Jenster Using Critical Success Factors in Planing
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Transcript of Jenster Using Critical Success Factors in Planing
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8/18/2019 Jenster Using Critical Success Factors in Planing
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Lo ng Ra ng e Planning, Vol. 20, No . 4, pp. 102 to 109, 1987 0024-6301/87 S3.00 +.0()
Printed in Grea t Britain Perg am on Journals Ltd.
U sin g rit ical Success F actors in
Planning
Pe r V Jen s ter
This ar tic le in t roduce s a s t rategy p lan nin g and st rategic con tro l
process w hich is . t ight ly in tegrated wi th the f i rm s in form at ion
system. The approach is d esigned to a id d i rectors and senior
managers in execu t ing and mo ni tor ing thei r s trategies. O n the
basis o f th is research, the a uthor prov ide s a de ta i led descr ip-
t i on o f th i s me thod fo r deve lop ing , mon i to r ing a nd in tegra t ing
cr i t ica l in form at ion in to ef fect ive s t rategic manag eme nt deci -
s ion suppor t. This design meth od incorporates n ine steps: (1)
r o v i d e
s t r u c t u r e
for des ign process; (2) Determine general
f o r c e s i n f l uenc ing s t ra tegy ; (3 ) Deve lop a
s t r t e g i c p l n
or
rev iew/m od i f y the cu r ren t p lan ; (4 ) Iden t i f y a se lec ted numbe r
o f
c r i t i c l
s u c c e s s f a c t o r s
(CSFs) ; (5 ) De te rmine
w h o i s
r e s p o n s i b l e for wh ich c r i t ica l areas; (6) S elect
t h e
s t ra t e g ic
p e r f o r m a n c e i nd i ca to rs (SPIs ) ; (7 ) Deve lop and in tegra te
p p r o p r i t e r e p o r t i n g
procedures ; (8 ) Imp lem ent and in i t ia te
s y s t e m u s e
by the senior person nel ; (9) Establ ish
e v l u t i n g
p r o c e s s a n d p r o c e d u r e s . Through appropr iate in t roduct ion,
th is approach can create an in tegrated st rategic context w i th in
wh ich top m anagement and key personne l can execu te
t h e
st rategy and m ainta in a com pet i t ive advantage for thei r fi rm.
S u c c e ss f ul s t r a te g y d e v e l o p m e n t a n d i m p l e m e n -
t a t i o n r e li e s o n t h e q u a l i t y o f t h e a v a i l a b l e i n f o r m a -
t i o n . F u r t h e r , t h is i n f o r m a t i o n i s o f t e n s e e n as a v i t a l
r e s o u r c e w h i c h c a n m a k e o r b r e a k a f i rm s c h a n c e o f
s u c ce s s. T h e a v a i l a b i li t y o f i n f o r m a t i o n t o s e n i o r
m a n a g e r s , h o w e v e r , is u s u a l ly n o t t h e p r o b l e m . O n
t h e c o n t r a r y , t h e y a r e g e n e r a l ly i n u n d a t e d w i t h
d a t a . 1
T h u s , i n th is in c r e a s in g l y c o m p l e x a n d i n f o r m a t i o n -
o r i e n t e d w o r l d , t h e m a i n c h a l l e n g e c o n f r o n t i n g
m a n a g e r s i s t h e id e n t i f i c a t io n , s e l e c t io n a n d m o n i -
t o r i n g o f i n f o r m a t i o n w h i c h is r e la t e d t o t h e
s t r a te g ic p e r f o r m a n c e o f th e c o m p a n y ) A l so , t he
r ig h t in f o r m a t i o n r e q u e st e d an d c o m m u n i c a t e d b y
t h e m a n a g e r s w i l l h e l p s ha p e t h e w a y i n w h i c h o t h e r
m e m b e r s o f t h e o r g a n i z a t i o n d e f i n e t h e ir t as k s,
i n t e r p r e t t h e f i r m s s t r a t e g y , a n d d e t e r m i n e w h a t is
i m p o r t a n t a n d w h a t i s n o t .
Dr. Per V . Jenster is an Assistant Professor a t the M clnt ire School of
Comm erce Univers ity of V irginia .
A leasing f i rm recent ly brought in a new president . The
previous manager had received sum ma ry repor ts f rom
several accounting systems which were considered state-of-
the-art . T he new president identified the firm s spread (i .e. ,
the difference betw een the firm s cost of funds and the firm s
yield on an annualized basis) as one o f his prima ry concerns.
Ho we ver , n ot on ly was th is f igure not avai lable in current
reporting, the data required to provide the spread figure
resided in external as well as internal databases. Once the
reporting was realigned, a key measure replaced and/or
supplemented multiple reports.
M ore imp ortant, consider the strategy implications o f the
new margin f igure, as com pared to the previous segmented
reporting. The single measure provided the president with
the pulse of the f irm on a week ly basis . Thus, he was able to
hav e a generalized feel for the firm s exposure, its position
v i s a v i s othe r firms, and trends indicating the need for asset
or liability repositioning. Add itionally, he no longe r was
requi red to analyze mul t ip le repor t ing sources, except when
conditions warranted accessing the detailed information.
T h i s a r t i c l e i n t r o d u c e s a n i n f o r m a t i o n - b a s e d
a p p r o a c h t o s t r a te g y d e v e l o p m e n t a n d c o n t r o l
w h i c h c a n a id m a n a g e r s i n t u r n i n g t h e i r s t ra t e g ie s
i n to a c t io n . T h e a u t h o r p r o v i d e s a m e t h o d f o r
d e s i g n in g a p l a n n i n g a n d c o n t r o l p r o c e ss w h e r e b y
c r u c i a l i n f o r m a t i o n c a n b e id e n t i f ie d , o r g a n i z e d ,
e v a l u a te d a n d c o m m u n i c a t e d in a m a n n e r w h i c h
s u p p o r t s e x e c u t i o n o f th e s t r a te g i c p l a n .
I I n f o r m a t i o n F o c u s e d o n F a c to r s
I n f l u e n c i n g S t r a t e g i c S u c c e s s
A n i n c r e a si n g ly p o p u l a r a p p r o a c h f o r i d e n t i f y in g
s t r a t e g ic a l l y r e l e v a n t i n f o r m a t i o n i s t h r o u g h t h e
c r i t ic a l s u c c e s s f a c t o r m e t h o d . 3 C r i t i c a l s u c c e s s
f a c t o r s ( C S F s ) a re e v e n t s , c o n d i t i o n s , c i r c u m s t a n c e s
o r a c t iv i t ie s . S p e c i f i c a l l y , t h e y a r e t h e l i m i t e d
n u m b e r o f a re a s in w h i c h r e su lt s, i f t h e y a r e
s a t i s fa c t o r y , w i l l e n s u r e s u c c e s s f u l c o m p e t i t i v e p e r -
f o r m a n c e f o r t h e o r g an i z a ti o n . 4 T h e s e f a c t o r s m a y
a l s o r e s u l t f r o m :
-
8/18/2019 Jenster Using Critical Success Factors in Planing
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U s i n g C r i t ic a l S u c ce s s F a c t o rs i n P l a n n i n g 1 0 3
T h e o u t c o m e o f e x te r n al e v e n t s w h e n t h e re is
r i sk e x p o s u r e ( e . g. , p o l i t ic a l d e v e l o p m e n t i n
So uth Af r i c a ) ;
T h e a c h i e v e m e n t s o f o n e o r m o r e i n d i v id u a l s ,
s u c h as m e m b e r s o f a p a r ti c u la r e n g i n e e r i n g
p r o j e c t ; o r
k T h e i n t e r n a l o p e r a t i n g p r o c e s s ( e . g . , a t t a i n i n g
b e t t e r q u a l i t y o r d e c r e a s i n g t h e d e f a u l t r a te ) .
