jenster using critical success factors in planing

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 :


2/8

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


3/8

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 -


4/8

U sing Crit ica l Success Factors in Plan ning 1 5

Marketing

.,~.~,c,, .,,9 .~, ¢,- ,~

~ o~ ~,L.~ .~o-

~,~ - x o- x .~ v¢

Personnel

O

'6

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 -


5/8

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


Senior Market Analyst

Manager of Product Development

A Sales growth of 17 per cent


Manager of Advertising

Four Senior Salesmen


6/8

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 ;


7/8

108

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


8/8

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 .

References

(1) L. Cal ingo, J . Cam iUus, P. Jenste rand T. Raghunathan, Strategic

management an d org anizat ion al act ion: a con ceptua l synthesis ,

43rd Nat iona l Conference o f Academy of Manage ment (1983) .

(2)

(3)

4 )

(5)

6 )

(7)

8 )

(9)

10 )

Depending on the nature o f the bus iness, th is m ethodo logy is

appro priate for smal ler to medium-s ized f irms.

R. Hise and S. Mc Dan iel , CEO s v iews on st rategy: a survey, The

Journa lo fBus iness S t ra tegy Winter (198 4). See also D. Daniel,

Management in format ion c r i s i s , Harvard Business Review

Nove mbe r-Decem ber (19 61) ; and D. Daniel , Reorganizing for

results, Harvard Business Review March-Apr i l (1966) .

Rockart, Chief execut ives def ine the ir own data needs, Harvard

Business Review

March-Apr i l (1979) .

P. Jenster, Div is ional m oni tor in g o f cr i tical success factors

during s t rategy implem entat ion, Doctoral dissertat ion, Univer-

s i ty of Pi t tsburgh (198 4).

See ref . 5.

V. Mi l lar, Decis ion-oriented inform at ion, Datamation January

(1984) .

A pa rallel classification was de velo pe d in C. V. Bulle n and J. F.

Rockart, A primer on crit ical success factors, work ing paper,

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) .

jenster using critical success factors in planing

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