Critical Success Factors
in SWOT Analysis

Critical success factors are those things that have a significant effect on the overall outcomes of an organization, or a project. They are usually few in number, say three to six. To achieve the intended organizational outcomes, carry out operations associated with these particular factors, at an above average level.

CSFs are often crucial for a corporate strategy to be successful. A critical success factor underpins progress in executing the strategy. A CSF can make or break the achievement of the strategy, hence the label ‘critical’.

To bring about the desired level of performance, manage these particular ‘success factors ‘with close and regular attention. CSFs include issues essential in an organization's current operations, and to its future success.

Strategic planning and critical success factors

Certain techniques aid the strategic analysis usually called Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. Finding the factors critical to success is a useful approach.

One way of proceeding with this, is for the planning support person or persons to ask each of a number of senior executives, the same few questions, such as these -

  • 'Why would customers, patients, students, or other groups served by the particular organization choose us over any similar organization?’
  • ‘What would make an investor, donor, or funding body increase or decrease their support for our organization?’
  • ‘What are the CSFs for our enterprise, or in our industry or sector, and what might they be in say five years time?’
  • ‘Where does our organization rank against comparable organizations in each CSF?’

The answers to these questions often flush out the CSFs for your particular area of activity.

You could also ask selected external people the same questions — academics, journalists specializing in the relevant industry, for example, or one’s customers, suppliers, and so on. This will probably firm up the definition of the CSFs for your operation.

Sample conclusions from such a study may include -

  • ‘The planning department spoke to all our key executives about CSFs. The wide range of opinions is of concern; no consensus exists on what they are! Perhaps this is a pointer to some strategic issue around our management team!'
  • ‘Two CSFs really stand out: a friendly, confidential customer service and real-time on-line financial data. Everyone seems agreed that these two are the critical ones. However, managers are seeing a shift in customer priorities. While the intimate, confidential style used to be important, what they are increasingly looking for is sharp, up-to-the-minute advice on a wider range of financial matters, and many younger clients are expecting to have direct access to the financial information they need to make decisions. Our major competitor, on the other hand, is excellent at the latter and now has a reliable real-time on-line ‘expert’ system, which we do not have'.

I hope you see how the process of unearthing such important success factors may well lead to valuable insight into the organization’s strategic situation.

Keep your strategic planning simple

Anything that drives a management to think systematically about their organization in its environment can be a good thing, especially if it also makes them study their competitors more closely. Searching for crucial success factors as suggested above can be helpful in this way.

 
However if it is allowed to become a highly systematized technique, that is too detailed, and needing expert staff to administer and interpret, then it may become a barrier between the corporate managers who must develop the strategy and finding the strategic issues which must be addressed by them. Managers should not delegate the heavy lifting involved in strategic thinking, to specialist planning tools or experts.

The CSF method does have application in larger enterprises with particular areas of strategic concern.

For a thorough working thorough of the critical success factor method you might like to review the report from the Carnegie -Mellon University Software Engineering Institute entitled The Critical Success Factor Method: Establishing a Foundation for Enterprise Security Management.

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