Thus , c r i t ica l success fac tors re la te to the bas ic
i n t e r n a l o r e x t e r n a l c o n d i t i o n s fo r t h e f i r m ' s s t r a t e g y
( e .g . , c u s t o m e r a c c e p ta n c e , c o m p e t i t i v e m o v e s ) , o r
t h o s e c o m p e t e n c i e s o r r e s o u r c e s (e . g. , h u m a n ,
f i na nc i a l ) i t m us t a t t a in .
i d e n t i f y i n g th e a r ea s w h i c h ' m u s t g o r i g h t ', b u t
a s s u m e s a p o w e r f u l s t r a t e g i c r o l e i n w h i c h t h e
s p ec if ic ef fo r ts o f t o p m a n a g e m e n t a n d t h e
e m p l o y e e s a re j o i n e d a n d a l i g n e d in a m a n n e r
c o n s i s t e n t w i t h t h e f i r m ' s v i s i o n .
I n s u m m a r y , t h e f a c t o r s i d e n t i f i e d a s e s s en t ia l t o t h e
o r g a n i z a t i o n ' s s uc ce ss s e r v e a s t h e p r i m a r y i n t e g r a t -
i n g m e c h a n i s m b e t w e e n m a n a g e m e n t ' s l o n g - r a n g e
g o a l s a n d t h e c h a n n e l l i n g o f r e s o u r ce s a n d e x e c u t i v e
a t t e n t i o n . E x p l i c i t r e c o g n i t i o n a n d u s e o f su c h
c r i t i c a l suc c e ss f a c to r s p r ov ide s , t he r e f o r e , a p l a n-
n i n g p r o c e s s /s y s te m t h r o u g h w h i c h s t r at e g y f o r m u -
l a t i o n c a n b e m a d e o p e r a t i o n a l a n d c o n t r o l l e d
w i t h i n t h e f i r m , a s d e p i c t e d i n F i g u r e 1 .
R e c e n t r e s e a r c h h a s e x p a n d e d t h i s n o t i o n i n t o a
m o r e c o m p r e h e n s i v e an d s t r a te g i c c o n c e p t, s u g g e s t -
i n g t h a t t h e d e f i n i t io n a n d m o n i t o r i n g o f cr it ic a l
suc c e ss f a c to r s d i f f e r s f o r va r ious s t r a t e gy t ype s? A
s t u d y o f 12 8 fi rm s i n m a t u r e m a n u f a c t u r i n g
i n d u s t r i e s f o u n d a n u m b e r o f i n t e r e s t i n g r e s u h s . 6 I n
pa r t i c u l a r , t h i s r e se a r c h i nd i c a t e s t ha t t he f i r m s
w h i c h h a d a h i g h e r r e t u r n o n e q u i t y :
( 1) f o r m a l ly i de n t i f i e d t he i r c r i t ic a l suc ce ss f a c to r s ;
( 2 ) u s e d t h e s e f a c t o r s t o m o n i t o r t h e i r p r o g r e s s i n
t h e i m p l e m e n t a t i o n o f s t r at e gi c c h a n g e s ;
(3 ) b e n e f i t e d f r o m f o r m a l l y i n t e g r a t e d r e p o r t i n g
a n d i n f o r m a t i o n s y s t em s .
O t h e r s h a v e f o u n d t h a t c r it ic a l s u cc e ss f a ct o rs , w h e n
f o r m a l l y i d e n t i fi e d , i m p l i c i t ly c o m m u n i c a t e t h e t o p
m a n a g e m e n t ' s p r i or it ie s a n d t h e r e b y d i r e ct o r g a n i z -
a t i o n a l e f f o r t s i n t h e d e s i r e d d i r e c t i o n 5 M o r e
s p e c if ic a l ly , t h e d e s i r e d d i r e c t i o n is a t t a in e d t h r o u g h
t h e m o t i v a t i o n o f t h e o r g a n i z a ti o n ' s e m p l o y e e s .
P r o v i d e d w i t h a f r a m e w o r k a g ai ns t w h i c h t h e y c a n
m a k e s e n s e o f p r io r i t ie s , a s s u m p t i o n s a n d e n v i r o n -
m e n t a l c o n d i t i o n s , t h e e m p l o y e e s a re t h e n a b le t o
b e t t e r c o n t r i b u t e t o t h e e x e c u t i o n o f l o n g - r a n g e
plans .
E x a m p l e : C o n s i d e r a c o m p a n y w h i c h v i e w s t he i n t r o d u c -
t ion o f ne w pro duc t s a s one o f i ts c r i ti ca l success fac to r s .
B e y o n d c o m m u n i c a t i n g t h a t t o p m a n a g e m e n t v i e w s t h e
o r g a n i z a t i o n s f u t u r e a s h i n g i n g u p o n b e i n g a p r o d u c t
i n n o v a t o r , t h i s c l e a r l y c o n v e y s t o i n d i v i d u a l s w h e r e t h e i r
m o s t s i g n i fi c a n t c o n t r i b u t i o n c a n b e m a d e . M o s t m e m b e r s
o f m a n a g e m e n t a r e s tr o n g l y m o t i v a t e d t o e x c e l i n r el a t io n
t o t h e e x p e c t a t i o n s o f c o r p o r a t e l e a d e r sh i p . T h e y w i l l a d a p t
t o m e e t t h o s e ex p e c t a t io n s p r o v i d e d t h a t t o p m a n a g e m e n t s
w i s h e s ar e c le a r l y a n d c o n s i s t e n t ly c o m m u n i c a t e d . E f f e c t i v e
leadersh ip necess i t a tes the c lea r de f in i t ion o f success fac to r s ,
t h e i d e a l o r g a n i z a t i o n a l p e r f o r m a n c e i n r e l a t i o n t o t h e m ,
a n d t h e e x p l i c i t c o m m u n i c a t i o n o f t h e s e f a c t o r s to a ll
a p p r o p r i a t e l e ve l s o f m a n a g e m e n t i n a s tr u c t u r ed m a n n e r .
I n a d d i t io n t o p r o v i d i n g a b r i d g e b e t w e e n t h e f i rm ' s
o b j e c ti v e s a n d m a n a g e m e n t ' s s t r at e g y , t h e i s o l a ti o n
of c r i ti c a l fa c to r s a l so p r o v id e s a ve h i c l e fo r t he
d e s i g n o f a n e f fe c t iv e s y s te m o f p e r f o r m a n c e
m e a s u r e m e n t a n d c o n t r o l. T h i s w a y , t h e d e s ig n o f
c r i t i c a l s u c c e s s f a c t o r s b e c o m e s m o r e t h a n j u s t
T o p M a n a g e m e n t •
S t r a te g i c I n f o r m a t i o n S y s t e m
fo r
In teg ra ted P l ann i ng and C on t ro l
V i s i on
a n d
S t ra tegy
P r o je c t la n s l
B u d g e t s
c t i o n
. I D i v i s i ona l /D epa r tm en ta l L
M a n a g e r s a n d S u b o r d i n a t e s
F i g u r e 1 . A n i n f o r m a t i o n ' b r i d g e ' f o r m a k i n g
s t r a t e g y o p e r a t i o n a l
II A n O v e r v i e w o f t he D e s i g n
P r o c e s s
T h e d e s i g n p r o c e d u r e s f o r a s t r a t e g i c p r o c e s s a n d
i n f o r m a t i o n s y s t e m f o r i n t e g r a t i n g p l a n n i n g a n d
c o n t r o l a r e s h o w n i n F i g u r e 2 a n d d i s c u s s e d o n t h e
f o l l o w i n g p ag e s . T h i s a p p r o a c h is b a s e d o n t h e i d e a
t h a t t h e e x e c u t i v e m u s t f o c u s o n f a c to r s m o s t v i t a l t o
t h e o r g a n i z a t i o n ' s s u c c e s s a n d t h e n m a n a g e b y
D e s i g n i n g a S t r a t e g i c I n f o r m a t i o n
S y s t e m :
P r o c e d u r a l G u i d e
Prov ide St ruc ture for Des ign Process
Determ ine Genera l Fo rce s-- Audi t o f Ex terna l and In terna l Fac tors
St ra tegy Formulat ion
Identi fy C ri tical Success Factors
Determine W ho i s Respons ib le
Select Strategic Perform ance Indicato rs
Deve lop and In tegrate Report ing Procedures for S t rateg ic Mo ni tor ing
Implement and Ini t iate System Use
Evaluat ion o f P lans Process and Sys tem
F i g u r e 2 . D e s i g n i n g a s t r at e g ic i n f o r m a t i o n
s y s t e m
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104
L o n g R a n g e P l a n n i n g V o l . 2 0
A u g u s t 1 9 8 7
c r e a t i n g a c o n t e x t w i t h i n w h i c h o t h e r s a r e a b l e t o
a l i g n t h e i r e f f o r t s a c c o r d i n g l y . T h e m e t h o d i n c o r -
po ra t e s n i ne s t eps :
( 1 ) P r o v i d e s t r u c t u r e f o r t h e d e s i g n p r o c e s s .
