REPORT

ON
Strategic Performance Control

BY

Srikant Adhikarla- 09BS0002409

Shivani Palod- 09BS0002237
Vineet Yadav-09BS0002713
Shantanu Singh-09BS0002170
Atul Jain-09BS0003065

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 AT

A report submitted in partial fulfillment of the requirements of

MBA Program of ICFAI University, Dehradun

Distribution List

Prof. T.M.C.VARADARAJAN- IBS Mumbai

Date of Submission: 31 August, 2010

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Strategic performance management (SPM) has become an important vehicle for business
management in today's turbulent business environment. Therefore SPM has attracted much
research interest from the side of both scientists and policy-makers. The question is however
whether SPM has brought added value for organizations.

Significant changes in the business environment may make it difficult for an organization to
survive n the market place.

Strategic changes takes place the form of

1. Changing competitor moves

2. Changing customer value-price perceptions
3. Changing technology conditions
4. Changing competitor profile
5. Changing Supplier equations

Vision and Mission

The vision and Mission statements together provide the growth directions for the organizations
and control the allocation of resources.

For ex, a theater complex might define its mission as exhibiting movies. On the other hand a
theater complex might define its vision as providing entertainment.

Entertainment is broader than movie exhibition and will permit the organization to have business
activate like video game consoles and dining outlets built into the premises of the complex that
exhibits movies.

Such an organization, in order to grow, will not engage in business activates like cement
manufacturing, retailing apparel, or selling computers

Vision and Mission of Dabur India

Dabur India the fourth largest FMCG Company’s Vision is “Dedicated to the health and well-
being of every household”

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Strategies that an organization adopts control its strategic positioning, which translates into
customer perception of the organization’s products and services. The resources and strengths
available with the organization and the strategic gaps existing in the marketplace play a key role
in the choice of strategy that controls its performance

Critical success factors and controls (CSF)

Critical success factor (CSF) is the term for an element that is necessary for an organization or
project to achieve its mission. It is a critical factor or activity required for ensuring the success of
a company or an organization. The term was initially used in the world of data analysis, and
business analysis. For example, a CSF for a successful Information Technology (IT) project is
user involvement."Critical success factors are those few things that must go well to ensure
success for a manager or an organization, and, therefore, they represent those managerial or
enterprise area, that must be given special and continual attention to bring about high
performance. CSFs include issues vital to an organization's current operating activities and to its
future success."

Each industry will have a different set of critical success factors. For instance, in the case of
grocery chains such as reliance Fresh, one of the critical success factors would be to source farm
fresh vegetables at low prices which will translate into building sustainable supplier
relationships.

For example, in domino’s pizza, the critical success factors are related to four broad areas,
customer’s preference fro pizza as a food item, its ability to prepare a pizza within a short time,
to deliver it within 30 minutes of recording the order, and the store location. Since domino’s
business model is based on home delivery, the speed of preparing the pizza and delivering it are
the critical success factors.

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Each industry will have a different set of critical success factors. For instance, in the case of
grocery chains such as reliance Fresh, one of the critical success factors would be to source farm
fresh vegetables at low prices which will translate into building sustainable supplier relationships

For each organization the critical success factors may be different, depending on its mission and
strategic goals. The strategic controls ensure that there is an alignment between the mission and
strategic goals.

For example the mission of a television manufacturing organization may be to be recognized as a

top end organization in its industry. The strategic goal would be to frequently introduce state of
the art products in the electronics industry. The critical success factor for the organization would
be the research and development activity and speed to the market with new versions

Once the organization has decided on the critical success factors, it becomes necessary to track
the activities that lead to their achievements and to monitor the performance of each of these
activates. Performance measures are required for the organization to know whether the approach
it is taking to address the critical\success factors.

Performance Measurement

Performance measures can be of three types

•Performance indicators
•Key performance indicators
•Key result indicators

A performance indicator or key performance indicator (KPI) is a measure of performance.

Such measures are commonly used to help an organization define and evaluate how successful it
is, typically in terms of making progress towards its long-term organizational goals. KPIs can be
specified by answering the question, "What is really important to different stakeholders?" KPIs
may be monitored using Business Intelligence techniques to assess the present state of the
business and to assist in prescribing a course of action. The act of monitoring KPIs in real-time is
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known as business activity monitoring (BAM). KPIs are frequently used to "value" difficult to
measure activities such as the benefits of leadership development, engagement, service, and
satisfaction. KPIs are typically tied to an organization's strategy using concepts or techniques
such as the Balanced Scorecard. The KPIs differ depending on the nature of the organization and
the organization's strategy. They help to evaluate the progress of an organization towards its
vision and long-term goals, especially toward difficult to quantify knowledge-based goals.

