1. Finding your organization's critical success factors
Presented by David Parmenter
waymark solutions limited
November 2009
Website:
Prepared by David Parmenter, waymark solutions limited

2. CSF Stories freight forwarding company airline
Prepared by David Parmenter, waymark solutions limited

3. The hierarchy of success factors
Timely arrival and departure of planes
Critical success factors
Success factors

4. The hierarchy of success factors
trucks leaving on time as close to 100% capacity as can be
Critical success factors
Success factors

5. This workshop is an extract from my white paper that can be acquired from www.davidparmenter.com
Prepared by David Parmenter, waymark solutions limited

6. This presentation is part of a series of webcasts on ‘winning KPIs’ www.bettermanagement.com
Introduction to winning KPIs (Aug 09)
Implementing KPIs - A 12-Step Process
Implementing KPIs in Smaller Orgs (<200 Staff)
Finding your organization’s critical success factors
Balanced scorecard in 16 weeks not 16 months
Getting started or restarted with winning KPIs
Revitalizing a floundering balanced scorecard with winning KPIs
‘Winning KPIs’ - a question and answer session
“Sorting the wheat from the chaff” – finding your wining KPIs

7. Why does performance measurement fail in so many companies?
do not apply enough rigor in our measures – hospital example
lack of a process – invented in a spare afternoon
little or no tie in to the organization’s critical success factors
observed well after the ‘horse has bolted’
lack of clarity about who should see what
too many and all treated the same
lack of attention by the senior management team

8. Linkage of strategy to KPIs and BSC
Linkage of strategy to measurement
Mission / Vision / Values
Linkage of strategy to KPIs and BSC
Strategies (issues & Initiatives)
Financial
Results
Customer
satisfaction
Learning
& Growth
Internal
Processes
Staff
satisfaction
Community
& environment
Critical Success Factors
Key Result Indicators (max 10)
Performance Indicators & Result Indicators (80 or so)
Key Performance Indicators (max 10)
Financial
Results
Customer
satisfaction
Learning
& Growth
Internal
Processes
Staff
satisfaction
Community
& environment
KPIs & PIs in a balanced scorecard and KRIs in a dashboard
Prepared by David Parmenter, waymark solutions limited

9. Changing this
Team direction
Strategic direction

10. To this
Teams in alignment with strategy

11. 4 types of performance measures
KRIs
peel the skin to
find the PIs
PIs&RIs
peel to the core
to find the KPIs
KPIs
Prepared by David Parmenter, waymark solutions limited

12. The 10/80/10 rule
Prepared by David Parmenter, waymark solutions limited

13. Critical success factors
“a list of issues or aspects of organizational performance that determine ongoing health, vitality and well-being” source AusIndustry
out of the success factors only 5 to 8 will be the critical ones
the missing link to making your performance measures work
Prepared by David Parmenter, waymark solutions limited

14. How well known are the critical success factors in your organization?
24% - there is a list which I have as do other staff
25% - there may be a list but I am not aware of it
51% - no formal list but management refer to them in papers and discussions
Source: survey March 08 over 450 attendees
Prepared by David Parmenter, waymark solutions limited

15. Has an exercise been undertaken to ascertain your organizations critical success factors within the last 5 years?
32% - yes
48% - not to my knowledge
20% - do not know
Source: survey March 08 over 450 attendees
Prepared by David Parmenter, waymark solutions limited

16. With 40 or so success factors there is confusion and a lack of focus
too many measures
strategic plans with too many diverse and contradictory initiatives
lack of communication and direction to operational and support staff

17. Most organizations know their success factors - however few organisations have:
worded their success factors appropriately
segregated out success factors from their strategic objectives
sifted through them to find their critical ones – their CSFs
communicated the CSFs to staff

18. Importance of getting the SFs right
wording of the SFs is critical
retention of staff becomes retention of key staff
increase repeat business becomes increase repeat business from core customers
measures become more specific
daily sales becomes daily sales made to key customers
planned calls becomes planned calls to key customers
deliveries made on time becomes deliveries to key customers made on time
Prepared by David Parmenter, waymark solutions limited

19. Finding your critical success factors (step 6) is a three phase process
finding out the SFs that have been mentioned over the last ten years or so
holding a two day workshop
presentation to the SMT and Board to obtain agreement on the CSFs
Prepared by David Parmenter, waymark solutions limited

20. The Goal: to find your 5 to 8 organization-wide CSFs
5 to 8 regardless of size
CSFs will largely be industry specific e.g. the CSFs for an airline are different to a retail record chain store
a conglomerate organization would have 5 to 8 CSFs for each different industry
a very subjective exercise - highly dependent on the analytical skill of those involved

21. Please talk to the person next to you about what I have said
does it make sense?
is it relevant to you?
any areas of confusion

22. Phase 1: Researching the existing SFs
finding out the SFs that have been mentioned over the last ten years or so
developing a list of these and grouping similar ones together
consult stakeholders (board members, key customers, key suppliers, unions etc.) and employees
interview some of the SMT and Board members (especially those who have known the organization for a long time)
Prepared by David Parmenter, waymark solutions limited

