Advantages & Disadvantages of Critical Success Factors

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The concept of critical success factors has been around for many years --- long before the term became a part of the business lexicon, as developed by John Rockart at MIT. Critical success factors are necessary conditions for a project, business or organization to thrive. These methods of providing goals enable the project or organization to succeed.

Goals Lead to Success

  • The main advantage of critical success factors lies in the fact that they provide goals and benchmarks for the organization. If a success factor for a business is to capture a percentage of market share, or to generate a certain amount of profit, its staff should know about this goal --- and aim for it. It allows the business to focus its energy on those goals. Lacking goals can cause a business to stagnate as the employees focus on simply running the company instead of achieving new levels.

Incorrect Goals

  • Identifying the wrong success factors can prove detrimental to a business. A business that emphasizes profit but ignores the elimination of long-term debt may become vulnerable during economic downturns. When considering the adoption of critical success factors, look at all facets of the organization or project, and examine and define both the potential rewards and threats. What may seem popular or merely interesting may not be in the organization's best interest.

Overemphasis

  • It is important be careful with the emphasis placed on critical success factors and how you are rewarding people involved in achieving them. If, for example, you tie the bonus system to meeting success factors, everyone will concentrate on them. Concentrating on goals and not the success of the project or business can create situations wherein prioritized tasks become neglected for the sake of achieving the reward.

Alignment With Other Organizations

  • If you work in a large organization, or an organizations with tight partnerships with other organizations and businesses, keep in mind the critical success factors of others around you before setting your own. Information technology departments in large companies may focus on a set of success factors such as system stability and the need to follow project management methodology, when the rest of the business is concentrating on getting new systems in place quickly to meet changes in the marketplace. This situation can create opposing targets; in this case, stability and project management methodology tend to slow down the process of providing new systems as they imply more caution, which the business may find restrictive in its rush to move ahead.

References

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