A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark,
target, and time frame. For example: "Increase Average Revenue per Customer from £10 to £15
by EOY 2008." In this case, 'Average Revenue per Customer' is the KPI.

KPIs should not be confused with a Critical Success Factor. For the example above, a critical
success factor would be something that needs to be in place to achieve that objective; for
example, an attractive new product.

Relation to Key Performance Indicator

A critical success factor is not a key performance indicator (KPI). Critical success factors are
elements that are vital for a strategy to be successful. KPIs are measures that quantify
management objectives and enable the measurement of strategic performance. A critical success
factor is what drives the company forward, it is what makes the company or breaks the company.
As staff must ask themselves everyday 'Why would customers choose us?' and they will find the
answer is the critical success factors.

An example:

KPI = Number of new customers.

CSF = Installation of a call centre for providing quotation

Performance indicators

•An organization may have a variety of performance indicators indifferent areas.

•Marketing performance indicator
•HR performance indicator
•Production performance indicator
•Performance indicators may be lead indicators or lag indicators
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Lead indicators or lag indicators

•In the Domino pizza example, consider the performance indicator, late delivery of pizzas. This
may be considered as a lag indicator (focus is on late) as well as a performance lead indicator
(focus is on
delivery).

•Good performance indicators are specific, measurable, attainable, realistic, and a have time
perspective

A performance indicator or key performance indicator (KPI) is a measure

of performance. Such measures are commonly used to help an organization define and evaluate
how successful it is, typically in terms of making progress towards its long-term organizational
goals. KPIs can be specified by answering the question, "What is really important to
different stakeholders?" KPIs may be monitored using Business Intelligence techniques to assess
the present state of the business and to assist in prescribing a course of action. The act of
monitoring KPIs in real-time is known as business activity monitoring (BAM). KPIs are
frequently used to "value" difficult to measure activities such as the benefits of leadership
development, engagement, service, and satisfaction. KPIs are typically tied to an organization's
strategy using concepts or techniques such as the Balanced Scorecard.

The KPIs differ depending on the nature of the organization and the organization's strategy. They
help to evaluate the progress of an organization towards its vision and long-term goals,
especially toward difficult to quantify knowledge-based goals.

A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark,
target, and time frame. For example: "Increase Average Revenue per Customer from `100 to
`150 by EOY 2008." In this case, 'Average Revenue per Customer' is the KPI.

KPIs should not be confused with a Critical Success Factor. For the example above, a critical
success factor would be something that needs to be in place to achieve that objective; for
example, an attractive new product.

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Some Important Aspects

Key performance indicators (KPIs) are measures by which the performances of organizations,
business units, and their division, departments and employees are periodically assessed.

In a corporate environment where the Balanced Scorecard (BSC) methodology is to review and
track performances, the KPIs are defined as part of a hierarchical decision-making process, this
process is briefly outlined below.

1. The strategy map of the organization is first formulated, and involves the definition of
business, managerial and operational strategies in each of the four perspectives of the Balanced
Scorecard, with due regard to the vertical and horizontal inter-dependencies between them. The
four perspectives are Financial, Customer, Internal Processes and Learning & Growth.

2. Objectives are defined under each strategy. These objectives should be SMART goals -
Specific, Measurable, Achievable, Realistic and Time-limited.

3. KPIs are determined under each objective.

a. KPIs should be acceptable, understood, meaningful and measurable. They should not be
defined in such a way that their fulfilment would be hampered by factors seen as non-
controllable by the organizations or individuals responsible. Such KPIs would tend not to be
accepted.

b. Sometimes, actual values of KPIs that are required for comparison with target values during
periodic performance review in the BSC process cannot be made, since there is no method or
process in place to measure and collect the actual figures. In such a case, the use of these KPIs
should be started after such a process is designed and deployed. All efforts should be made to put
a process in place quickly.

c. KPIs should be meaningful in that the fulfilment of their targets actively contributes to
organizational improvement. For instance, the measure “Training man-days” under the objective
“Provide adequate employee training” under the “Learning and Growth” perspective is not very
meaningful since the fulfilment of the target in man-days alone does not indicate the usefulness
of training. Hence, in addition, a suitable objective called “Maximize Training Effectiveness”,
and a measurable KPI may be defined under this new objective. This new KPI might, for
instance, be called “Percentage of training programs put to practical use within three months
after training”.