(2 ) D e t e r m i n e g e n e r a l e l e m e n t s w h i c h w i l l
i n f l uen ce s uccess .
(3 ) D e v e l o p a s t ra t e g ic p la n o r r e v i e w / m o d i f y t h e
c u r r e n t p l a n .
( 4 ) I d e n t i f y a s e l e c t e d n u m b e r o f c r i t i c a l s u c c e s s
fac t o r s (C S F s ) .
( 5 ) D e t e r m i n e w h o i s g o i n g t o b e r e s p o n s i b l e f o r
w h a t .
( 6) S e l e c t th e s t r a te g i c p e r f o r m a n c e i n d i c a t o r s
(SPls ) .
( 7 ) D e v e l o p a n d e n a c t a p p r o p r i a t e r e p o r t i n g p r o -
c e d u r e s .
(8 ) I n i ti a te u se o f p r o c e d u r e s b y m a n a g e r i a l p e r s o n -
nel .
( 9) E s t a b l is h e v a l u a t i o n p r o c e d u r e .
T h e d e s i g n m e t h o d s e r v e s a s t h e m e a n s f o r t o p
m a n a g e m e n t t o c r e a t e a n d i d e n t i f y e s s e n t i a l s t r a t e -
g i c e l e m e n t s , m a k e u s e o f i n f o r m a t i o n r e l e v a n t t o
s u c c e s s , a l i g n r e w a r d s a n d i n c e n t i v e s , a n d r e a c h
s t ra t e g ic g o a ls . M o r e i m p o r t a n t , h o w e v e r , i t is t h e
m e a n s f o r c r e a t i o n o f a st rategic context f o r t h e f i r m .
O n t h e s u r f a c e , t h i s d e s i g n m a y n o t a p p e a r t o b e
n o v e l o r u n i q u e . A f t e r a l l , p l a n n i n g a n d c o n t r o l
s y s t e m d e s i g n h a s n o t u n d e r g o n e m a j o r c h a n g e s i n
t h e la s t 15 y e a r s o r s o . It is a r g u e d , h o w e v e r , t h a t t h e
i n t e g r a t i o n o f th e p l a n n i n g a n d c o n t r o l p r o c e ss e s
t h r o u g h t h e d e si g n o f a n i n f o r m a t i o n - b a s e d c o n t e x t
c a n b e t te r a i d m a n a g e r s i n d e f i n i n g a n d i n t e r p r e t i n g
e n v i r o n m e n t a l e v e n t s a n d c h a n g e s . I n o t h e r w o r d s ,
w e c a n s a y t h a t t h i s a p p r o a c h e n a b l e s t o p m a n a g e r s
t o p r o v i d e a s e t t i n g i n w h i c h o t h e r s c a n i n t e r p r e t
i n f o r m a t i o n a n d a d a p t t h e i r r o l e s t o m e e t t h e
o b j e c ti v e s o f th e f i r m . T h u s , t h e d e s i g n p h i l o s o p h y
i s t h a t t h e s t r a t e g y f o r m u l a t i o n a n d t h e p l a n
e x e c u t i o n c a n n o t b e t r e a t e d a s t w o s e p a r a t e i s s u e s .
M o d e r n s t ra te g ic m a n a g e m e n t m u s t v i e w t h e
s t r a t e g ic p l a n n i n g p r o c e s s a n d t h e s y s t e m f a c i l it a t in g
i m p l e m e n t a t i o n a s i n t e r re l a t e d .
I II D e s i g n i n g a S t r at e g ic
I n f o r m a t i o n S y s t e m
T h i s s e c t i o n c o n s is ts o f a d e t a i l e d d i s c u s s io n o f e a c h
o f t h e n i n e s te p s i n t h e d e s i gn a n d i m p l e m e n t a t i o n
p roces s ( s ee F i gu re 2 ) .
S t ep 1 . S truc t ure t he De s i gn P rocess
B e f o r e e n g a g i n g i n t h e p l a n n i n g d e s i g n p r o ce s s a n d
t h e a c t ua l p l a n n i n g , i t is i m p o r t a n t t o d e t e r m i n e
w h o i s r e s p o n s i b l e f o r o v e r s e e i n g t h e s p e c i f i c s t e p s
a n d t h e p l a n n in g o u t c o m e .
I n m o s t c a s e s , i t i s r e c o m m e n d e d t h a t t h e c h a i r m a n /
C E O d e s ig n a t es a s t e er i n g c o m m i t t e e t o o v e r s e e th e
w h o l e p r o c e s s . T h e s t e e r i n g c o m m i t t e e s h o u l d
i n c l u d e s e le c te d m e m b e r s o f t h e b o a r d , t h e p r e si -
d e n t , p l u s t h e v i c e p r e s i d e n t o f p l a n n i n g . T h i s
p r i m a r y c o m m i t t e e m u s t a r t ic u l a te t h e f i r m s
o b j e c t i v e s a n d , i n t u r n o v e r s e e , a n d r e c e i v e r e p o r t s
f r o m s e c o n d a r y c o m m i t t e e s c o n s is t in g o f l o w e r
l e v el e m p l o y e e s . T h e s e c o n d a r y c o m m i t t e e s w i l l b e
s e l ec t ed t o t ack l e t he s pec i f i c s t ep s and i s s ues i n t he
d e s i gn p r o c e s s o u t l i n e d b e l o w .
S t e p 2 . D e t e r m i n e t h e E l e m e n t s I n f l u e n c i n g S u c c e s s
T h e f ir s t st e p i n t h e p l a n n i n g p r o c e s s is t o a u d i t t h e
f o r c e s w h i c h a r e r e l e v a n t t o t h e f i r m s p r e s e n t a n d
f u t u r e p o s i t i o n . S t r a t e g i c a r ea s 8 m a y i n c l u d e :
G e n e r a l e n v i r o n m e n t . F a c t o r s w h i c h i n f l u e n c e t h e
f i r m a n d o v e r w h i c h i t h a s n o c o n t r o l . I n c l u d e d
h e r e m a y b e i s s u e s s u c h a s g e n e r a l s o c i o d e m o -
g r a p h i c t r e n d s , i n t e r e s t r a t e s , e x c h a n g e r a t e
f l uc t ua t i ons , e t c .
