Friday, August 6, 2010

Critical Success Factors (CSF)

"What can we be doing here that isn't already being done well elsewhere?"
From "When you're up to your a** in alligators … It's hard to remember you're original objective was to drain the swamp." —Mark Stairwalt, 3-12-2010 Politics

I ran across this quote strictly by accident, but I think it rings true with just about every customer I've talked to during the past thirty-two years. In our rush to automate, businesses have created, and are hoarding, tons of useless information so that long after we are gone our heirs will add it to what they accumulate until their offices burst at the seams. If not managed properly, computers tend to create an overabundance of extraneous 'BS'. The problem it creates elevates the blood pressures of upper-level managers to dangerous levels and only adds to already high frustration levels. We have met the enemy at it is us.

Consider an article I found recently that pretty much sums up additional problems created by the Internet Age:
The Internet generation's capacity to conduct multiple Instant Messenger conversations while listening to an iPod, using Google to research a PowerPoint presentation, shuffling among multiple open screens in Windows, talking on a cell phone, e-mailing a Word file to a colleague, all the while watching this week's episode of "The Office" on TV, is taking multitasking and attention spans to unprecedented levels. Scientists at organizations such as the Institute for Neurological Disorders and Stroke are studying the impact on multitaskers' cognitive abilities, social skills, creativity, downtime, and general perceptions of the world around them. Some researchers regard the new era of digital multitasking as an advantage while others warn that such cognitive juggling could lead to loss of the ability to concentrate and cause mental restlessness.Source: "The Multitasking Generation." Sunday, March 19, 2006.

Well that pretty much sums it up for me. Just reading it makes me dizzy. How about you? Somewhere in the glut of data mentioned earlier lies the answer to everlasting life, but your quest to find it may be as complicated as the vastly complex machinery that generated the data.

To be honest, there are but a small number of pieces of data that are especially critical to a manager's job and a surprisingly small number of decisions that are particularly important. We need to establish a procedure for drilling down through the cacophony of information to find what we're looking for; but first, we have to be precise in defining what we are seeking … and why.

We do this by analyzing the critical success factors (CSF) of a business and its management. I was surprised to learn that there is only a handful of really important stuff that's critical for an executive to know in order to effectively manage an enterprise, and if they think about it, management can generally provide us with good candidates for immediate resolution.

After you have identified the CSFs of the enterprise, the next step is to have each manager, in the order of their hierarchal position in the organizational chart, add to the list, based upon his or her specific needs, the information critical for their specific jobs. Allow three hours for each executive to respond. If they need more time, then obviously they are having problems defining their jobs — also good information to have. Once you have established the CSFs of each manager in the enterprise, you can begin to sort out what information is absolutely critical for the tasks expected of them. This exercise forces management to concentrate on their specific needs, rather than the needs of the enterprise as a whole, and it helps to identify the information they feel is critical in helping them do their jobs. This technique is an exercise totally independent of computers. Computers turn the technique into a control mechanism converting business strategy planning into information strategy planning.

A manager's goals are the targets he will aim for. CSFs are tools that he will use to get where he wants to go. CSFs at one level may become goals at another level. For example: At the corporate level a CSF might be to 'maximize profits in the stores', while at the store level it becomes a goal: 'Develop a schema to put colored dots on slow movers and return them after ninety days'.

CSFs are far from being permanent. In fact, they may come and go, switch positions in their level of importance, be divided and split in two, or discarded all together — depending upon changing factors in a business. They may be geographical in nature, within the overall enterprise or for stores located in an urban environment which may be remarkably different for stores in rural locations. CSFs are particular to a specific entity at a specific period of time. From these you can develop strategic planning tools, various reports, track critical information and develop critical assumption sets, all resulting in critical decisions.

To set up a CSF study, you might consider putting together a two-person team to identify and rate your company's CSFs. One individual should have extensive knowledge of your industry. The other might be a temporary consultant that's familiar with CFS studies. The better the understanding of the industry and the jobs of the executives to be interviewed the better the study.

A CSF study should proceed from the bottom up starting with the lowest-level managers. James Martin suggests the following three questions are paramount.

  • What are those things you see as critical success factors for your job at this time?
  • In what one, two, or three areas would failure to perform hurt you the most? Where would you hate to see something go wrong?
  • If you were isolated from the business for two weeks, with no communications at all, what would you most want to know about the business?

Things a CSF interviewer should NOT do:

  • Do not lead the witness
  • Do not limit the list to those CSFs that are appropriate for computerization
  • Do not overlook externals CSFs
  • Do not limit to short term CSFs
  • Do not overlook CSFs that have been stated in multiple ways

Try to prioritize the CSFs. This may require a best-guess methodology because some CSFs are difficult to prioritize. Determine ways to measure the effectiveness of CSFs and hold a top level meeting to allow for debate with the objective of achieving top-management consensus of CSF identification.

More than likely, a CSF operation may be the most important thing an enterprise can do in order to restructure their company. It often produces immediate results and should be acted on immediately. A temporary decision-support system can easily be built using Excel spreadsheets.

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