This is an extract from my “Finding your organisation’s critical success factors” toolkit (whitepaper + e-templates)
|Common Misunderstandings||Better practice solution|
|1. Thinking that, “We already know1 our CSFs”||It is common for the executive team to believe they and everybody else knows the CSFs.
I often joke that I could ask a CEO on consecutive days “What are your CSFs?” and I would get slightly different answers each day.
Most organisations know their success factors; however, few have:
|2. Mixing critical success factors and external outcomes||CSFs and external outcomes are different.
From the previous section you will be aware of the different characteristics.
|3. Too many CSFs||Limit to Five to Eight Critical Success Factors.
Better practice suggests that organisational CSFs should be limited to between five and eight, regardless of the entity’s size. However, for a conglomerate in the private sector, (the CSFs will largely be industry specific (e.g., the CSFs for an airline are different from the CSFs for a retail store). Accordingly, there would be a collection of CSFs in the conglomerate greater than the suggested five to eight.
|4. A set for each division||Only One Set of Critical Success Factors for The Organisation.
To create alignment between teams in an organisation, it is important that there is only one set of between five and eight critical success factors (CSFs) for the entity. If you allow teams, departments, or divisions to create their own operational CSFs, you will have chaos.
|5. Calling them Key Result Areas (KRAs)||Critical Success Factors Are Not Key Result Areas.
In job descriptions you can often find the words “key result areas” (KRAs) which are often mistaken for CSFs. I believe that job descriptions should have a new section pointing out the organisation’s CSFs and how the incumbent should maximize alignment of his or her duties with them.
This would help to clarify the difference between KRAs and CSFs. The KRAs are those duties and tasks that the incumbent must be able to perform, and the organisational CSFs are the guiding force ensuring that all staff, every day, treat activities that align well with the CSFs as a priority.
|6. Thinking that you can be at peak performance without having a common understanding of your CSFs||Performance management cannot possibly function optimally without a common understanding of your CSFs.
Without CSFs performance measurement, monitoring, and reporting will be a series of random processes, creating a small army of measurers producing numerous numbing reports. Very few, if any, of the measures in these reports contain the characteristics of “winning KPIs.”