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d. Typically, there will be some variability in measures defined for each strategic business unit
(SBU) of a company. The diversity of the KPIs will be due to differences in the product/service
segments, business environments, markets, technologies, regional disparities, etc. in the business
units. At the same time, however, the definers of KPIs must identify those that would be
common irrespective of the nature, scope and location of the diverse businesses, and ensure that
such KPIs are defined for all the SBUs.

4. The necessary inter-dependencies between strategies defined in the strategy map means that
strategies of the lower-level perspectives of the Balanced Scorecard framework are aligned with
those of the higher-level perspectives. For example, the strategies of the customer perspective are
aligned with those of the financial perspective, hence achievement of the objectives of the
customer perspective are important in itself, but also as a sort of necessary condition for the
achievement of objectives of the financial perspectives. Thus the “lower” objectives need to be
aligned with the “higher” ones.

5. From the above, it follows that there should be similar alignment of the measures (KPIs)
selected for each objective with the measures of the “higher” objectives, and this fact must be
kept firmly in mind while defining them.

6. Numerical targets are set for each KPI. These may be in terms of:

a. A single value

b. An upper limit

c. A lower limit

d. A range of values

e. A percentage of a specific quantity/value

f. A scheduled date by which a given task is to be completed, etc.

Identifying Indicators of Organization

Performance indicators differ from business drivers & aims (or goals). A school might consider
the failure rate of its students as a Key Performance Indicator which might help the school

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understand its position in the educational community, whereas a business might consider the
percentage of income from return customers as a potential KPI.

But it is necessary for an organization to at least identify its KPIs. The key environments for
identifying KPIs are:

 Having a pre-defined business process (BP).

 Requirements for the business processes.

 Having a quantitative/qualitative measurement of the results and comparison with set

goals.

 Investigating variances and tweaking processes or resources to achieve short-term goals.

A KPI can follow the SMART criteria. This means the measure has a Specific purpose for the
business, it is Measurable to really get a value of the KPI, the defined norms have to
be Achievable, the KPI has to be Relevant to measure (and thereby to manage) and it must
be Time phased, which means the value or outcomes are shown for a predefined and relevant
period.

Marketing KPIs

Some examples are:

1. New customers acquired

2. Demographic analysis of individuals (potential customers) applying to become

customers, and the levels of approval, rejections, and pending numbers.

3. Status of existing customers

4. Customer attrition

5. Turnover (i.e., Revenue) generated by segments of the customer population.

6. Outstanding balances held by segments of customers and terms of payment.

7. Collection of bad debts within customer relationships.

8. Profitability of customers by demographic segments and segmentation of customers by

profitability.

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Many of these customer KPIs are developed and managed with customer relationship
management (CRM) software.

Faster availability of data is a competitive issue for most organizations. For example, businesses
which have higher operational/credit risk (involving for example credit cards or wealth
management) may want weekly or even daily availability of KPI analysis, facilitated by
appropriate IT systems and tools.

KPIs for Manufacturing

Overall equipment effectiveness, or OEE, is a set of broadly accepted non-financial metrics

which reflect manufacturing success.

 Cycle Time

Cycle time is the total time from the beginning to the end of your process, as defined by you and
your customer. Cycle time includes process time, during which a unit is acted upon to bring it
closer to an output, and delay time, during which a unit of work is spent waiting to take the next
action.

 Cycle Time Ratio

CTR = Standard Cycle Time / Real Cycle Time

 Utilization

 Rejection rate

[Edit]KPIs for Supply Chain Management

Businesses can utilize KPIs to establish and monitor progress toward a variety of goals,
including lean manufacturing objectives, MBE (Minority Business Enterprise) and diversity
spending, environmental "green" initiatives, cost avoidance (CA) programs and low-cost country
sourcing (LCCS) targets.

