Are your daily activites in your organisation aligned to your stategic direction?
"It is the CSFs, and the performance measures within them, that link daily activities to the organization's strategies. This, I believe, is the El Dorado of management."
For years organisations with KPIs have not had the focus, adaptability, innovation and profitability that they were seeking. KPIs were ill conceived, mislabelled and misused.
This mayhem stemmed from a complete lack of understanding of their critical success factors. Whilst most organizations know their success factors, few organizations have:
- worded their success factors appropriately
- segregated out success factors from their strategic objectives
- sifted through the success factors to find their critical ones � their critical success factors
- communicated the critical success factors to staff
In these trying times knowing your CSFs maybe the deciding factor in survival. If your organization has not completed a thorough exercise to know its critical success factors (CSFs) performance management cannot possibly function. Performance measurement, monitoring and reporting will be a random process creating an army of measurers producing numerous numbing reports, full of measures which monitor progress in a direction very remote from the organization's strategy. As Exhibit 1.1 shows even though an organisation has a strategy teams are often working in directions very different to the intended course. The process outlined in this paper will crystallize and communicate the organization's CSFs. Staff will now be able to align their daily activities closer to the strategic direction of the organisation as shown in Exhibit 1.2. The beauty of the method, like all great methods, is that it is a simple methodical process, which can be run by in-house staff.
|Exhibit 1.1 Discord with strategy||Exhibit 1.2 Alignment with strategy|
The selection of the CSF is a very subjective exercise and the effectiveness and usefulness of those CSFs chosen is highly dependent on the degree of analytical skill of those involved. Active leadership by senior management in this process is thus mandatory.
The benefits of understanding your organisation's CSFs
Knowing, communicating and measuring progress in an organisation's CSFs is the El Dorado of management, the 'Holy Grail'. There are some profound benefits of knowing your CSFs including:
- It leads to the discovery of an organisations 'winning KPIs'
- measures that do not relate to your CSFs, or impact them cannot, by definition be important and thus can often be eliminated
- staff members know what should be done as a priority and thus their daily actions are now linked to the organisation's strategies
- reducing the number of reports that are produced through out the organisation as many will now be clearly exposed as non important or irrelevant
- encouraging clearer summary reports to the board and senior management based on progress within the CSFs
There are multiple ways that David Parmenter can help.
- Read my white paper on "Finding your organisation's critical success factors"
- Read my book Key Performance Indicators: Developing, Implementing, and Using Winning KPIs
- Attend one of my workshops — you also get a free copy of my white paper.
- Listen to my free webcasts on bettermanagement.com
- Subscribe to my personal website for my latest articles
What you can gain from reading David's white paper.
- free access to electronic versions of all templates
- A-Z Guide on how to find your Critical Success Factors
- Resources that I have used successfully in in-house workshops
- A Success Factor matrix covering major sectors
- Report measures to staff, management and the Board
- A relationship mapping process to narrow down which of your success factors are critical
In addition, David's KPI Book provides a more in-depth understanding on KPIs
I found your presentation right on track.
I had the opportunity to attend quite a few Norton/Kaplan seminars, conferences, etc. But while their last book on 'Alignment' focuses again on the importance of Strategy maps... none really expound on the relationship of strategy map, BSC to budget and ABC modelling — a question I raised at their San Diego conference in November 2007. Dr. Kaplan indicated it would be addressed in their 'next book'. :)
Thank you for addressing 'truly' an overlooked area — the connectedness of all this.