Industry characteris t ics . F e a t u r e s o f t h e f i r m s
i n d u s t r y a n d r e l a t e d i n d u s t r i e s . I n g e n e r a l , i t
a p p e a rs t h a t e a c h i n d u s t r y h a s a s et o f c o m m o n
d i m e n s i o n s t o w h i c h i n d i v i d u a l f i r m s n e e d t o
a d h e r e . F o r e x a m p l e , s u p e r m a r k e t c h a i n s w i l l
h a v e o n e s et o f d y n a m i c f a c to r s a n d b a n k s
a n o t h e r .
~r Co m pet i t i ve f o rces . P o s t u re s o f c o m p e t i t o rs , s u p -
p l i e r s , c u s t o m e r s , p o t e n t i a l n e w e n t r a n t s a s w e l l
a s t h o s e e l e m e n t s w h i c h f i r m s f o l l o w i n g s i m i l a r
s t r a t eg i es i n r e l a t ed i ndu s t r i e s need t o be a l e r t t o .
T h e s e m a y i n c l u d e c e r t a i n q u a l i t y s t a n d a r d s ,
p r o d u c t m i x , c o s t c o n t r o l , e t c .
~r Company- spec i f i c charac t er i s t i cs . F a c t o r s d e r i v e d
f r o m t h e u n i q u e a s p ec t s o f a p a r t ic u l a r f i r m s
com pe t i t i ve pos i t i on ( i . e . , i t s s t r eng t h s and
w e a k n e s s e s a s w e l l a s o p p o r t u n i t i e s a n d t h r e a ts ) ,
t ra it s o f th e m a n a g e m e n t t e a m , a n d / o r t i m e
e l e m e n t s .
Persona l va l ues o f key p l aye rs . T h e d e m a n d ,
w i s h e s , n e e d s a n d c a p a b i li t ie s o f k e y p l a y e r s ,
e x e c u t i v e s a n d o t h e r p e r s o n n e l m u s t b e e x a m -
i n e d . F o r e x a m p l e , t h e p e r s o n a l p r e f e r e n c e s o f
t h e m a j o r s t o c k h o l d e r s s h o u l d n o t b e n e g l e c t e d .
i~ Resource avai labi l i ty .
Av ai l ab i l i t y o f f inanc i a l , a s
w e l l a s p h y s ic a l a n d h u m a n r e s o u rc e s w i l l h a v e
an i m pac t on t he s t r a t eg i c s ucces s .
T h e s e s t r a te g i c c h a r a c t e r is t ic s m a y f o r m t h e b a si s f o r
d e f i n i n g t h e f i r m s s e n s i t i v i ty t o t h e i n f l u e n c e s o r
c h a n g e s a l o n g t h e v a r i o u s d i m e n s i o n s . F i g u r e 3
s h o w s h o w t h e f i r m s s e n s it iv i ty c a n b e e x a m i n e d
u s in g a w e i g h t i n g s c h e m e w h e r e 1 e q u a ls n o e f fe c t,
t o 1 0 , w h i c h i m p l i e s s u b s t a n t i a l o r c r i t i c a l i m p a c t .
T h e I m p a c t G r i d c a n a l so b e u s e d in t h e d e s i g n / r e -
v i e w a n d i n t e g r a t i o n o f a f i r m s s t r a t e g i c p la n s , as
w e l l a s t o a s s e ss r e v e r s i b i l it y o f r e s o u r c e c o m m i t -
m e n t s . M o r e o v e r , t h i s e v a l u a t i o n i s u s e d t o c r e a t e
t h e lis t o f p o t e n t ia l e l e m e n t s f r o m w h i c h m a n a g e -
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8/18/2019 Jenster Using Critical Success Factors in Planing
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U sing Crit ica l Success Factors in Plan ning 1 5
Marketing
.,~.~,c,, .,,9 .~, ¢,- ,~
~ o~ ~,L.~ .~o-
~,~ - x o- x .~ v¢
Personnel
O
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e
I .L
P r o d u c t i o n
Project 1
•~ Pro ject2
O
Product I
~ P r o d u c t II
Goal l
~ G o a l I I
1 = No effect; 10 = sub stantial or crit ical impa ct
F i gu re 3 . As s es s ing a f i rm s vu l ne r ab i l i t y t o i ts
e n v i r o n m e n t - - u s i n g a n I m p a c t G r i d
m en t s e l ec t s t he f i rm s f i ve t o t en c r i t i ca l s ucces s
factors .
T h e d i m e n s i o n s m a y a l s o b e u s e d t o d e v e l o p
a l t e r n a t i v e r e s u l t s c e n a ri o s a n d f o r t h e i d e n t i f i c a t io n ,
a c h i e v e m e n t a n d e v a l u at io n o f m a n a g e m e n t s
o b j e c t iv e s , a s w e l l a s i n t h e s u b s e q u e n t t r a n s f o r m a -
t i on o f i deas i n t o ac t i on . 9
S o m e o f th e i d e n t i f i e d f a c t o r s a ff e c t e d b y t h e v a r i o u s
e l e m e n t s a r e s t ra t eg i c i n n a t u r e , i n t h a t t h e y r e l a t e
d i r e c t l y t o t h e w a y s e n i o r p e r s o n n e l i n t e r p r e t
s i t ua t i ons and ca r ry ou t p l ans . O t he r s ucces s f ac t o r s
a re operat ional a n d n o t n e c e s s a r il y d i r e c t l y u s e f u l t o
t h e t as k s a n d a c t iv i t ie s o f k e y p e r s o n n e l . W h i l e t h e y
a r e i m p o r t a n t t o t h e w a y l o w e r p e r s o n n e l d e fi n e a n d
i n t e g r a te p a r t i c u l a r ta sk s, t h e y m a y r e c e i v e m a n a g e -
m e n t a t t e n t i o n o n a l e s s f r e q u e n t , ad hoc o r b y -
excep t i on bas i s .
S t e p 3 . D e v e l o p o r R e v i e w t he S tr a te g ic P l a n
T h e s e c o n d s t e p is t h e f o r m u l a t i o n o f a l t e r n a ti v e s
a n d t h e c h o i c e o f a s t ra t e g y , o r a t h o r o u g h r e v i e w o f
t h e c u r r e n t s t r a t e g i c p l a n . T h i s s t e p i s c o n c e r n e d
w i t h t h e e v a l u a t i o n o f t h e f i r m s s t ra t e g ic e n d s a n d
m e a n s . T h a t is , t h is s te p m u s t a d d r e s s t h e o r g a n i z a -
t i on s m i s s i on by as k i ng q ues t i ons s uc h as:
W h a t t y p e o f f i r m d o w e w a n t t h e o r g a n iz a t io n
t o b e ?
I O W A F A R M A T I C S I N C .
Bi l l Sobek, founder o f Iowa Farmat ics Inc. ( IF I ) , a
d i s t r ibu t o r and manu f ac t u re r o f f e r t i l ize r sp read ing equ i p -
m e n t w a s p r o p o s i n g t o w i t h d r a w f r o m d a y - t o - d a y
mana geme nt o f the f i rm. The last 15 years had been
marked b y s teady increases in sa les averaging 2 3 per cent .
The success of the f i rm over the years had rested on a
phi losophy based on the pr imacy of customer serv ice.
S ince the per iod for fer t i l i z ing f ie lds i s short , a d isabled
spreader can cost a customer a considerable amount o f
money . A l t hough t he f i rm i n i t i a l l y was a d i s t r ibu t o r and
assembler o f equipm ent , m anagem ent rea li zed that to
insure qu ick response to a custome r s needs for spare
parts , the f i rm had branched out in to the manufactur ing
and exten s ive s tock ing of spare parts . In order to fu l l y
sat is fy custom er needs, the f i rm a lso began design ing and
manufactur ing customized l iqu id sprayers. Unl i ke the
standard ized dry spreaders, these l iqu id spreaders are
made to customer speci f i cat ion. Because of the un ique
nature of l i qu id spreaders, these uni ts take considerable
amounts of t ime to des ign and manufacture.
