A key success factor (KSF) is the strongest determinant on a company’s operating financial surplus. Every business operates in four areas, each of which expects its own kind of satisfaction: clients, teams, the state, and investors. There are key success factors in each area to pay attention to. Knowing their characteristics helps you come up with categories of improvement (COIs) that lead you to business optimization.
This article is meant to assist business owners, entrepreneurs, and both mature and young managers to make the most of key success factors and categories of improvement. If used correctly, every leader has a chance to take their team or organization to brand-new levels of success.
Any business needs to be improved systematically. If you don’t develop a systematic approach to business optimization, you won’t get any sustainable results. It’s much easier to run a company when you rely on 3-5-10-15 KSFs (you can choose any number of KSFs for your company). Moreover, COIs can be diverse by nature: taste, atmosphere, service quality, location, pricing, variety, brand, expenses, etc. Once you remember and understand that your clients are individuals and organizations that are ready to put their money into your business, COIs can help you focus on their wants and needs.
How Categories of Improvement Reflect Management Values
In this specific case, try not to look at a business as a one-piece unit. Looking at the entirety of a business for Cols is like trying to eat an entire elephant whole, it’s just not possible or effective. Split it into parts and explore each piece in detail. Each piece is equal to one KSF. Every industry has lots of different KSFs. For example, the top 10 KSFs in the restaurant business are location, speed, service, food, design, pricing, cleanliness, a variety of choices, expenditure control, and environment. Keep in mind that you don’t have to start your business with all these 10 KSFs involved. At first, 6 of them might be enough to study and keep track of your “elephant”.
This approach can be applied to other spheres of activities, for example, exercising and workouts. Here, your KSFs are different groups of muscles that you need to work: biceps, triceps, abdominal muscles, etc. Once you’ve defined which parts of your body to improve, it’s time to focus on processes that will enable you to exercise consistently. Businesses work in a similar way. Business processes require you to perform actions periodically, which eventually allows you to improve different COIs at the same time. Every business process is like an agreement forcing you to put effort into improving one aspect of your business 2 or 3 times a week or even more. The lack of clearly defined KSFs, COIs, and business processes makes your effort futile and fruitless. Your energy and desire are important, but if there’s no aim or direction, it’ll lead you nowhere.
Make Someone Responsible for Each KSF
A company’s success depends on the talent you assign to lead positions. If you have a strong leader for every KSF, you don’t have to worry about a slowdown or decline in business growth because they help keep your business growing systematically. All top managers or leaders for your KSFs should be the best experts in their area. However, at the same time, they don’t have to be and probably aren’t the best advisors when it comes to KSFs beyond their field of influence. When it comes to full-cycle views, an executive director or CEO is the only person that needs to be involved in all KSFs and departments (finance, marketing, logistics, pricing, service, etc.). Other managers, in turn, should remain hyper focused on their primary area of influence. This is how you get to know your “elephant”. You can have as many KSFs as you want in every subcategory, but the total number of high-level KSFs should not exceed 10. To better understand what number of KSFs works best for your business, you should count your departments. In most cases, the number of your business departments roughly equals the number of high-level KSFs you should take into account when working on optimizing your business.
Once you’ve determined all 10 KSFs, you can assess them on a scale from 1 to 10. If you perform all of them at a 10-point level, your overall performance will be 100% successful. That means that every department is working at full speed and gives you 10 out of 10 possible points. At the same time, don’t forget that most KSFs should be targeted at your current and ideal customers and clients and their needs. KSFs have nothing to do with goal-setting. One person can own one COI. Let’s take a company’s image and branding as an example. Here, you should answer the following questions: What do clients think of your brand? What impression does it make? You can have one manager in charge of several brand-related activities, such as content, conversions, service, and marketing. So, if you lead a team right now, you should allocate roles in a way so that each manager becomes the owner of one high-level COI. If you don’t have a manager for a specific COI, think of giving this position to the strongest specialist within this area of expertise. Another good tip is to always start working on the most complicated COIs. If you know that your company’s success depends on the quality of service you offer, the COIs for all service-related operations should be improved and enhanced first.
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The Owner of the Category of Improvement
The owner of the COI is a person responsible for the continuous improvement of the KSFs that have been assigned to them. Once the KSF has been defined, it’s necessary to assign a person who is going to take full responsibility for it. Small businesses may have one person handling several KSF’s simultaneously. The owner of the category of improvement is expected to set objectives, build business processes to achieve them, and do everything to make sure the KSF is steadily growing on a daily basis.
The first thing you need to do is to identify the area of improvement. It shouldn’t be too complex or general. For example, it won’t work if you say I want to grow my business, as it’s quite obvious that each and every business owner wants this. You need to go deeper and identify what are the core elements of your business, not departments. Those will be your KSFs. Although thinking of departments is also a valuable part, as it helps bring transparency. The main idea is to look at the company from a potential clients’ perspectives. They don’t care about your departments but rather about the value you give. The first thing that gets thought about is service, the second is speed. This is what distinguishes the Delivery department from the KSF called Service.
At Computools, the Delivery department is managed by our CDO, Oleg Svet and our CTO, Vitaliy Kononenko, the Sales department is managed by Artem Babura, our Head of Innovation, and other departments are run by other top managers. Big businesses can afford to have a top manager for every department, but smaller ones usually assign one person to multiple high-level positions. Whatever your company’s size, it’s possible to break it down into smaller units. Computools’s value is based on the quality of service we create. For this reason, the most important KSF is obviously service. The next one is pricing set by Grigoriy Shadara, our COO. Every top manager is solely responsible for their department. In short, that means discussing PnL or delivery issues with the head of People Management is not effective because they’re focused on their processes and tasks that belong to their department. There are also individuals who are responsible for the entire operation of the business and know all areas but not to such a deep degree as some managers and top managers This allows the CEO or executive director to consult with them on wide-ranging issues that require problems to be looked at from different perspectives. The right choice and assignment of managers and COIs owners have an immense impact on how your company grows and expands. Moreover, it allows you to exercise control over your business without getting directly involved with each process or problem.
You’ve learned how key success factors and categories of improvement in business help keep things organized and optimized. Stay up to date with the latest Computools news and tips to learn more about effective goal-setting, business management, and strategic analysis.
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Computools is built on the effective use of KSFs and COIs. Its founder, Sergii Tymchuk is actively involved in elaborating effective operational models that empower Computools with better opportunities to serve its clients and partners. If you’re thinking about digital transformation strategies for your business or organization, get in touch with our Expert Team via firstname.lastname@example.org to find out more about technology that fits your business model and business goals in the best way.