Critical Success Factors: Benefits and
Examples
By Indeed Editorial Team
February 23, 2021
No matter your industry, it's important to focus on what can help your organization
achieve its mission and goals effectively. Identifying critical success factors, for
example, can help a company achieve both its short- and long-term goals. In this article,
we explain the importance of critical success factors, list the steps for how to identify
them and provide you with examples of critical success factors across various
industries.
Related: Using Key Performance Indicators (KPIs) To Achieve Goals
Why are critical success factors important?
As a manager or project team leader, it's important to know what your company needs
to achieve a positive outcome for its various projects, strategies, goals or the
organization as a whole. When you have critical success factors, it allows your company
to focus on increasing its capabilities to meet these critical success factors. Here are
some of the additional benefits that come from having and identifying critical success
factors:
Greater success
When you have critical success factors, your business can focus its energy on
achieving its goals. Essentially, critical success factors give you and your co-workers or
employees something to work toward. The better you understand your critical success
factors and follow through with your plan, the greater chance you have of meeting your
goals.
Helps eliminate unrelated performance measures
When you determine your critical success factors, you can focus on the most important
performance measures. This means you can eliminate the ones that don't positively
impact the critical success factors. Doing this can help reduce costs and may help you
achieve your goals more quickly.
Helps prioritize resource allocations
Knowing your critical success factors can help you identify your company's mostneeded resources. Prioritizing your resource allocations can then lead to greater
performance management and strategy.
Keep in mind that while it's important to have critical success factors, you need to
communicate and monitor them regularly to execute your strategy effectively and
achieve success.
Related: Using Performance Management in the Workplace
How to determine critical success factors
Now that you know the importance of critical success factors, consider how you might
implement them at your own company. Use these steps to identify your own set of
critical success factors regardless of your industry:
1. Assemble a team
Before determining a businesses' critical success factors, put together a team of people
who can work on them and ensure their effective use. Start with senior-level employees
since you need their ongoing support. While you can hire a consultant to help you, you
can also keep the entire process internal.
2. Ask for employee feedback
Prior to determining your company's critical success factors, have employees provide
you with ideas to help. While you can do this prior to establishing your company's goals
or critical success factors, you can also ask them for constructive feedback once you've
determined a few of them. No matter the method you choose, make sure to take their
feedback and ideas into consideration as this shows you care about their opinion.
3. Establish your company's mission and goals
Determine your company's mission and its short- and long-term goals. Make sure you
establish strategic goals that can positively impact or influence your company. Once you
know your company's mission and its goals, you can move on to determining what you
need to achieve them.
Related: The Difference Between Objectives and Goals
4. Examine your goals and determine your critical success factors
Determine the key components needed to achieve each of your goals. These
components make up your potential critical success factors. For example, if you have a
goal to expand your store space, your critical success factors may include securing
financing for the expansion and ensuring the construction work doesn't affect
productivity.
Once you have a list of potential critical success factors, evaluate them and identify the
ones that are most important and truly essential for achieving your goals. These will be
your definitive critical success factors. In some cases, you may discover new objectives
or find ways to improvise your current ones.
5. Implement and communicate your plan
Implement a strategic plan that uses your critical success factors to help achieve your
company's goals. In addition, make sure to inform your team of the plan. The critical
success team also needs to have knowledge of the various critical success factors so
they can prioritize them.
Ongoing communication can help enforce the plan and prevent execution issues. In
addition, having everyone on board with the strategy can help lead to its successful
execution. You can also inform your team regarding what you did with the feedback
they provided. Doing this can motivate them to share their ideas or feedback in the
future.
6. Continuously monitor your critical success factors
To ensure you stay on track toward achieving your goals, monitor and reassess your
critical success factors and their performance over time. In addition, consider the
various ways that can help you monitor and measure them. For example, if you want to
grow the size of your organization, you may have critical success factors such as
growing your current number of clients and partners. If you're performing well with these
critical success factors, you may have an effective strategic goal. If not, you may have
to reassess your strategy and critical success factors.
It's also important to keep in mind that the frequency in which you monitor or measure
your critical success factors may differ. For example, if you're monitoring a financerelated critical success factor, you may want to track results every month. If it's related
to hiring, you may only need to track a few times per year as you make new hires.
Critical success factors examples
While some companies may have the same critical success factors, others have more
industry-specific ones. To better understand critical success factors, consider the
following examples of critical success factors for businesses in different industries:
Restaurants and food service
Here are some examples of critical success factors in the restaurant business:
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Increased customer satisfaction
Quality service
Increased customer feedback
Higher quality of menu items
Improved marketing strategies
Sales
Here are some examples of critical success factors for a sales team:
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Greater customer relationships
Increased number of industry contacts
Improved team culture
Engineering
Here are some examples of critical success factors in the engineering industry:
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Reliable designs
Cost-effective designs
Identified and managed project risks
Marketing
Here are some examples of critical success factors in marketing:
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High product quality
Low production costs
Increased delivery speed
Larger marketing budget
Improved research quality
Manufacturing
Here are some examples of critical success factors in the manufacturing industry:
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Quality product manufacturing
Low-cost manufacturing plant locations
Low-cost designs
Adequate skilled labor