“Tips and Tools for Focusing Project Management Efforts with Critical Success Factors” on Smartsheet, February 14, 2023.
What Are Critical Success Factors?
“Critical success factors came into use in the 1960s as an executive tool to track corporate performance,” explains Alan Zucker, author and Principal of Project Management Essentials, LLC. “Critical success factors distill corporate data to the essential items for the organization’s success.”
Zucker notes that project managers (PMs) combine strategy-focused measures with critical success factors. Key success factors (KSFs) state the essential elements required for a company to compete in its target markets. Objectives and key results (OKRs) are a framework to define measurable goals and track outcomes. Quantifiable measures known as key performance indicators (KPIs) help evaluate the success of an organization.
Understand Why Projects Fail Before You Identify Success Factors
According to Project Management Essentials’ Zucker, these four conditions lead to failure:
- “The Bridge to Nowhere: Something Is Built, but Goals Haven’t Been Reached.” Lack of strategy leads to a dead end. “Too often, organizations initiate large undertakings without clearly defining the desired outcome (what) or benefits (why),” says Zucker. “You have to ask why. The desired outcome describes how the project moves the organization forward or advances its strategy, and the benefits describe the quantitative or qualitative impacts. Impacts are often better, faster, and cheaper, like increased revenue, reduced costs, or faster speed to market.”
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Sometimes you can’t state the critical success factors, which is a sign to stop the project before it begins. “In another project, I successfully pushed back on an executive who wanted to implement an IT cost management system,” Zucker shares. “The project manager provided the CIO with inexpensive ad hoc reports to help define the what and why. The larger project was never started because clear critical success factors couldn’t be defined. Recognizing that was a success, and it left time and money for more beneficial projects with a solid foundation.”
How to Identify Project Critical Success Factors
Five steps help identify critical project success factors. First, align the project with corporate strategy. Gain stakeholder consensus on project objectives, scope and timeframe. Then, hone your list to the most essential elements, identify risks, and set metrics.
“The first step when creating critical success factors is defining the desired outcome,” recommends Zucker of Project Management Essentials. “That sounds easy to do, but it’s not. The desired outcome is more than deploying a new application or capability; it describes how that capability serves the organization. Once the desired outcome is understood, define the qualitative and quantitative success measures. One method to consider using is SMART principles to describe critical success factors.”
Tips for Using Critical Success Factors Based on the “Right” Rules
- Know When You’re Done: You should always have a clear testable definition of “done.” Zucker declares, “Once the objectives are defined, the next question describes how we will know they have been achieved (key results).” He adds, “An effective way to facilitate this part of the discussion is by asking, ‘what does ‘done’ look like?’”