Newsletter number 8 – Critical Success Factors

May 19th, 2010

Want to know the Critical factors to ensure your business success?

In the last issue of strategy and growth I talked about the benefits of scenario planning – the ‘tool’ that many successful businesses use to help them look into ‘the future’. This helps business leaders and owners create a picture of what might happen.

A question you might now want to ask is – “It’s all very well looking at the future – but what do I do with the information?”

The simple answer – identify the the opportunities for growth and the things you need to be great at to win in your game!

Avoid the scatter gun approach…

I was reading the newspaper at the weekend when I came across an article about a business owner and how much effort he had put in to growing his business in the last three years. It was a mid-tier SME business with a  number of directors. They had spent a significant amount of money on business development. Now in this case “business development” covered anything that helped grow the business – and not just directly getting more customers.

This company had spent money on Public Relations to enhance their reputation; had invested in online advertising and search engine optimisation to boost their web presence. They had also invested in a new logo and brand image – although in their case I got the impression all they now had was a nice graphic image on their stationary and above their door (Give me a call if you want to talk about this!). They had even increased the size of their sales force to help them capture more of the market in anticipation of the extra demand.

By the end of the article I came to the conclusion that this company had basically read a text book about how to grow their business – and done the lot. They had applied a one size fits all approach to business development but had started in the middle of the “journey”.

So what could they have done better?

I help my clients to identify and understand the content of their scenario analysis – this helps them identify the “future success factors” for their business – in fact for any business in their industry or market. The other principle we work with is to ‘look at’ and ‘listen to’ the market place and make an assessment of what the customer needs and wants.

An assessment of these factors helps you assess what you need to be doing to “excel”. It helps you understand what you need to focus on, and be excellent at, today … and tomorrow … for success.

Here are some simple steps to help you do this:

1. The first step in the process is to review the environment in which you work using the STEEPLED analysis and scenarios you have created (download the Market analysis tool here). Then with your team (if you have one, or with external help) identify the key factors that you know will influence your industry and your business. (you might need additional research to support this but I generally find most business owners ‘know’ what’s important).
2. Then ask yourself a series of questions to identify the key factors that will influence your success in the market:

• What is it that our target market demands from our product or service now and in the future?
• What does our product or service bring to the customer and what about it makes our business successful?
• What are the standards that are expected by our clients and customers?
• What extra services could we provide?
• What are the key factors that contribute to making our business successful? (these could be skills and capabilities, partner relationships, technical knowledge, distribution channels, customer support)

1. Next review the list of factors and narrow it down to the top 10-15 factors that you must excel at.
2. Re-review these and further narrow the list down to the top 7-10 – these are your “Critical Success Factors”.
3. The final step is to assess yourself today against the factors identified:

• how well do you currently perform against each one of these criteria?
• how well do your competitors perform?

To help with this process have a look at www.malabarconsulting.co.uk/downloads – and download the CSF template – this will help you assess your current and future positions.

Once you have answered these questions you will have view of what you need to be and what you are today – the next step is to identify any actions that you want to undertake to close the gaps and make you even more successful.

Remember that CSFs are not the same as Key Performance Indicators (KPIs) – however you can use the CSFs as a basis for developing your KPIs – after all if these are the things you want to excel at then measuring yourself against them will ensure you focus on them.

Final Success
Following this process will help you understand what you need to focus on for business success. It will help guide your decision making and can help with day-to-day planning. If what you’re doing does not contribute to delivering one of your CSFs you need to ask what relevance is it to your business – it may be that your CSFs have changed or it might be that you’re doing the wrong things!

Need support?

This is issue 8 in a series of articles created to help you achieve your vision and build equity in your business - by taking time to build your business strategy you will enhance your performance and GROW your business. If you would like more information on any of the issues in this newsletter or the series please call on +44 1844 208802, email me at philip at malabarconsulting.co.uk or visit the website at www.malabarconsulting.co.uk.