Any business, regardless of size, can better manage supplier performance with the help of KPIs
robust capabilities, which include:

 Automated entry and approval functions

 On-demand, real-time scorecard measures

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  Single data repository to eliminate inefficiencies and maintain consistency

 Advanced workflow approval process to ensure consistent procedures

 Flexible data-input modes and real-time graphical performance displays

 Customized cost savings documentation (CSD)

 Simplified setup procedures to eliminate dependence upon IT resources.

Main SCM KPIs will detail the following processes:

 sales forecasts

 inventory

 procurement and suppliers

 warehousing

 transportation

 reverse logistics

Suppliers can implement KPIs to gain an advantage over the competition. Suppliers have instant
access to a user-friendly portal for submitting standardized cost savings templates. Suppliers and
their customers exchange vital supply chain performance data while gaining visibility to the
exact status of cost improvement projects and cost savings documentation (CSD).

[Edit]Categorization of indicators

Key Performance Indicators define a set of values used to measure against. These raw sets of
values fed to systems to summarize information against are called indicators. Indicators
identifiable as possible candidates for KPIs can be summarized into the following sub-categories:

 Quantitative indicators which can be presented as a number.

 Practical indicators that interface with existing company processes.

 Directional indicators specifying whether an organization is getting better or not.

 Actionable indicators are sufficiently in an organization's control to effect change.

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  Financial indicators used in performance measurement and when looking at
an operating index

Key Performance Indicators in practical terms and strategy development means are objectives to
be targeted that will add the value to the business most (most = KEY INDICATORS OF
SUCCESS).

CSFs are an explicit representation of the key performance areas of an organization. In this
context, CSFs define those sustaining activities that an organization must perform well over time
to accomplish its mission. They are found at every level of management, from executive to line
management. Each organization also has a set of CSFs that it inherits from the particular industry
in which it operates. To apply the CSF method and to use CSFs as an analysis tool, it is
important to understand how they relate to the organization’s strategic drivers and competitive
environment. This section provides a foundation for understanding CSFs and defines these
important relationships.

CSFs Defined

The term “critical success factor” has been adapted for many different uses. Familiarity with the
term is often presented in the context of a project or an initiative (i.e., the CSFs for the
implementation of an ERP system or the deployment of a diversity program). In this context,
CSFs describe the underlying or guiding principles of an effort that must be regarded to ensure
that it is successful.

A slight distinction must be made when considering CSFs as a strategic driver at the
organizational or enterprise level (as is done in this report). In this context, CSFs are more than
just guiding principles; instead, they are considered to be an important component of a strategic
plan that must be achieved in addition to the organization’s goals and objectives. While this
distinction is subtle, it is intended to point out that an organization’s CSFs are not just to be “kept
in mind”; their successful execution must drive the organization toward accomplishing its
mission.

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The fact that CSFs can be defined in so many different ways speaks to their elusive nature.
Managers generally recognize their CSFs (and the organizations) when they see or hear them,
but may be unable to clearly and concisely articulate them or appreciate their importance.

In fact, most managers are aware of the variables they must manage to be successful, yet only
when problems arise and root causes are identified are these variables made explicit. For
example, suppose an organization finds an alarming number of duplicate payments to vendors.
They might conclude that this problem is related to poor staff training or high levels of staff
turnover. As a result, the effective management of human resources (attracting, training,
retaining) might be identified as an important factor that can impede the achievement of their
strategic goals. In the process, they have explicitly defined a CSF for the organization. CSFs are
powerful because they make explicit those things that a manager intuitively, repeatedly, and even
perhaps accidentally knows and does (or should do) to stay competitive. However, when made
explicit, a CSF can tap the intuition of a good manager and make it available to guide and direct
the organization toward accomplishing its mission.

Goals versus CSFs

In traditional strategic planning and management, the definition of a goal or an objective is fairly
well known; however, defining a CSF is much less clear [Rockhart 81]. Thus, CSFs are often
confused with organizational goals. For the purpose of this report, we define organizational goals
as targets that are established to achieve the organization’s mission. They are very specific10 as
to what must be achieved, when it is to be achieved, and by whom. Effective goals have a
quantitative element that is measurable to determine if the goal has been achieved. Goals can be
decomposed into operational activities to be performed throughout the organization.