W h i l e m os t p roducers o f f a rm ma ch i ne ry were hu r t ing i n
1984 , t he f i rm was s t ra i n i ng capac i t y and p l ann i ng f o r
fu ture gro wth became essent ia l . The prospect o f expa nd-
ing sa les of l i qu id sprayers in to s ta tes outs ide the present
market area looked very favorable. A l though Bi l l Sobek
desi red gro wth for the f irm, he recognized the need for any
g row t h t o be con t ro l led . Ad d i t i ona l l y , he des ired t ha t even
w i t h f u t u re g row t h o f t he fi rm h i s persona l i nvo l vem en t
wo uld be s ign i f i cant ly reduced. I t was c lear that the fu ture
g row t h s t ra tegy requ ired an i mproved mo n i t o r i ng sys t em
and management s t ructure.
The Impact G r id depic ted in Table 1, exemp l i f ies the
re l a t i onsh i ps be t ween deve l opmen t s i n some o f t he
cr i t i ca l success factors and e leme nts of Sobe k s s t ra tegy
for IFI .
W h a t t y p e o f ac t iv i ti e s d o w e w a n t t o e n g a g e
m ?
W h a t m a r k e t s d o w e w a n t t o p u r s u e ?
A l t h o u g h t h es e q u e s ti o n s s o u n d s i m p l e a n d s t r a ig h t -
f o r w a r d , i t is t h e a u t h o r s o b s e r v a t i o n t h a t i t c a n b e a
l o n g a n d t e d i o u s a f f a i r w h i c h i s v a l i d a t e d b y t h e
e x p e r i e n c e o f m a n a g e r s w h o h a v e a c t u a l l y g o n e
t h r o u g h t h i s p r o c e s s . I n a d d i t i o n , t h e a s s o c i a t e d
o b j e c t i v e s m u s t b e c l e a r l y d e f i n e d , t h e g o a l s r e l e v a n t
a n d a t t a in a b l e , a n d a se t o f a lt e r n a t iv e s m u s t b e
i d e n t i f ie d . I n t h is s t ep , t h e f i r m s c u r r e n t p l a n s m a y
a l s o b e r e v i e w e d t o i n s u r e c o n s i s t e n c y a m o n g
a n t ic i p a t ed e n v i r o n m e n t a l t h r e a ts a n d o p p o r t u n i t i e s
a n d t h e f i r m s i n t e r n a l c a p a b il it ie s .
S t ep 4 . Iden t i f y Cr i t i ca l Success Fact ors
C r i t i c a l s u c c e s s f a c t o r s a r e t h o s e l i m i t e d n u m b e r o f
f a c t o r s i m p o r t a n t t o s t r a t e g i c s u c c e s s . T h e y a r e t h e
l im i t e d n u m b e r o f ar ea s w h i c h m u s t b e m o n i t o r e d
t o e n s u r e s u c c es s fu l e x e c u t i o n o f t h e f i r m s s t r a te g i c
p r o g r a m s . T h e s e f a c t o r s c a n b e u s e d t o g u i d e a n d
m o t i v a t e k e y e m p l o y e e s t o p e r f o r m i n t h e d e s i r e d
m a n n e r , a n d i n a w a y w h i c h w i l l e n su r e s u cc e ss fu l
p e r f o r m a n c e t h r o u g h o u t t h e s t r a t e g y .
T h e u s e o f t h e se f a c t o r s in d i s c u ss i on s a n d p l a n n i n g
w i t h i n t h e f i rm w i l l c l e a r ly a n d s u c c in c t ly c o m m u -
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106 Long Range Planning Vol. 20 August 1987
Table 1. An Impact Grid for Iowa Farmatics Inc.
I n t r o d u c t i o n o f
l i q u i d s p r e a d e r D i s r u p t i o n o f
b y c o m p e t i t io n p a r ts s u p p l y
S e c u r i n g
d i s t r i b u t o r s D e c e n t r a l i z a t io n E x p a n s i o n o f
i n n e w m a r k e t s o f m a n a g e m e n t f a c i l it i e s
Marke t i ng .
D i s t r i b u t i o n 1 0 2 1 0 1 4
P r o m o t i o n 1 0 8 2 1 1
Personnel .
D e s i g n 1 0 2 1 1 5
M a n a g e m e n t 8 6 1 1 0 8
P r o d u c t i o n 8 4 1 1 8
P r o d u c t i o n :
A s s e m b l y d r y s p r e a d e r s 1 1 0 1 1 1 0
D e s i g n l i q u i d s p r e a d e r s 1 0 1 1 1 1 0
M a n u f a c t u r e s p a r e p a r t s 1 1 0 6 1 1 0
Pro jects
P l a n t c o n s t r u c t i o n 7 1 6 1 1 0
P roduc t s :
D r y s p r ead e r s 1 1 2 1 8
L i q u i d s p r e a d e r s 1 0 1 8 1 8
Goals.
C o n t r o l le d g r o w t h 5 1 7 1 1 0
R e d u c e d t i m e c o m m i t
C E O 1 2 3 1 0 2
C u s t o m e r s e r v i c e 1 1 0 3 3 7
1 = L i t t le or no impac t 10= Sub s tant i a l o r c r i t i c l impact
nicate critical elements of the strategy to members o f
the organization. More important, the CSFs direct
the attention of key managers to focus on the basic
premises of the firm's strategy. The selection of
proper strategic dimensions is essential, inasmuch as
they will serve as motivation for those whose
performance is being measured. Thus, the critical
success factors must:
(1) reflect success of the defined strategy;
(2) represent the founda tion of this strategy;
(3) be able to motivate and align the managers as
well as other employees and
(4) be very specific and/or measurable.
A manufacturer of cutting tools has as its major
strategic theme 'Shipping of orders within
24 hours'. The board of directors identified timeli-
ness of shipments, and industry marke t share as two
of their critical success factors.
S t ep 5 D e t e r m i n e W h o i s R es p o n s i b l e
Most organizations rely on the actions of a relatively
small number of key people whose functions are
vital to a strategic plan's implementation. It is
important, once the critical success factors have been
determined, that these individuals be identified and
properly motivated to achieve the strategic ends.
The identification of key people is accomplished by
analysing the critical success factors and selecting the
individuals whose efforts apply to a particular
factor. Key personnel include those employees
ultimately responsible for achieving the particular
strategic dimension or goal, plus other individuals
designated to undertake specific major steps to deal
with the critical dimension. The following simpli-
fied example illustrates how key personnel and
critical success factors were ident ified and matched
by management of a manufacturing company
attempting to implement a 'low cost strategy'.
A OSHA standard
Legal Council
Vice President of Operation
Plant Superintendent
Service Engineer
Customer services
Vice President of Sales & Marketing
Manager of Distribution
Managers of Production Planning
Managers Service Department
~ Manufacturing costs--reduction by 22 per cent
Vice President of Operations
Chief Cost Accountant
Plant Superintendents
Managers of Production Planning
/~ New 'low-priced' products
Vice President of Sales & Marketing
Senior Market Analyst
Manager of Product Development
A Sales growth of 17 per cent
Vice President of Sales & Marketing
Manager of Advertising
Four Senior Salesmen
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U s i n g C r i t i c a l S u c ce s s F a c t o rs i n P l a n n i n g 1 0 7
W o r k F o rc e D e v e l o p m e n t
V i c e P r e s i d e n t o f P e r s o n n e l
M a n a g e r o f T r ai n in g a n d D e v e l o p m e n t
T w o F o r e m e n
U n i o n R e p r e s e n t a t i v e
I t s h o u l d b e n o t e d t h a t b e c a u s e s o m e c r i ti c a l f a c to r s
a r e l o n g r a n g e i n n a t u r e , d i f f e r e n t k e y i n d i v i d u a l s
m a y b e i d e n t i f i e d o v e r t i m e a s c o n d i t i o n s c h a n g e .
