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Critical Success Factors – what the?

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Why do marketing people insist on coming up with these terms and acronym?!  Seriously is it really necessary?  First the SWOT and now the CSFs…

Critical Success Factors sounds like a medical treatment plan – things cant be that serious surely 🙂 In fact CSFs, the abbreviation, sounds more like a disease!

Please keep reading though because I think this is really important for any business not just the big ones.  This is definitely a term you would find in a very traditional marketing or business plan in the corporate world, but it is one that I think is really important – critical in fact – for a business of any size.  Simple, the CSFs are those internal factors that you identify in your business that that are your must haves or non-negotiables in order for your business to work.

When you do a SWOT analysis you will be able to identify what your CSFs are.  For those of you who don’t know, SWOT stands for Strengths, Weaknesses, Opportunities, Threats – it is a good simple tool to use to create a situation analysis of internal and external factors surrounding your business.

So, your internal environment, your strengths & weaknesses, includes things such as, your people, your operations, your financial situation, your marketing – all the internal factors of the business.
And, your external environment, your opportunities & threats, includes the market you are operating in (your macro environment) – economic, political landscape, natural occurrences, demographics, technology
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the industry you are operation in (your micro environment) – competitors, customers, suppliers, distribution channels and anything else relevant to your business specifically.

The best way is to show you an example, this one is from my Online Hub course and it is nice and simple.

Let’s think about an Interior Designer.  Here is her SWOT:

Strengths
  • She is a very talented designer
  • She has highly developed communication skills
  • The loves working with her clients
  • She is able to foster collaborative relationships with suppliers
  • She is able to work across a diverse range of interiors – residential & commercial
Weaknesses
  • She is not great at selling herself
  • She is getting a lot of work through builders
  • She is not great at paperwork – book keeping, invoicing – it gets on top of her
Opportunities
  • The second round of the GFC has impacted real estate here & as a result many people are renovating instead of buying & selling
  • as the building & construction industry flounder in some sectors there are more contract & consulting opportunities as businesses avoid permanent staff increases
  • As buyers grow more confident online this area becomes more of an option for distribution in this industry
Threats
  • GFC round 2 has affected consumer confidence dramatically with people becoming very cautious about spending with uncertainty about the future
  • The online direct to consumer model is growing and in some ways could affect the pricing structure for this industry with growing competition
From your SWOT you will be able to identify your CSFs – remembering these are the absolute key things you must achieve in your business in order to achieve success
So, for our interior designer, her critical success factors are:
  1. She needs to develop the capability in her business to leverage off the growth of online in this industry – get online!
  2. Improve her bookkeeping capabilities – either herself or employ someone to do it for her, she doesn’t need this to take away from time that could be spent on actual design work AND she also needs to be on top of her revenue streams to ensure her effort priorities are right
  3. She needs to improve her marketing efforts for the business – again either on her own or get a consultant to do this for her
The CSFs are must haves, non-negotiables, if she doesn’t get it right she will start to struggle – CRITICAL success factors.
Tell me what do you think your CSFs are for your business? Or if this doesn’t make sense email me and we can talk about it.  I’d love to hear from you.
Thanks for reading!
Kate

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