6 Top Critical Key Success Factors In Any Business
The critical success factors must and need to be found through an in-depth study of the company's objectives, deriving from its mission, vision, and values.
The critical success factors are central points of a business. When correctly identified and executed, they ensure the company's profitability and growth. On the other hand, when not worked on, the enterprise risks compromising its functioning.
There are several critical factors, varying from business to business. However, some are common in many organizations, such as knowledge of the market, location, available equipment, skilled labor, financial management, etc.
What are critical success factors?
Its concept is based on the points that, when identified and executed with mastery and attention, guarantee the development, the achievement of objectives, and the growth of a company.
For such factors to be recognized, the organization needs to study its processes, mission, vision, and values in depth. In this way, the manager can implement better process control, identify the value perceived by the customer, formulate strategies, and distinguish its stakeholders, among other points. All of this guarantees the company the maintenance of customer satisfaction, brand credibility, competitive advantage, and overall business success.
Therefore, it is understood that critical success factors are the critical points that, when performed efficiently, can define and guarantee the development and growth of a company and its business, which can achieve its goals. On the other hand, when these same factors are neglected or ignored, it contributes significantly to the organization's failure.
The critical success factors must and need to be found through an in-depth study of the company's objectives, deriving from its mission, vision, and values, which become mandatory and fundamental references for the company to survive, be competitive and have success whatever the segment.
They vary by business area and are different from company to company. And why are they useful? Identifying critical success factors allows the entrepreneur to identify management priorities, which are essential for the company's strategic planning.
In addition, critical success factors also help managers define the main guidelines for implementing process control and IT governance in daily life and the administration model of companies.
Examples of critical success factors
Some generic examples of critical success factors for a company are:
Is my product logistics running effectively?
Actions and strategies to improve the image before society;
High level of financial resources;
Fast customer service;
A good relationship with suppliers;
Adequate distribution and logistics channels;
How do we attract more customers?
How is the market in which my business is inserted?
How is my cost control being done?
How can I achieve a competitive advantage over my competitors?
How can I innovate the portfolio of products and services?
How can I better relate to my suppliers? What requirements should they have to take my product or service to excellence?
How can I improve my product's marketing and promotional campaigns?
Knowledge about the market and niche of activity;
Control and containment of expenses;
Development of employee skills;
Assertive marketing strategies;
Excellence in project management;
Expertise in promotional campaigns.
Expertise in cost control;
Expertise in distribution and logistics channels;
Image with stakeholders;
Infrastructure, machinery, and equipment suitable for the activities carried out;
Line of quality products/services;
Privileged geographic location;
Is my business in a good location?
Why should the customer choose my product and not the competition?
What processes can lead to better management of my business?
What equipment is available to my business?
What are the steps for my business to achieve financial security and independence?
What are the points where customer service should improve?
What is my company's image with stakeholders?
What is the competitive advantage of my product or service that can make my company successful?
Relationship with suppliers;
The reputation of financial strength;
Reputation and credibility with stakeholders and many others.
They are just suggestions with factors that can be mapped within the business environment. Everything will depend on the branch of each business, even because the critical factors are not fixed concepts, but variables, which can lead your company to a successful position. Another possibility is to analyze the Critical Success Factors according to the classification proposed by Rockart, which says:
Industry: What can the industry do to maintain its competitiveness about the individual attributes of that industry?
Environmental: What is the environment's influence on the enterprise's success?
Strategic: Positioning the enterprise in the market. What are the processes that lead a company to occupy a position in its niche, and how can it stand out?
Temporal: Internal factors that influence Critical Success Factors. Difficulties within the business, people management in HR, management processes, among other individual particularities of each business.
When you're in the process of starting a business or expanding your current one, it can be difficult to know which factors are going to have the most effect on your success. It's important to take into account all aspects that might come with your new enterprise, but these six critical key success factors will give you a good foundation to work from and help you grow your business.
Know your industry
The first point is to understand that critical success factors may vary according to the line of business. For example, a clothing store and an equipment factory will have distinct aspects.
Of course, and as already explained, there are common points that are priorities in any sector: financial strength and customer loyalty.
Knowing your niche will give you the proper insight into priorities, ensuring healthy business growth. Ideally, this research should occur right at the beginning, allowing the company to work on the success factors in the first few months of operation.
Identifying the success factors is not enough, and it's just part of the process. Once established, you must group them hierarchically, that is, define which are the priority points.
This is important because even if your company has considerable financial capital, it is not interesting to invest in all items at once. A great tip is to start working on the factors that most impact the performance of the business.
Be clear in the definition, avoid future errors or even waste resources, from time to financial. Another crucial issue is to consider priorities according to the reality of your company. Even if other brands in the same fieldwork with a different classification, the correct thing is that your routine is the primary basis.
Finally, it is essential not to skip this step. Failure to define priorities can, at some point, hinder decision-making in the creation of plans and strategies. Even the productivity of teams can be compromised if this situation is negligent.
Financial and human resources top the priority list in most organizations. But, as said, you must perform this separation according to the reality of your business.
Analyze company performance
The identification of critical success factors cannot happen in isolation. In other words, work is best done when it is part of an organizational project.
For example, when you define the company's objectives and goals in advance, you have a central point for analyzing the factors. If the organization is not achieving the expected results, the study of poor performance is the starting point to identify its critical factors.
You're an industrial operations manager, and your team can't achieve productivity goals. Thus, its success factors can be a correct standardization of production, monitoring of equipment maintenance, and integration of information from reports.
The point is that you could identify the critical factors more easily thanks to the performance analysis of the objectives defined in the initial planning. In short: without a groundwork, everything becomes more complex or uncertain.
Do the mapping
Another way to identify your critical factors is by mapping activities. With this work, it is possible to determine what can be improved in the company's daily production, ensuring excellence.
With mapping, your analysis of the needs of each point becomes more effective, even facilitating the construction of a hierarchical priority list. When there is a lousy structure in this part, all efficiency is put at risk.
Among the various points that can be identified in an activity mapping are:
demotivation of employees;
Each company can look for the ideal way to map its activities, considering its routine. But in general, you should follow a few steps:
determine the objectives of the activities;
identify inputs and outputs;
check the components;
Use checking tools
Without organization, definitions are hardly correct. Therefore, in identifying your success factors, it is crucial to have tools that point out and check each stage and sector of your company.
Checking tools or platforms are ideal for the manager to be able to monitor various processes following the plan. Remember the mapping? With the correct solution, it is possible to verify critical points of the activities easily.
In addition, tools can be the key to certain factors. For example, if the performance analysis identifies that the stagnation of some processes happens because there is no integration or sharing of information, implementing a checklist becomes your solution.
However, if properly used, this type of investment can yield benefits that leverage essential points for the business, such as:
Make periodic evaluations
Critical factors are not immutable issues and may vary according to the situation of your business, and the market, among others. Therefore, it is necessary to identify them, create actions to improve them, and periodically evaluate them.
The change in focus can be a good sign, showing that the previous factors have been worked out, and your company's growth has opened up new perspectives.
The important thing is to keep in mind that the evaluation is another action for the evolution of the business. Ensure that this philosophy is among the company's values, ensuring that monitoring takes place independently of the professionals at the forefront of each sector.
Finally, determining and monitoring the critical success factors of your company is essential, as it allows you to focus on what is relevant. Managing an organization and keeping its excellence has become a significant challenge with the high competition. Therefore, it is necessary to work to eliminate all noise and waste and to direct resources to the central points. Business evolution is only possible when there is targeted work.