W h i l e m o r e t h a n o n e i n d i v id u a l m a y b e d e s i g n a te d
a s r e s p o n s i b l e f o r t h e a c h i e v e m e n t o f a c r it ic a l
f a c t o r , e a c h i n d i v i d u a l t y p i c a l l y h a s a p p r o p r i a t e
s t r a t e g i c p e r f o r m a n c e i n d i c a t o r s o r r e s p o n s i b i l i t i e s
a s s ig n e d so t h a t h is p e r f o r m a n c e c a n b e m o n i t o r e d
se pa r a t e ly , a s d i sc usse d i n t he f o l l o w in g se c t i on .
T h i s a n a l y si s o f k e y i n d i v i d u a l s m a y a ls o h i g h l i g h t
c e r ta i n o r g a n i z a t io n a l p r o b l e m s . F o r e x a m p l e , t h e
ind iv idua l s s e l e c t e d t o f u l f i l l c e r t a in r e spons ib i l i t i e s
m u s t h a v e a u t h o r i t y a n d r e s o u r c e s t o t a k e t h e
n e c e s s a r y s t e p s r e q u i r e d f o r t h e s u c c e s s f u l i m p l e -
m e n t a t i o n o f th e s t ra t eg y . T h i s a u t h o r i t y s h o u l d b e
c l e a r l y a r t i c u l a t e d t o m a t c h a c c o u n t a b i l i t y . A n y
o r g a n i z a t i o n a l p r o b l e m s w h i c h e x i s t s h o u l d b e
e x p l i c i t l y a d d r e s s e d .
Step 6 Select Strategic Performance Indicators
Cri t ica l success fac tors a re a lso the bas is for
i d e n t i f y i n g t h e S t r at e g ic P e r f o r m a n c e I n d ic a t o rs
( S P I s ) u s e d i n m e a s u r i n g t h e s h o r t - t e r m p r o g r e s s
t o w a r d t h e l o n g - t e r m o b j e ct iv e s . T h e S P Is a re t h e
i n d i c a t o r s s p e c if i ca l ly u s e d t o m e a s u r e a n d m o n i t o r
k e y i n d i v i d u a ls s h o r t - t e r m p r o g r e s s t o w a r d a c h i e v -
i n g g o o d p e r f o r m a n c e a l o n g a c r i t i c a l d i m e n s i o n .
S t r a t e g i c P e r f o r m a n c e I n d i c a t o r s p r o v i d e m o t i v a -
t io n a l i n fo r m a t i o n w h i c h m u s t b e e x p l ic i t e n o u g h
t o a l l o w m a n a g e r s t o u n d e r s t a n d h o w t h e i r a c ti o n s
i n f l u e n c e s t r at e g i c su cc es s, e v e n t h o u g h t h e y m a y
n o t h a v e a fu l l u n d e r s t a n d i n g o f t h e u n d e r l y i n g
s t r a t e g y . T h e i n d i c a t o r s m u s t u l t i m a t e l y b e
a p p r o v e d b y t h e s t e e ri n g c o m m i t t e e a n d t h e b o a r d ,
b u t d e s i g n e d w i t h s i g n i fi c a n t i n p u t f r o m s u b o r d i -
na tes .
S t r a t e g i c p e r f o r m a n c e i n d i c a t o r s m u s t s t r i v e
t
sa t i s f y s i x spe c i f i c a t i ons . T he y shou ld be :
(1) Operat ional T h e y m u s t f o c u s o n a c t i o n a n d
p r o v i d e i n f o r m a t i o n w h i c h c a n b e u s e d f o r
c o n t r o l .
(2) Indicative of desired performance I n d i c a t o r s m u s t
b e m e a s u r e d a g a i n s t a d e s i r e d le v e l o f p e r f o r -
m a n c e .
(3)
Acceptable to subordinates
S u b o r d i n a t e s s h o u l d
h a v e s i g n if i ca n t i n p u t i n t o d e t e r m i n a t i o n o f th e
i n d i c a t o r s d u r i n g t h e d e s i g n / r e v i e w p ro c e ss .
(4)
Rel iab le
M o s t p h e n o m e n a c a n n o t b e m e a s u re d
w i t h p r e ci s io n , b u t c a n b e d e s c r ib e d o n l y w i t h i n
a ra n g e o r a s a d e g r e e o f m a g n i t u d e . I t i s u p t o
t h e s te e ri n g c o m m i t t e e t o t h i n k t h r o u g h w h a t
k i n d o f m e a s u r e m e n t is a p p r o p r ia t e t o t h e f a ct o r
i t is m e a n t t o m e a s u r e .
(5)
Timely
T h i s d o e s n o t n e c e s s a r i l y i m p l y r a p i d
r e p o r t i n g . T h e t i m e d i m e n s i o n o f c o n t r o l s
s h o u l d c o r r e s p o n d t o t h e t i m e s p an o f t h e
e v e n t .
(6) Simple C o m p l i c a t e d s t r a t e g i c p e r f o r m a n c e
m e a s u r e m e n t sy s te m s o ft e n d o n o t w o r k . T h e y
c o n f u s e th e o r g a n i z a t i o n s m e m b e r s , a n d d i r e ct
a t te n t io n t o w a r d t h e m e c h a n ic s an d m e t h o d s o f
c o n t r o l , r a th e r t h a n t o w a r d t h e t a rg e t e d p e r f o r -
m a nc e r e su l t s .
A f t e r b e i n g s e l e c t e d , t h e i n d i c a t o r s s h o u l d b e
a n a l ys e d in t e r m s o f th e i n f o r m a t i o n r e q u i r e d t o
m e a s u r e t h e i r a c h i e v e m e n t . P e r f o r m a n c e i n d i ca t o r s
w i l l g e n e r a l l y r e q u i r e i n f o r m a t i o n f r o m a w i d e
v a r i e t y o f d if f e r e n t s o u rc e s , b o t h i n t e r n a l a n d
e x t e rn a l , i n o r d e r t o e n a b le m a n a g e m e n t t o m o n i t o r
p r o g r e s s i n t h e d i f f e re n t f u n c t i o n a l a r e as o f t h e
o r g a n i z a t i o n .
Step 7 Dev elopm ent of Repo rting Procedures
T he r e a r e t h r e e ba s i c s t e ps f o r t r a ns l a t i ng t he
i n f o r m a t i o n r e q u i r e m e n t s o f a m o d e r n b u s i ne s s i n t o
a f o r m a l i z e d r e p o r t i n g s y s t e m .
(1) Strategic information planning T hi s t a sk a ddr e s se s
t h e d e v e l o p m e n t o f an i n f o r m a t i o n p l a n f o r t h e
m a n a g e m e n t te am . R e m e m b e r t ha t in f o r m a ti o n
c a n be a s t r a t e g i c r e sour c e t o t he f i r m . T he f i r s t
o b j e c t i v e o f t h e p l a n i s to a ss es s t h e g a p b e t w e e n t h e
a v a i l a b l e a n d r e q u i r e d i n f o r m a t i o n t o m o n i t o r t h e
C S F s a n d m e a s u r e ac t ua l p e r f o r m a n c e . T h e s e c o n d
o b j e c t i v e o f t h e p l a n is t o a s se s s t h e a v a i l a b i li t y o f
i n f o r m a t i o n r e l a t e d to t h e o p e r a t i n g s u c c es s f a c to r s
OSFs).
