What is the secret of success for some companies and divisions, and what is the reason for the failures of others? It turns out that the answer to this question is a management tool or a scientific model under the loud name “Key Success Factors”. It has been widely used by corporations and entrepreneurs for 50 years.
A bit of history
The brilliant top manager Ron Daniel created his model “Key Success Factors” in 1961. With its help, he scientifically explained the mechanism of success of companies and divisions.
What's this?
Key Success Factors - a limited number of areas of activity in which the achievement of positive results guarantees the success of a company, division or person in the competition. In the language of business, this is what you need to focus on in order to be at the top of the stairs when everyone else is downstairs.
Key Success Factors are several areas where everything should go without any glitches to guarantee the success of the company or manager. These are the areas of work of the company, which need to be paid constant and special attention, to achieve maximum results in this way.
Features and examples
Its key success factors for companies exist in every industry. Therefore, those involved in the development of strategies should have a good understanding of the area of industry or business in which it operates.
An important component in determining the key success factors is the company's mission. It provides an answer to the question: how to reach the goal set in the mission?
Key success factors relate to either workflow management or personnel management. Neglect of this or that area is fraught with failure.
Today, the main key success factor is the improvement of the workflow, modern technologies. This includes high productivity, quality control, low cost of goods. It has a powerful sales network, brand strength, advertising and guarantees for customers. In the service sector, this is the speed of their delivery, the qualifications of employees, and design. And finally, nothing will come of it without a strong team spirit, an effective methodology for adopting change, a company training culture, and an effective system of vertical and horizontal communications.
Beyond Theory
Key success factors of an organization in practice can be applied as follows:
Step 1. We organize a “strategic session” - training. It involves the managers of the company, which was chosen by management.
Step 2. These employees consider and write in writing the following sentence: “For our company to be more successful than others, we must be able to do especially well ...”. Everyone thinks for himself. You can also write an organization’s mission.
Step 3. All gathered one after another voice their answers and argue them. All this is being recorded.
Step 4. The main part in the process of determining the key success factors is the selection of two or three mandatory points. Quite often, people choose: hiring competent employees, understanding customer needs. Of course, you can understand managers, they want to cover all the most important aspects of the company. However, the essence of the key success factors in the ability to focus on the main thing.
To be more precise, focusing on several main areas of activity - no more than three, we achieve the greatest results.
Any business has two or three areas of success. If your company has good results in these areas, but it is mediocrity in everything else, you still succeed.
Step 5. And finally, based on the key success factors, a certain analysis is compiled. It includes all the weaknesses and strengths, opportunities and threats.
This analysis in the future should underlie more detailed strategic planning. To be more precise, all these are key success factors, a compass in the search for the direction of strategic planning and, of course, the development of the company. It is they who set the vector for change and allocation of funds.