenny then begins to brainstorm all the possible critical success factors she can think of. Finally, she decides on a few rockin’ options:
- CSF #1: Attract and satisfy new students.
- CSF #2: Hire a new teacher to teach violin lessons.
- CSF #3: Expand her property to include more lesson rooms.
Now that Jenny has her goals and critical success factors identified, she informs her team of her plans to dominate the music lesson game. After answering each and every question and alleviating all concerns, her employees are on board and excited for the future.
3 months later, Jenny re-evaluates her original critical success factors. Careful monitoring of each of them has provided her some enlightened feedback.
The marketing efforts that Jenny has employed have been largely successful. Her business has been able to attract new students and now teaches 125 lessons a week — a 25% increase.
To help handle the new customer boom, she’s elevated two of her part-time employees to full-time status.
She’s well on her way to achieving her desired market share, while still maintaining a high level of student satisfaction!
Unfortunately, her attempts to secure violin students has mostly fallen flat.
It turns out that interest in the instrument just isn’t very strong in her area. But bass lessons, on the other hand, are in demand. Jenny plans to pivot and offer bass guitar instructions instead of violin.
If this tactic works, she’ll undoubtedly reach her goals and achieve her mission. Keep rockin’ Jenny Jams!
Potential Critical Success Factors for Your Business
Every business is different. Which means every business will have different critical success factors it needs to identify and implement. But if you’re drawing a blank, here are a few ideas that may work for your company.
- To attract new customers.
- To maintain customer satisfaction.
- To secure funding for expansion.
- To build better relationships and industry contacts.
- To reduce costs, risk, or both.
- To increase productivity levels.
- To increase the vendor list.
- To grow company authority and thought leadership in its niche.
- To become more environmentally friendly.
- To reduce employee turnover.
Have these ideas sparked anything inside your brain? Great, now take these ideas and run with them. Mold them to fit your unique business and goals.
To the Success of Your Business
Want to accomplish your mission, achieve your goals, and meet with overwhelming success?
Then you need to identify the critical success factors that will help you get there.
It’s really not that difficult. Start with the mission and goals your company has. Then brainstorm every possible idea that could help you achieve them. Next, you need to narrow that list down to three to five best options. Finally, as you implement these factors, constantly monitor them and re-evaluate your approach.