Critical Success Factor (CSF) tutorial
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Critical success factor (CSF)

Critical Success Factor


What is a critical success factor?

A critical success factor (CSF) is a management term for an element that is necessary to achieve success.

  • A CSF drives the strategy forward.

  • A CSF makes or breaks the success of the strategy.

  • When all the CSFs are combined, they are sufficient for success.

Choosing the right CSFs needs good understanding of what is important to the organization, to the industry, and to the customers.

  • Critical success factors are the essential elements of a strategy for success in a particular business in a particular industry at a particular time.

  • Strategists should ask "Why would customers choose us?" and the answer is typically a critical success factor.

How to define a CSF

To define a CSF, you can cover these areas:

  • Plan

    • Clear definition of goals, roles, and impacts

    • Realistic calendar of tasks and activities

    • Access to financial resources

    • Set norms of quality

    • Balanced budget

  • Processes

    • Formal work methodology

    • Solid infrastructures

  • People

    • Team work

    • Competencies

    • Commitment

  • Power

    • Experienced managers

    • Sense of fairness

  • Contingency strategy

    • Risk and vulnerability assessments

You can also consider Rockart's CSF types:

  • Industry: these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.

  • Environmental: these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.

  • Strategic: these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

  • Temporal: these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.

How to improve a CSF

To improve a CSF, you can ask these questions:

  • Does the CSF clearly relate to a strategic objective and key result (OKR)?

  • Does the organization have the right resources and infrastructures?

  • Does the team clearly understand the plan, goals, roles, and impacts?

  • Does the team feel empowered, capable, and ready for the challenges?

Key result area (KRA)

A key result area (KRA) is a synonym for CSF.

  • The KRA synonym can confuse peoplem, so it's typically better to write CSF and not KRA.

  • CSF is the more widespread term.

Key success factor (KSF)

A key success factor (KSF) is a performance factor that is generally for a trade, profession or industry.

  • Key success factors are common across firms within a product area, market area, or industry area.

  • A KSF is something that a business must do to be successful.

Key factor of difference (KFD)

A key factor of difference (KFD) is a performance dimension that makes an individual businesses unique and distinct.

  • The uniqueness and distinctness is specifically from other businesses in the same product area, market area, or industry area.

  • Key factors of difference are the factors that a particular business chooses to differentiate itself on.

For more information