Critical success factors defined

There are certain things that we consider essential to our being things that make us who we are that if we were to take them away we may no longer recognize ourselves in business. These crucial elements are known as critical success factors. In short, a CSF explains what is central to a business’s future but it might be easy to identify the things that make your business unique. It may take some work to realize those things that a business cannot do without so it is important to recognize critical success factors as soon as possible.

First, you need to establish and analyze your mission and goal statements and then ask yourself what areas of a business is essential to achieve this goal. There is likely to be a limited number of CSFs however faced with an array it pays to analyze each candidate. Like analyze if the objective related to the particular factor is not achieved, will the business fail or lose the competitive edge. If the answer is yes then you have the true critical success factor. Knowing your critical success factors means you can tell yourself and others in very certain terms what is central to the future of business and how this will be achieved.

They are those things that you have to do well to deliver value to customers. If you are an auto manufacturer you have to record run well, you have to match critical success factors to your core competencies. Or for a successful information technology project, the critical success factor is user involvement.

So critical success factors are the strategy elements, attributes, capabilities, or assets with the greatest impact on future success in the marketplace. An industry’s key success factors depend on the identification of the industry’s dominant characteristics. The following three questions and their answers can help identify an industry’s key success factors

  1. Buyers of the industry product

Why do buyers of the industry product prefer one particular brand, what is the main difference between the competing brands of sellers? Or what product attributes are crucial?

  1. Competitive forces in the marketplace

What competitive capabilities does a company need to have to be competitively successful?

  1. Shortcoming competitive disadvantage

What shortcomings are putting a company at a significant competitive disadvantage?

Mostly there are less than 6 key factors for future competitive success. Managers should therefore resist the temptation to label the factor that only has minor importance.

Types of critical success factors

There are two types of critical success factors

  • Primary

Directly determine the success or failure of a business or project. It mostly includes cost, schedule, quality, scope, resources, work process, stakeholder satisfaction, etc.

  • Secondary

Indirectly determine the success/ failure of a business or project. It includes impact on the environment, impact on the local community, no immoral outcome, no causalities, etc.

The main focus is on the most important areas and goals i.e., what is to be achieved and how will you achieve it. These are the areas where the business should win so if a business needs to achieve its objectives, goals, strategies, mission, and vision then the business needs to win in these areas. The critical success factors will ensure the success of the organization so identification of CSF is the first challenge and then the achievement of CSF is another challenge so it is important to learn 2 things

  1. How to identify the CSFs?
  2. How the CSFs are being achieved by the organization? Or is the organization achieving its CSF or not?


There are different ways through which we can identify critical success factors. There are mostly 5 sources for the identification of CSF as mentioned below

  • Industry structure

Critical success factors are based on the type of industry structure. Let’s suppose if it’s a service type industry that is education-based then its critical success factor would be to provide quality education. So if you provide quality education to your students that means you will achieve your mission and vision. The other critical success factor will be to ensure good grades for your students so it is the industry structure i.e., the service business that is indicating the critical success factor. And this is something you have done based on the educational institute.

Let’s take another example of a manufacturing industry like a shoe manufacturer. There will be different CSF for manufacturing concerns first and foremost will be the quality product. The second will be efficient production so these are the critical success factors for a manufacturing concern

For a construction company, the deliverable could be a house. So critical success factors would be construction works professionalism and quality of materials being used. The target would be creating some rooms, doing it within a budget, and delivering it on time.

So it is the structure of the industry that is identifying the CSF for the service industry and manufacturing industry. There is a possibility of duplication of CSF in various industries as well.

  • Competitive strategy of the organization

The comparative strategy of the organization also indicates the critical success factors. For example, if the business wants to be a cost leader so this “cost leader strategy” will help the business to find out the critical success factors. So for such a business that is pursuing to be a cost leader, there will be CSF like the cheaper product. Such businesses need to produce cheaper products or reduce their cost so continuous cost reduction will be a critical success factor because they are marketing as a cost leader.

But in another case, if a business wants to be a differentiator, innovation will be the critical success factor. For such a business innovative products will be the critical success factor.

  • The environmental factors

Environmental factors also help in the identification of CSF. Let’s take an example of an airline company as it has an environmental consequence. Poor quality or poor fuel can multiply the pollution manifold so the critical success factor will be to reduce carbon emission. Carbon emission reduction is very important for such companies as it has an environmental consequences and it depicts the company’s seriousness and quality.

  • Temporary factors

Critical success factors identification depends on the condition or circumstances of the organization. Let’s take an example of any government department i.e., responsible for the safety of citizens. If there are chances of floods then the critical success factor for this department will be the safety of citizens. Secondly providing homes if there is a chance of dislocation of citizens. So temporary factors will determine the critical success factors temporarily the government department will have critical success factors to counter the fluid situation.

  • Functional manager’s position

Let’s suppose it’s a production manager, critical success factor will be efficient production as the post of production manager demands the assurance of efficient production every time. Secondly quality will also be a critical success factor for the production manager

Let’s take an example of a Sales manager, in this case, critical success factors will be higher market shares.

Critical success factors in project management

Critical success factors refer to the activities that must be completed to a high-quality standard to achieve your project’s goals. It is a way to prioritize certain tasks as the project plan is being executed. It is important to have clear CSF as it enables the team to work on tasks on a priority basis thus allowing the people to work together to achieve the project’s main objectives.

Most important critical success factors

According to the project management institute and other researchers, the following factors affect project success the most

  • Formally established project managers with the necessary skills and authority
  • Set project goals
  • Competent and experienced project teams
  • Top management support

Importance of critical success factors

Unfortunately, many project managers (about 67%) and companies do not understand the importance of their critical success factors. This can lead to poor results and the failure to complete important tasks. Other problems include a lack of support and risk management. Risk management and lack of support are other problems.

Its importance can’t be denied as they help project managers to

  • Facilitate communication among different project managers
  • Monitor and control scope, changes, and risks
  • Identify and prioritize goals and tasks
  • Identify and allocate resources
  • Remove bottlenecks in knowledge sharing flows


Critical success factors are management terms that refer to an essential element or activity that is required to achieve a successful project or organization. These activities or procedures are usually performed by the organization’s managers and are aimed at improving the overall performance of the company. It also includes issues vital to an organization’s current operating activities and its future success. Although critical success factors are often referred to as success criteria, they are not related to the same concept. Instead, they are the outcomes of a project or an organization’s achievements that are required to be considered successful..

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