Identify Critical Success Factors

"Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals...

"Identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them. Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

Step One: Establish your business's or project's mission and strategic goals...

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors. As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one...

"Tip: How Many CSFs?
To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.

Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.

Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.

Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs."

Read more in this article from MindTools.com, from which the foregoing was quoted

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No Decision is Perfect

"People usually make decisions in one of two ways: They analyze the pros and cons, or they go with their gut instincts. In psychology and business journals, writers who you'd think have better things to do use up gallons of ink arguing about which approach is better. [Gary] Klein recommends a combination of these methods, in this order:

"Get in touch with your gut first. Once you start listing pros and cons, your rational mind will drown out your intuition. Klein defines intuition as the accumulation of experience converted to flash-fast thinking...

"To uncover your intuitive point of view, you can even flip a coin—not to make the decision for you, but so you can register your gut reaction to the result. How do you feel when one option drops out? If you're disappointed, ask yourself why.

"Open up the options and visualize each one...Without overdoing it, brainstorm a lot of options. Think creatively about combining the best pieces of each one by compromising or going whole hog: You could buy both the red and the black sweater.

"Banish vague fears, such as 'It may be a mistake,' and instead try to see yourself in a specific scenario. Ask yourself concrete questions about the possible outcome: What's the worst that could happen? What would I do then? Could I live with that? "It's more important to visualize how each option would turn out," says Klein...

"Let go of the idea of the perfect answer. You cannot possibly get all the info, nor can you foretell the future and calculate all the risks. Chill out. 'The harder a decision is to make, the closer the outcomes are to each other, and the less it matters,' says Klein...There is never a guarantee that you're making the right decision. Just accept that."

"Trust yourself. Improve your intuition by examining your decisions after you've made them. Look at whether you would do it the same way again."

Read more in Reinvention StrategiesL: Follow Your Gut

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Strategic Decision Making Traps

"There are a series of traps that people fall into [in making decisions], that lead to incorrect judgements being reached, whatever the quality of the preceding analysis. The incidence of this is high. The cost, given that these are strategic decisions, is commensurately large...

"Pragmatism leads to at least two biases that impact strategic decision making.

1. Fact-based bias... we like to make decisions based on facts,[but]... To make strategic decisions, we need to be guided by a 'theory' that allows us to act before all the facts are in... a causal theory about the future - 'if we do this, then the following will happen' - lies at the heart of strategic decision making. We cannot wait for all the facts.

2. 'Cut-through' bias... The second consequence of a pragmatic mindset is that it drives people to 'cut-through' and jump to a decision, by making a call. It is the other side of the fact-based bias. We wait for the facts, get impatient and cut-through...Unless it is done with great skill, it can lead to wrong decisions.

"Following are the traps that people fall into.

Trap one - over-simplification

Trap two - embedded assumptions...Many decisions are based on embedded assumptions that are not discussed, assumptions that often turn out to be wrong.

Trap three - incomplete criteria... Many important decisions are made without an explicit, agreed set of criteria... Strategic decisions will have multiple options, to be tested against multiple criteria... multiple weightings and multiple time periods. The human brain cannot reliably cope with such levels of complexity.

In these circumstances, a formal, explicit process will yield a surer judgement...

To avoid these traps, make the decision process visible. Work hard to consider the whole problem at the same time. This provides a great incentive to expedite the process. Identify important embedded assumptions. And spend real time talking through the decision criteria, weightings and scoring. This way, the decision process will do justice to the hard work done in fact gathering and analysis. Better decisions are the expected result."

Read more in this article from CEO Forum Group

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An Overview of Forecasting Methods

"There are several assumptions about forecasting:

1. There is no way to state what the future will be with complete certainty. Regardless of the methods that we use there will always be an element of uncertainty until the forecast horizon has come to pass.

2. There will always be blind spots in forecasts. We cannot, for example, forecast completely new technologies for which there are no existing paradigms.

3. Providing forecasts to policy-makers will help them formulate social policy. The new social policy, in turn, will affect the future, thus changing the accuracy of the forecast.

Many scholars have proposed a variety of ways to categorize forecasting methodologies. The following classification is a modification of the schema developed by Gordon over two decades ago:

Genius forecasting - This method is based on a combination of intuition, insight, and luck...

Trend extrapolation - These methods examine trends and cycles in historical data, and then use mathematical techniques to extrapolate to the future...

Consensus methods...

Simulation methods - Simulation methods involve using analogs to model complex systems...

Cross-impact matrix method...recognizes that the occurrence of an event can, in turn, affect the likelihoods of other events...

Scenario - The scenario is a narrative forecast that describes a potential course of events...

Decision trees..."

Read more in this comprehensive and fascinating article by David S. Walonick.

Technorati Tags: business, management, entrepreneurship, startup, legal

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Strategic Planning FAQs

" 1. What is strategic planning?
2. What are the key concepts and definitions in strategic planning?
3. What are the basic steps in a strategic planning process?
4. What do I need to know before I start the planning process?
5. What are the individual roles in a planning process?
6. What's in a mission statement?
7. What's in a vision statement?
8. What is a situation assessment?
9. How can we do a competitive analysis?
10. What is a strategy and how do we develop one?
11. What should a strategic plan include?
12. How do you develop an annual operating plan?
13. How do we increase our chances of implementing our strategic plan?
14. Should I use an external consultant?
15. How do I use retreats in the planning process?"

Answers may be found in this article from Alliance for Nonprofit Management: Strategic Planning.

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