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Five Fundamental Questions To Help You Determine Your Critical Success Factors

Forbes Coaches Council
Nick Leighton
Best Selling Author, Speaker, Executive Coach and Peer Advisory Boards #ChampagneMoment

Over the past few weeks, I've been talking a lot about vision. I showed you how and why you need a strong personal vision. Then, I shared with you some secrets from my book on how to create a solid vision for your business. Today, I want to talk about critical success factors.

CSFs are not a new concept. Success factors were first discussed by D. Ronald Daniel of McKinsey & Company in 1961 and further developed into critical success factors by John F. Rockart between 1979 and 1981. The trouble with CSFs in today’s fast-moving entrepreneurial world is that once you have your visions in place, you want to get into the plan — you want to start executing. Not so fast, my friend. Identifying your critical success factors needs to be done before creating your written company strategy. While you may be eager to get to the action, you don't want to do that until you have taken the time to identify what your company should be focusing its resources on.

As I discuss in my book Exactly Where You Want to Be: A Business Owner's Guide to Passion, Profit, and Happiness, "A company's critical success factors bring its vision to life. They are your foundation, the base holding the rest of your business plan in place."

Some businesses' critical success factors are easy to define. For others, it might be a little harder to determine. Success might revolve around less noticeable factors, such as building strong processes, leading and cultivating an amazing team or industry trends. Often they are driven by sales, profits or a succession plan. Here, I share a few of the questions from my book to help you identify your company's critical success factors.

1. What product or service requires development?  

You should ask yourself this question consistently. Look to your competitors and the market to see if your product or service needs to be further developed to remain competitive or to win more of the market share.

2. What processes need development?  

It's important that you have the right standard operating processes in place and are actually using those processes. Nothing is more frustrating than working for a company that can't make up their mind on how they want to do things. It can cost you valuable talent. Don't be that company.

3. Does excellence, cost or client impact need to be prioritized in your company?  

Based on your vision, are any of these areas lacking or in need of improvement? Or are any of these areas being overly delivered to where you can pull time and resources from one and put them toward improving a weaker area?

4. What market areas need to be expanded upon?  

Successful business owners pay attention. They know when they need to expand operations and when they need to reduce operations. For example, if you own a retail business, you should know when to branch out and open new stores, but also when to close stores that are struggling to perform in their target market.

5. How can you boost capacity or efficiency?

You should ask yourself this question multiple times each year. Is there something you can do that can help reduce overhead or increase output? Always look for ways to grow your company. Never settle for the status quo.

Once you have a bulleted list of three to five critical success factors, there is one more step. Ask yourself, "What is the most important one? What is your driving critical success factor?" As you plan and execute in the future, this driving critical success factor should always be prioritized.

Now, and only now, are you ready to write out your goals, strategy and tactics. If you get that written down, you will have a one-page business plan that is your road map to obtaining your reason for being in business or what I like to call your "champagne moment." It's your passion and your route to profit and happiness.


Best Selling Author, Speaker, Executive Coach and Peer Advisory Boards #ChampagneMoment Read Nick Leighton's full executive profile here.…