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 Goals vs. CSFs

Goals and CSFs go hand-in-hand. Both are needed to accomplish the organization’s mission, and
neither can be ignored without affecting the other. Because they are both integral parts of an
organization’s strategic plan, their relationship must be considered. For example, a person might
have a goal of losing 10 pounds by the end of the year. To achieve this goal, the person would
have to be mindful of a few key factors—improving his or her diet and nutrition, exercising
regularly, and avoiding tempting social gatherings. Careful attention to these key factors will
enable the person to achieve the goal of losing 10 pounds; conversely, inattention to these factors
will inhibit achievement of the goal.

Relationship between Goals and CSFs

The strong relationship between goals and CSFs results from the fact that managers are the
origin of both goals and CSFs. When managers set goals, they also implicitly consider what they
need to do to be successful at achieving the goals. Thus, it is likely that managers consciously

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consider their CSFs during goal setting and consequently create the bond between goals and
CSFs that is needed to contribute to accomplishing the organization’s mission. In this way, the
influence of CSFs on goal achievement is made explicit, even if the actual CSFs are not.
Organizations that have been successful at achieving their goals have also likely achieved their
CSFs, albeit in a less observable way. Thus, goals sometimes resemble CSFs because they
embody the importance of a key performance area.

Usually a goal is immediately discernible from a CSF because of its specificity. A CSF for the
organization may be more general and is likely to be related to more than one goal. Consider the
following goals for a large manufacturing company:

• Increase sales in our Northeast division by 10% by 2nd quarter, 2004.

• Decrease travel expenses by 5% in the next 30 days.

• Expand product line to include widgets and gadgets.

• Increase expansion by opening at least two retail stores in at least two European markets by 3rd
quarter 2006.

The first goal might be commonly found in many commercial organizations: to achieve a 10%
increase in sales in a divisional unit. To achieve this goal, the manufacturing company is stating
an implicit dependence on the organization’s ability to perform well in a few key areas. While
the goal is simple, it reflects many key underlying assumptions or conditions. Implicitly, this
goal states that

• The growth of the company is dependent on the organization’s capability for increasing sales.

• Sales staff must be empowered and enabled to meet the challenge of attaining an increase of
10%.

• The company must act quickly because it needs to retain and grow its market share in the

Northeast as other competitors ramp up.

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• The Northeast division is an important area in which sales expansion brings the company a
competitive advantage.

These assumptions or conditions embody CSFs that are directly related to the potential success in
achieving the goal. For example, consider the following dependencies between the goal,
underlying assumptions and conditions, and CSFs:

Relationship between Goals and CSFs

The importance of the CSFs in helping the manufacturing company achieve its goals cannot be
overstated. In this example, at least one of the CSFs—attract, train, and retain competent sales
staff—is vitally important if the company wants to achieve the goal of attaining a 10% increase
in sales. If the company fails to consistently retain qualified sales staff, the goal cannot be
achieved, and in the long run, the manufacturing company’s mission may be in jeopardy.

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The Superiority of CSFs over Goals

Goals alone can be an unreliable predictor of an organization’s ability to successfully accomplish

its mission. This is because goal-setting in many organizations is at best a subjective exercise and
often is strongly influenced by or derived from a performance management system rather than a
strategic planning exercise. Often, goals are set with an eye to their achievability rather than how
they contribute to accomplishing the mission. For example, an organization may realize that it is
failing to accomplish its mission even though it has successfully achieved its goals. This can
occur because the goals have not been aligned with the organization’s strategic plan; thus their
achievement does not propel the organization forward. On the other hand, CSFs are less likely to
be biased toward achievement. While CSFs are derived from and reflect the considerations of
management, they are also inherited by the organization from the industry in which it operates its
position relative to peer organizations, and the effects of the current operating climate and
environment. As a result, even though an organization may not achieve its goals, achieving CSFs
may still get the organization closer to accomplishing the mission. Organizations that have
achieved their goals but failed at their missions may have ignored the achievement of their CSFs.

The connection between organizations’s operating environment and CSFs make them
collectively more reliable as a predictor of the organization’s capabilities for accomplishing the
mission. To further develop this assertion, it is useful to explore the various sources of CSFs in
more detail.

Sources of CSFs

CSFs are generally described within the sphere of influence of a particular manager. But there
are many levels of management in a typical organization, each of which may have vastly
different operating environments. For example, executive-level managers may be focused on the
external environment in which their organizations live, compete, and thrive. In contrast, line-
level managers may be concerned with the operational details of the organization and therefore
are focused on what they need to do to achieve their internal, operational goals. Because of these
different operational domains, the CSFs for the organization will come from many different
sources. All are important for the organization as a whole to accomplish its mission, regardless
of their source.