23. The SF matrix

24. A CSF case study (NZ Maori Arts & Crafts Institute, Rotorua)

25. Background Rotorua geysers, mud pools and Maori arts & crafts 56 staff
600,000 tourists
foreign independent travellers
tours (many from Asia)
domestic
revenue generated from entrance fees, retail shop, evening concerts
geyser is the main draw card

26. Financial SFs balance of experiences, products and services
increased in overall spend by FIT
increased repeat domestic business
optimal utilisation of assets and resources
optimisation of working capital
understanding of the geothermal valley
continued fiscal responsible management
maximise off-season potential

27. Customer satisfaction SFs
seamless service to inbound operators
modern, well maintained assets for visitors
introduction of new services to enhance experience (one to one, information stations, interactive computer displays)
quality guided tours, intimacy with Maori culture

28. Internal Process SFs
increased linkages with key suppliers (millennium hotel etc)
timely maintenance of assets
effective relationships with key players in tourism, and other stakeholders
optimising technology (extranet for inbound information, intranet etc)
successful completion of projects
increased innovation

29. Learning & growth SFs increase in adaptability and flexibility
increase in productivity through increase in skills, motivation, etc
increase in empowerment (delegated decision making)
foreign language capability (Korean etc)
increase in technology savvy
develop knowledge database
increase guide skills, cultural sensitivity & storytelling

30. Employee satisfaction SFs
increase in employee satisfaction
retention of key staff
provide opportunities to grow
establish good life and work balance
appropriate reward and recognition for all
increased recognition (celebrating success)
a pleasant physical work environment for all
active and well supported social club

31. Environment, community SFs
good working relationships with key community organisations (IWI, whaka village, all neighbours)
demonstrate leadership in the community
adoption of green globe 21
linking sponsorship with staff community work
supporting local businesses
favourable reputation in the community

32. Workshop #1 revisiting the success factors of organizations in your sector (see hardcopy)
Please read and follow instructions

33. Phase 2: Holding a two day workshop
planning the workshop
inviting the right people
appropriate location
making sure all attend (invite from the CEO)
use the agenda in the manual
run the 6 workshops
check that proposed CSFs address all the six BSC perspectives
day and half for all, 2 days for the KPI team
utilize material I have put on
Prepared by David Parmenter, waymark solutions limited

34. Suggested attendees
20 to 40 people experienced and knowledgeable staff from all around the organization (operators, administrators, sales staff, production)
selection of management from head office including one or two from the SMT
all KPI project staff
external project facilitator, if you have one
if a couple of pilots are to be run, invite a team from the relevant business units

35. Short listing the CSFs – by relationship mapping
Increase repeat
business
Retention of key staff
4 OUT
Increased
recognition

36. Example of relationship mapping
All teams work with same SF list
Arrows draw in the direction of the relationship
A subjective area, so you cannot be wrong
Compare results

37. Another example of relationship mapping

38. Workshop 2: Airline success factors

39. Feedback of ranking from teams

40. Table for short-listing CSFs

41. Testing that your top 5-8 CSFs link to your strategic objectives
No linkage to strategic objective #4

42. Phase 3: Presentation to the SMT and Board to obtain agreement on the CSFs
prepare with PR help – using emotional drivers
present the top 5 to 8 CSFs
explain the ramifications on measurement
list the 24/7, daily, weekly measures, if any, that are currently being collected in this area
discuss requirement to communicate to employee representatives and staff
ask for permission to proceed to next stage, ( team and organizational measures)
Prepared by David Parmenter, waymark solutions limited

43. Please talk to the person next to you about what I have said
does it make sense?
is it relevant to you?
any areas of confusion

44. Brainstorming performance measures using one of the CSFs
Prepared by David Parmenter, waymark solutions limited

45. Implementing KPIs - a 12 step process

46. What we have learnt
gain an in-depth understanding of the characteristics of KPIs
understand the significance of critical success factors
understand how KRIs,PIs,RIs & KPIs fit together
how to brainstorm measures from a critical success factor

47. CSFs help reporting measures in
the board dashboard – the KRIs
daily / weekly KPI reporting
team scorecard reporting
organizational scorecards
reporting progress to staff
the staffs’ own performance agreements
see other ‘better management’ presentations I have delivered for examples of these

48. Suggested next steps
read my paper on – it is free to access
acquire the book “Key Performance Indicators – developing, implementing and using winning KPIs”
ban further development of measures until the CSFs have been agreed
hold the two day CSFs workshop (may need a facilitator)
listen to my other web casts
attend my KPI master class if you are to be in the KPI project team (see
Prepared by David Parmenter, waymark solutions limited

49. These books came out in 07
to order, see link to
Prepared by David Parmenter, waymark solutions limited

50. Thank you for investing the time
Prepared by David Parmenter, waymark solutions limited

51. John Wiley & Sons have published
Amazon link on
Prepared by David Parmenter, waymark solutions limited 51 51