Key success factors (also known as competitive emphasis or strategic posture) state the important elements required for a company to compete in its target markets. In effect, it articulates what the company must do, and do well, to achieve the goals outlined in its strategic plan. Examples would include agility, reliability, diversity and emotional connection with clients.
Key success factors are one of three elements a company’s management team must articulate as part of its strategic planning process, with the others being its strategic goals and its strategic scope.
The decisions the management team makes about key success factors:
- Directly addresses competitive forces (factors in the marketplace that can reduce profits)
- Set direction for the behavioral expectations of the employees
- Inform the knowledge, skill and behavioural requirements for a company to succeed
- Provide the decision-making boundaries for execution plans, including organizational structure, sourcing,manufacturing, marketing and sales, tools, technologies, etc.
Companies use the insights from their SWOT analysis to make these decisions. They are refreshed annually as part of the strategic planning process.