T h e s t r a t e g i c i n f o r m a t i o n p l a n m u s t d e v e l o p a n
a p p r o a c h f o r o b t a i n i n g t h e i n f o r m a t i o n w h i c h i s n o t
i m m e d i a t e l y a v a il a b l e f r o m e x i s t i n g s o u r ce s . S i n c e
i n f o r m a t i o n s y s t em s a r e n o t c r e a t e d i n 1 d a y , a n
i n t e r i m s y s t e m m a y b e i n s ta l le d u s in g s o m e s u r r o -
g a t e i n f o r m a t i o n u n t i l t h e s o u r c e s c a l l e d f o r i n t h e
i n f o r m a t i o n p l a n a r e e s t a b l i s h e d a n d p r o c e d u r e s
c o m p l e t e d .
(2) Prel iminary sys tem des ign plan T h e f u n c t i o n a l
a n d t e c h n i c a l r e q u i r e m e n t s o f t h e r e p o r t i n g s y s t e m
a n d o f t h e n e c e s sa r y h a r d w a r e / s o f t w a r e a re i d e n t i -
f i e d d u r i n g t h e p r e l i m i n a r y d e s i g n p h a s e . T h e
p r i m a r y o b j e c t i v e i s t o b r i n g t o t h e s u r f a c e a l l
a s soc i a t e d de s ign i s sue s p r io r t o t he i ns t a l l a t i on o f
s y s t e m s a n d t h e e s t a b l i s h m e n t o f p r o c e d u r e s . F o r
e x a m p l e W h a t c o n s tr a in t s d o t h e f i r m s e x i s ti n g
d a t a s ys t em s i m p o s e ? C a n t h e b a rr ie r s b e o v e r c o m e
o r d o w e h a v e t o u n d e r t a k e m a j o r r e d e s i g n ?
(3)
Procedure~systems installation plan
T h i s p h a s e
i n v o l v e s t h e d e t a i l e d d e s i g n , i n s t a ll a t io n a n d t e s t in g
o f p r o c e d u r e s a n d s y s te m s . T h e t e c h n ic a l p a r t o f th e
p r o ce s s f o r c o m p u t e r i z e d s y s te m s i n c lu d e s d e v e l o p -
i n g p r o g r a m m i n g s p e ci fi ca ti o n s, d e v e l o p i n g l o g i -
c a ll y st r u c tu r e d p r o g r a m s a n d r e q u i r e d p r o c e d u r e s ;
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L o n g R a n g e P l a n n i n g V o l . 2 0 A u g u s t 1 98 7
t r a i n i n g u s e r p e r s o n n e l ; a n d f u l l y t e s t i n g a n d
c o n v e r t i n g t h e s y s t e m . F o r m a n u a l p r o c e d u r e s , i t is
w o r t h w h i l e t o h a v e t h e i n d i v i d u a l s i n v o l v e d i n
g a t h e r i n g a n d s y n t h e s i z i n g i n f o r m a t i o n c o n d u c t a
t r ia l o n o l d d a t a . A s i m u l a t i o n o r c a s e e x e r c i s e ca n b e
s ucces s fu l l y u s ed .
(5 ) S u c c es s is d e p e n d e n t o n t i m e l y c o m p l e t i o n o f a ll
a s s i g n m e n t s . A n y u n s o l v e d p r o b l e m s o r e m e r -
g e n c ie s m u s t b e r e p o r t e d t o th e C E O o r s e n io r
m a n a g e r w i t h i n 2 4 h o u r s o f d i s c o v e r y . A l l
p r o b l e m s a n d e m e r g e n c i e s ar e to r e c e i v e i m -
m e d i a t e a t t e n t i o n .
In o rde r fo r c r i t i ca l s ucces s f ac t o r s and s t r a t eg i c
p e r f o r m a n c e i n d i c a t o r s to b e o f m o t i v a t i o n a l a s w e l l
a s c o n t r o l v a l u e , t h e y m u s t b e e x p l i c i t l y u t i l iz e d b y
t h e s e n io r m a n a g e r s . T h i s m a k e s s u b o r d i n a t e s a w a r e
t h a t th e m e a s u r e s ar e b e i n g u s e d b y m a n a g e m e n t t o
t r a c k p r o g r e s s a n d p e r f o r m a n c e . T h e c o m p e t i t i v e
e n v i r o n m e n t , t h e f i r m s s iz e , t h e p a r t i c u l a r s t r a t e g y
- - a s w e l l a s t h e m a n a g e m e n t s ty l e w i l l, o f c o u r se ,
d e t e r m i n e w h e n a n d h o w c r it ic a l s uc ce ss fa c to r s a n d
s t r a t e g i c p e r f o r m a n c e i n d i c a t o r s a r e u s e d .
F o r e x a m p le , w h e n B o b R u s s e ll o f G o l d e n W h e e l
C r e a t i o n s I n c . i n t r o d u c e d t h e f i r m s n e w C S F -
r e p o r t i n g s y s t e m , h e e m p h a s i z e d o n e - t o - o n e m e e t -
i n g s w i t h s u b o r d i n a t e s . M o r e o v e r , t h e f i r m r e c o g -
n i z e d h i g h p e r f o r m a n c e a c h i e v e m e n t s o n t h e
b u l l e ti n b o a r d . O t h e r e x e c u t i v e s w e n t f u r t h e r a n d
u t i l i z e d a c o m p u t e r i z e d i n f o r m a t i o n s y s t e m t h a t
i n c l u d e d a c o m m u n i c a t i o n n e t w o r k f o r t h e
m a n a g e m e n t t e a m , a n d d i r e c t i n f o r m a t i o n i n p u t
f r o m k e y c u s t o m e r s . T h e s y s te m a l so a l l o w e d t h e se
c u s t o m e r s l i m i t e d a c c e s s t o t h e s y s t e m .
Step 8 Implem ent Sys tem and Init ia te Sys tem Use
S e v e r a l c r i t e r i a a r e i m p o r t a n t t o s u c c e s s f u l i m p l e -
m e n t a t i o n o f pl an s a n d p r oc e d u r e s. T o p m a n a g e -
m e n t s u p p o r t a n d i n v o l v e m e n t i s e s s e n t i a l . L o w e r -
l e v e l e m p l o y e e s m a y n o t t a k e t h e p l a n o r p l a n n i n g
a n d c o n t r o l e f f o rt s s e r i o u s ly u n l e ss t h e f i r m s t o p
m a n a g e m e n t c l e a r ly d e m o n s t r a t e s i n te r e s t i n th e
a c t iv i ty . T h e r e f o r e , i t is i m p o r t a n t t h a t t o p m a n a g e -
m e n t , w h e n e v e r p o s si b le , a c t i v e ly g u i d e a n d p a r t ic i -
p a t e i n t h e i m p l e m e n t a t i o n . I t is e q u a l l y i m p o r t a n t
t o c r e a t e c o m m i t m e n t o r a t e a m s p i r i t w h i c h w i l l
p u l l p a r t i c i p a n t s t o g e t h e r .
A se t o f i m p l e m e n t a t i o n r e c o m m e n d a t i o n s is
u s e f u l . T h e s e s i m p l e g u i d e l i n e s s h o u l d b e i n t r o -
d u c e d b y t h e C E O o r t h e m o s t s en i or m a n a g e r a t th e
k i c k - o f f m e e t i n g . T h e f o ll o w i n g r e c o m m e n d a -
t i o n s a re e x a m p l e s ; o t h e r s m a y b e c r e a t e d t o s u i t t h e
p a r t i c u l a r s i t u a t io n :
(1) Th i s p ro j ec t and i ts s ucces s be l on g t o a l l
e m p l o y e e s , w i t h n o o n e l e f t o u t ; t h u s , t h e s e
g a m e r u l e s b e l o n g t o a l l i n v o l v e d , l e t s a l l h e l p
t o k e e p t h e m .
