Critical Success Factors

by Graham Denton

Developed originally by Arthur Andersen and the McKinsey consulting group, the concept of Critical Success Factors (CSFs) now generally refers to the areas of information, standards, and performance measurement that are considered crucial at the executive level of a given organization. In his book Selling to the Top, IBM sales trainer David A. Peoples defines CSFs a little more colloquially, as "those few things that must go absolutely right for an organization to succeed and prosper." There are seldom more than a handful of these factors, and if you're selling to the top of a corporate organization, you must begin by understanding their significance because these factors (a) are always at the top of top managers' agendas and (b) may change over time depending on business conditions.

Peoples cites the case of the U.S. automobile industry. In the oil-strapped 1970s, one of Detroit's Critical Success Factors was fuel efficiency. It had to be in order for the Big Three automakers to compete with Japanese models. With the easing of the oil crunch, however, American manufacturers had to compete on different metrics, and "quality" became a new Critical Success Factor. Other factors in this industry, emerging at different times, included styling, the maintenance of a strong dealer network, and cost control. When these areas are managed properly, Detroit does well; when they are mismanaged, U.S. automakers lose market share.

Why is this important when you're selling to the top? Because at that level, the salesperson's natural tendency to talk about products, features, and benefits can not only be misplaced, but dangerously distractive. Peoples uses the example of a database system which might, over the long haul, enhance manufacturing quality. That's fine, but selling the top executive on your database's capacities (memory, flexibility, scalability) will only get you stuck at the "tech specs" level. It's the kind of tactical approach to short-term results that might appeal to plant managers or systems engineers, but that will be lost on someone who is looking at long-term goals. So, when you're selling at the top, keep the Critical Success Factors in mind. "The language at the top consists of CSFs, goals, and objectives -- not implementation tactics."

That's also the level, Peoples points out, at which you can get confirmation of what those CSFs actually are. If you ask a lower-level manager to define broad goals for you, you're likely to find out "what's critical for a department or a division," but only that. A production manager will tell you that maintenance and backlog are "critical" issues, and they will be -- but only for his department. "One person's floor is another person's ceiling," and only people at the very top levels can tell you that "quality, cost control, and styling are critical for the company."

To get them to tell you that, Peoples says, ask questions that relate to those CSF concerns. A few examples: "What are the priority issues in your business?" "What are your immediate goals with regard to these issues?" "What specifically has to happen for you to achieve these goals?" "What do you see as the obstacles to achieving them?" and "What measures will you use to determine whether or not they've been achieved?" All of these questions relate to the overall issue of what's important, with regard to CSFs, at the executive level.