Everything You and Your Business Should Know About Critical Success Factors

The key to a successful business is hitting goals and working towards its overarching mission. However, setting goals and figuring out how you’re going to achieve them are two very different things.

The first step to achieving these goals is establishing the critical success factors of your project and business. Never heard of them? Don’t worry; we’re going to look at what critical success factors are, why critical success factors are important, and how to identify and develop critical success factors within your business.

Critical Success Factors

Critical success factors (CSFs) are the elements that are vital for the success of a company or organization. The concept behind CSFs emerged in the 1960s before being refined in the 70s and 80s by John F. Rockart into what we know today. Since then, they have become a staple across numerous industries.

While they are often tied to the overall success of a business, they can also be used for individual projects or goals.

Different Types of Critical Success Factors

Critical Success factors, as described by John F. Rockart, can be broken down into four main categories:

The Difference Between Critical Success Factors and Key Performance Indicators

Both Critical Success Factors and Key Performance Indicators are common concepts in the modern business world and are often mistaken for one another or even used interchangeably.

However, while they are both important for the success of a business, they have very different roles. The difference between CSFs and KPIs, in the simplest sense, is that Critical Success Factors refer to what will lead to success (the causes) based on a company’s goals and mission. At the same time, Key Performance Indicators are used to measure that success.

KPIs are the tools that a business can use to measure whether or not the critical success factors they have identified have led to a positive outcome for the business. Furthermore, CSFs can be very broad, while KPIs tend to be more granular and quantitative.

An example of how critical success factors and Key Performance Indicators differ but complement each other could be:

A company has a goal of increasing the operating profit of its manufacturing business by 5% in three years. To do this, they set out several CSFs and KPIs. 

Each of these KPIs would then have a specific and measurable target (say, a market share of 12%). 

The goal is increased operating profit, the CSFs are how you’ll reach that goal, and the KPIs are used to measure whether the CSFs are fulfilled and the overall goal reached.

Discover More:

How to Build a High Performing Team

Reasons Critical Success Factors are Important

As the name suggests, Critical Success Factors are critical to a business doing well, and this is due to several reasons.

Critical Success Factors Examples

As discussed, critical success factors are important at a company level but can also be applied to individual projects or departments. Whether working in sales, marketing, or project management, a few CSFs are vital for your work. Let’s take a look at some of the most common success factors examples.

Top Critical Success Factors in Project Management and Examples

There are many critical success factors in project management. Still, these are some of the top factors for most situations:

Top Critical Success Factors in Marketing and Examples

The critical success factors for any marketing project will depend on its goals and the targets and channels of specific campaigns. Brand awareness, for example, has different factors than increased sales, but both could be goals of a campaign.

That said, there are some more general examples to look at:

Top Critical Success Factors in Sales and Examples

What you’re selling, how you’re selling it, and who you’re selling to will all lead to different CSFs. They always need to be completely custom to your business, but there are a few sales CSFs to consider:

How to Identify and Develop Your CSFs

With these more general critical success factors in mind, it is really important that you develop clear CSFs based on your specific project. It is easier than it seems and can be achieved by following these steps:

It all Starts with Research

For starters, you need to research your company mission and strategy because this is what you’ll be basing your CSFs on. Next, you need to research the specific issues that could influence your project. A PEST Analysis will help establish the external factors, while a SWOT analysis can explore the internal factors.

Identify Your Objectives and Possible CSFs

The next step is to identify the goals of your project and reflect on what needs to happen to achieve those goals. The ideas you come up with at this stage will be candidates for your final critical success factors.

Prioritize Your CSFs

Just as you must prioritize your tasks in a day, you must also prioritize your CSFs. Go through the list of candidates you created during the previous step and identify those that are really vital. As you do so, you will likely be able to blend or merge many of the CSFs you have identified.

For example, “Low return rate” and “high-quality product” are strongly linked, and if you focus on the latter, the former is likely to improve without much attention.

Communicate to Relevant Stakeholders

The next step is communicating your critical success factors to the people that matter. Consider who is best positioned to achieve the goals, which team members need to know, who will be accountable, and if your company infrastructure is good enough to use these new CSFs.

Monitor and Measure

Finally, you need to establish how you will know that your CSFs are being achieved. This is where KPIs come in, and you will often need several to properly measure each CSF.

How Spike can Help you in Your Next Project

To maximize the benefits of your newly-implemented critical success factors, consider a project management platform to help monitor your progress, collaborate with team members, stay on top of tasks, and more.

Spike is a full productivity platform built into your inbox, meaning your team is able to get a clear overview of the project using Tasks and To-Do Lists, measure the progress of each task in real-time, and stay on top of individual, project and company goals.

What’s more, Spike offers advanced collaboration tools such as online Notes for real-time teamwork, as well as video and voice calls for when you need to align with colleagues to hit those KPIs and achieve your CSfs. For when chatting face-to-face isn’t needed, or even desirable, Spike has Conversational Email, which offers the power of traditional business email with the simplicity of instant messaging.

Hitting your goals and making your project or company succeed is hard work, but the first step to making it happen is establishing and understanding the Critical Success Factors that apply to your work.

Once you have these, you can collaborate with your team to achieve them, whether you’re looking to grow your agency, build the best product possible, or introduce your brand to the world.