The Financial Controller and CFO's Toolkit, 3rd Edition

Chapter 17Finding Your Organization's Operational Critical Success Factors

OVERVIEW

Critical success factors (CSFs) are operational issues or aspects that need to be done well day-in, day-out by the staff in the organization. This chapter looks at the alignment between CSFs and strategy. It highlights the importance of CSFs, identifying that this is a missing link in management theory. It is based on the assumption that an organization has typically five to eight CSFs, and that CSFs should be the source of all-important performance measures—the winning KPIs.

Many organizations fail to achieve their potential because they lack clarity regarding the more important things to do. This lack of clarity means that often staff members will schedule their work based around their team's priorities rather than the priorities of the organization, that performance measures are often meaningless, and that many reports are prepared that serve no purpose. This chapter is an extract from my white paper, “Finding Your Organization's Critical Success Factors.”¹

As Exhibit 17.1 shows, even though an organization has a strategy, teams often are working in directions very different from the intended course.

EXHIBIT 17.1 Discord with strategy

David Parmenter, Key Performance Indicators: Developing, Implementing, and Using Winning KPIs, 3rd Edition, copyright © 2015 John Wiley & Sons, Inc. Reprinted ...