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Industry CSFs

Every organization inherits a particular set of operating conditions and challenges that are
inherent to the industry (or segment of the industry) in which it chose to do business. This results
in a unique set of CSFs that organizations in a particular industry must achieve to maintain or
increase their competitive positions, achieve their goals, and accomplish their missions. For
example, consider an organization in the airline industry. As a member of this industry, the
organization inherits CSFs such as “deliver on-time service” or “move away from the hub-and-
spoke system.” Failure to achieve these CSFs may render the organization unable to stay
competitive in its industry and may ultimately result in its exit.

Example of Industry CSFs for an Airline

Industry CSFs do not necessarily apply only to a commercial or profit-oriented mission. In

reality, the concept of industry CSFs can apply to organizations that have a commercial,
educational, public-service, or non-profit orientation.

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Competitive-Position or Peer CSFs

Peer-group CSFs are a further delineation of industry-based CSFs. They define those CSFs that
are specific to the organization’s unique position relative to their peer group in the industry in
which they operate or compete. For example, an organization may be a leader or a laggard in a
particular industry. If they are a leader, they may have CSFs that are aimed at ensuring they
maintain or increase their market share against other organizations in the industry.

On the other hand, if considered a laggard, the organization may have specific CSFs aimed at
closing the gap and improving their competitive position relative to other organizations in their
industry. In the case of the airline, an example of a peer-group CSF may be to “reduce cost per
passenger mile” or “increase code share partnerships.” These CSFs may be necessary for the
company to increase market share in new geographical areas and to maintain or increase their
competitive positions.

Example of Peer CSFs for an Airline

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Management-Position CSFs

Every layer of management has a different perspective and focus in the organization. This
division of labor ensures that both tactical and strategic actions are taken to accomplish the
organization’s mission. Managers have different focuses and priorities depending on the layer of
management in which they operate. This translates into a set of CSFs that reflect the type of
responsibilities required by the manager’s position in the organization. In fact, the CSFs that are
inherent to the level of management may be universal across different organizations in the same
industry. For example, executive-level managers may have CSFs that focus on risk management,
whereas operational unit managers may have CSFs that address production control or cost
control.

Figure 9: Example of Management-Position CSFs for an Airline Manager

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Importance of CSF Sources and Dimensions

The source and dimension of a CSF provides additional information for understanding the
importance of a CSF and its contribution to the accomplishment of the organization’s mission.
To be effective, managers must consider and monitor a wide range of activities, events, nd
conditions that occur throughout the organization and in the external environment in which the
organization operates. Gathering CSFs that incorporate and reflect various CSF sources and
dimensions provides an effective delineation of a manager’s field of vision—a representation of
the depth and breadth of the manager’s responsibilities.

General Advantages of a CSF-Based Approach

Throughout this report, the advantages of developing and applying CSFs are presented. The
seemingly endless ways in which they can be of use to an organization speaks to their simple
nature and broad applicability.

• CSFs can reduce organizational ambiguity. Developing and communicating a set of CSFs can
reduce the dependence on the perceived aims of the organization. CSFs reflect the implicit,
collective drivers of key managers and as a result are a more dependable and independent
articulation of the organization’s key performance areas.

• CSFs are more dependable than goals as a guiding force for the organization. An organization
can set good goals that, in theory, will move the organization toward its mission. However, if the
goals are poorly articulated or developed, this is not guaranteed. CSFs are reflective of what
good managers do well to move the organization toward its mission, regardless of the quality of
the goals that have been set.

• CSFs are more likely to reflect the current operating environment of the organization. Goal
setting tends to be a cyclical (i.e., yearly) activity that is seldom revisited until performance
measurement. Used properly, CSFs are likely to be more dynamic and to reflect current
operating conditions (particularly because of the many sources of CSFs).

• CSFs provide a key risk-management perspective for the organization to consider. The risk
perspective of executive-level managers is built into CSFs, so their “radar screen” is exposed to
the organization as a whole.

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• CSFs can be valuable for course correction. When CSFs are made explicit, managers often
realize that their perception of what is important to the organization may not match reality or
they may realize that they don’t fully understand the current operational climate. Thus, they can
use CSFs to realign their operating activities.

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