(2 ) E v e r y o n e i n v o l v e d m u s t t a k e r e sp o n s i b il i ty a n d
d e m o n s t r a t e t e a m w o r k .
(3 ) T h i n k p o s i t i v e - - a l l n e g a t iv e a n d n o n - c o n s t r u c -
t iv e s t a te m e n t s u n d e r m i n e t h e p r o j e c t .
(4 ) E x c u s e s d o n t g e t t h e j o b d o n e . I f y o u c a n t
c o m p l e t e a p r o j e c t a s s i g n m e n t o n t i m e , t h e
d e l a y s h o u l d b e b r o u g h t t o t h e a t te n t i o n o f t h e
C E O / s e n i o r o f fi ce r i n advance o f t h e d u e d a te .
W e r e c o m m e n d t h a t th es e i m p l e m e n t a ti o n r e c o m -
m e n d a t i o n s b e h a n d e d o u t t o a l l p a r ti c ip a n t s. T h e
i m p l e m e n t a t i o n m u s t b e p r e s e n t e d t o s u p p o r t t e a m
s p i r i t , n o t t o a l i e n a t e e m p l o y e e s .
I t is a ls o v it a l t h a t m e m b e r s o f t h e o r g a n i z a t i o n h a v e
a f i r m u n d e r s t a n d i n g o f t h e d i f f e r e n t st ep s . T h u s , i t is
n e c e s s a r y t o i n v o l v e t h e r i g h t p e o p l e a s e a r l y a s
p o s s ib l e i n t h e p r o c e ss a n d t o p r o v i d e t h e n e c e s s a r y
t r a i n i n g a n d e d u c a t i o n . F r o m t i m e t o t i m e ,
m a n a g e r s e x p e c t t h a t t h e b e n e f i t s o f p l a n s a n d
p r o c e d u r e s w i l l b e r e a l i z e d w i t h l i t t l e e f f o r t .
A d e q u a t e i n p u t o f ti m e a n d r e s o u rc e s m u s t b e u s ed
i n b o t h p l a n d e v e l o p m e n t a n d e x e c u t i o n .
Step 9 Establish Evaluation Procedures
I t is i m p o r t a n t t o e s t a bl is h a r e v i e w s c h e d u l e f o r t h e
s t r a te g i c p l a n a s w e l l a s a r e - e v a l u a t i o n o f t h e
p r o c e d u r e s a n d i n f o r m a t i o n s y s t e m s . T h i s p a r t i s
o f t e n f o r g o t t e n . P r o c e d u r e s a n d m a n a g e r i a l h a b i t s
t e n d t o l i v e a l if e o f t h e i r o w n . A s th e c o m p e t i t i v e
a n d o r g a n i z a t i o n a l c o n d i t i o n s c h a n g e , i t b e c o m e s
n e c e s s a r y t o r e - e v a l u a t e t h e s t r a t e g y , t h e c r i t i c a l
s u cc e ss fa c t o rs , a n d s t r a t e g y p e r f o r m a n c e i n d i c a t o r s ,
a s w e l l a s t h e p r o c e d u r e s a n d s y s te m s w h i c h g e n e r a t e
t h e n e e d e d i n f o r m a t i o n .
I V C o n c l u s i o n
S t r a t e g i e s a r e f o r m u l a t e d b a s e d o n a n u m b e r o f
a s s u m p t i o n s . D u r i n g s t r a t e g y e x e c u t i o n , h o w e v e r ,
t h e s e p r e m i s e s a n d o t h e r f a c t o r s a re l i k e l y t o c h a n g e
a s t i m e p a ss es , T h e r e f o r e , g e t t i n g t h e r i g h t i n f o r m a -
t i o n o n d e v e l o p m e n t s i n c r i t ic a l i ss u es a n d t h e f i r m s
s t r a t eg i c p rog res s i s e s s en t i a l t o t he d i r ec t o r s and
m a n a g e r s o f a n y b u s in e s s. F u r t h e r m o r e , t h is s p e c if i -
c a l ly id e n t i f ie d i n f o r m a t i o n is u s e d i n c o m m u n i c a t -
i n g a n d m o n i t o r i n g s t r a t e g i c p r o g r e s s , a n d t o
m e a s u r e k e y p e r s o n n e l o n v i ta l a sp e c ts o f t h e f i r m s
s t r a te g y a n d p r o v i d i n g p o w e r f u l m o t i v a t o r s f o r t h e
f i r m a s a w h o l e .
R e s e a r c h s u g g e s t s t h a t r e l a t i v e l y f e w f i r m s a r e
e n g a g e d i n s y s te m a t i c m o n i t o r i n g o f f a c to r s c r it ic a l
t o t h e f i r m s s t r a t e g ic s u c ce s s. H o w e v e r , t h e f i r m s
w h i c h h a v e a d o p t e d t h e s e m o r e s o p h i s t i c a t e d
m e t h o d s f o r s t r a t e g y f o r m u l a t i o n a n d m o n i t o r i n g
o f s t ra t e g i c p r o g r e s s s e e m t o a c h i e v e b e t t e r p e r f o r -
m a n c e . T h e p l a n n i n g p r o c e s s a n d p r o c e d u r e s d e s -
c r i b e d i n t h i s a r t i c l e p r o v i d e a f r a m e w o r k w h i c h
f i rm s c a n u s e t o b r i d g e t h e g a p b e t w e e n t h e v i si o n o f
t o p m a n a g e m e n t a n d s u c ce s sf u l s t r a te g y e x e c u t i o n .
W i t h t h e m e t h o d p r e s e n t e d h e r e , t h e d i r e c t o r s a n d
t h e t o p m a n a g e m e n t t e a m a r e a b l e t o c l e a r l y
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Us ing Cr i t i ca l S uccess F ac to rs i n P l an n ing 109
com m u nica t e t he f i rm s s t ra t egy to t he o rgan iza -
t i o n . M o r e o v e r , t h e y h a v e a m e t h o d f o r r e c e i v i n g
the r i gh t i n fo rm a t ion a s we l l a s fo r m easu r ing
per fo rm ance and ensu r ing t ha t app rop r i a t e ac t i ons
are taken. In addi t ion , indiv idual responsib i l i t ies in
re l a t i on t o s t ra t egy im p lem en ta t i on can be i den t i -
f i ed and m on i to red t o reach t he i n t ended goa l s .
G iven app rop r i a t e ly t a i l o red p rocedures , f i rm s can
a t ta i n h i g h e r l e v e ls o f a c h i e v e m e n t a n d m o t i v a t i o n
am ong em ployees a s t hey a re he lped t o recogn ize
t o p m a n a g e m e n t s e x p e c ta t io n s a n d t h e ir o w n
respons ib i li t ie s i n t he execu t ion o f t he f i rm s
st ra tegy.
Acknowledgements The
t u d y c o n d u c t e d w a s b y t h e a u t h o r
a n d p a rt l y s p o n s o re d b y A r t h u r A n d e r se n C o . , w h o s h ar e n o
respons i b i li t y in t he conc l us i ons o f the r e sea r ch . T he au t ho r
acknow l edges t he va l uab l e con t r i bu t i ons m ade t o t h is r e sear ch
b y H a r o ld B o t t a n d J o h n R o g a n o f A r t h u r A n d e rs e n C o .
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MIT, 1981. A more detai led l is t of 23 subdimensions m ay be
obtaine d from th e author.
This technical part of the s t rategy form ulat ion process had been
described in numerous art icles and books, such as Grant and
King s Topic of Strategic Planning Litt le, Brown, Boston
(1983) .
Inspired b y Joh n Stewart, Jr. , Ma nag ing a Successful Business
Turnaround Amer ican Mana gement Assoc ia t ion (1984) .