7 key factors for achieving success

Personal growth

Why do you think some projects and companies can achieve success, while others face constant failure? And the answer to this question is quite simple - there are the main factors for achieving a company’s success, which have been used by entrepreneurs and corporations for the past 50 years. And this is not surprising, because their creator has provided a lot of evidence of the effectiveness of this tool.

You're unlikely to listen to the advice of a fat nutritionist or an exhausted therapist. It's the same in business. Any company that engages in management consulting must set an example of prosperity. The creator of the management tool Key Factors for the Company's Success was Ron Daniel in 1961. He explained from a scientific point of view the mechanism of success of departments and the company as a whole.

What are the key success factors?

A key success factor (KSF) is a certain number of areas of activity in which achieving high results guarantees success for a person, company or division in the competition. Simply put, these are the factors or areas on which you need to focus your attention in order to achieve success.

The main success factors are those areas of activity that must work without any major disruptions, only then will this guarantee the success of an individual manager or the entire company. Those. These are the few areas that need to be given special and constant attention to get the most positive results from them.

Key Performance Indicators (KPIs) should not be confused with Key Success Factors (KSFs). KPI is a unit of measurement for success, and KPI is what contributes to success. For example, CFU is the opening of a new store with more favorable purchasing conditions. Actually, due to this, KPIs will be achieved. And the KPI is, let’s say, there should be 10 new clients per week.

Qualities of the most successful people

Western researchers have collected a database and analyzed the lives of the most successful people. Among the objects of attention, as expected, were: Bill Gates, Warren Buffett, Mark Zuckerberg, Sergey Brin, Larry Page, Arkady Volozh, Pavel Durov, Evgeny Kaspersky and others.

Based on an analysis of the biographies of the most successful business representatives, researchers were able to identify basic personal qualities that are likely to contribute to success.

Desire comes first

Surprisingly, the engine of many achievements was a banal “obsession.” The most successful individuals in modern history were so passionate about their goals that they did not notice obstacles.

Serious internal impulse

The model of life is based on the banal: wanted and did. For these people there are no external obstacles; they simply have not heard the arguments against.

Unjustified optimism

Where others would think and measure seven times, they begin to act. They firmly believe in their strengths and abilities, in the uniqueness of the idea, in the demand for a service or product.

Even major failures cannot shake the strong optimism that simply gushes out of them.

They firmly believe that there are no obstacles that a person cannot overcome.

Living in the present

The most successful people of our time are so competent in time that they literally operate with time:

evaluate ideas realistically;
think about the short term;
are able to connect strategic development plans with current needs.

Think according to the “need/don’t need” principle

This kind of thinking is usually called “black and white” and is not generally encouraged by society. But, surprisingly, the success formula of the best representatives of our time is built on this type of thinking.

When all life situations are easily sorted into “necessary” and “not necessary”, it is easier to achieve many goals.

The perception of the world around is simplified, and the goal becomes more clear and achievable.

Charisma

It's strange that this point is so far from the beginning of the section, because it is often fundamental.

It is difficult to achieve something in splendid isolation, but in order for the team to work on your idea, they need to be captivated and convinced.

It is noteworthy that almost all successful people, at the stage of establishing their first business, did their best to convince others to work for the idea.

Tendency to take risks

“He who doesn’t take risks, doesn’t drink champagne” - this phrase is very suitable for many people who are considered successful after the fact.

Ability to take responsibility

Every successful businessman perfectly feels his boundaries of responsibility: for words, employees, friends, a common cause.

Despite their straightforward thinking, startup owners understood perfectly well where and when they needed to take full responsibility in order to increase their business reputation and give confidence to others.

Rational attitude towards money

Those who have achieved everything themselves have a much simpler attitude towards money and consider it a means to achieve goals.

There is no hoarding for the sake of hoarding.
There is no unrestrained spending on luxury.
Money ceases to be a goal, but becomes a tool for further development.

They spend all the funds received on new projects, solutions, and innovative ideas.

Modesty, democratic views

Almost all modern intellectual leaders and owners of modern corporations are democrats. Some clearly and openly support this form of government, others indirectly preach the ideas themselves. Yes, they may not support a particular government in a particular country right now, but in general, they always show democratic views.

High ability to adapt

The world is changing so quickly that it is simply impossible to exist without this skill.

Successful people always know how to adapt to new realities, challenges, and systems. This is what allows them to remain among the leaders for many years and even decades.

Examples and features of key success factors

1. Anyone involved in company strategy must be a professional in the area of industry or business in which the company is developing, because any area has its own individual success factors.

2. The success factor of a company must be divided into two areas: personnel management and process management. Neither area should be ignored.

3. An important component in determining the CFU is the company’s mission. The company's success factor is a logical continuation of the task.

4. Nowadays, very often the main factor in achieving success is process improvement through modern technologies.

5. For manufacturers, the success factor is most often low production costs, quality control, and high labor productivity. The best options for CFU will be a balance of these three indicators.

6. For distribution companies, the key success factor is the creation of a global distribution network or retail presentation of goods through competent merchandising.

7. Company success factors related to marketing - advertising, brand strength, guarantees.

8. In the service sector, the success of a company depends on design, speed of service delivery and, of course, on the qualifications of employees.

9. If we take the human factor, then the success factor here can be: a culture of communication, an effective method of accepting change, an effective communication system, the development of team spirit

The activities of many organizations are project-oriented. Companies exist by receiving new projects and their successful implementation. Successfully completed projects are the foundation on which an organization builds its future. Regardless of whether they are related to the creation of new products, the construction of buildings, the increase in production capacity or the implementation of a new computer system.

Project management is necessary to effectively coordinate and manage an organization, ensuring that the right actions are taken at the right time with full understanding of the consequences. The art of project management includes the ability to achieve goals within established limitations on financial, material, human, time and other resources [1].

However, in most companies, projects are not always implemented “smoothly”. They do not fit into the routine of daily work. Gartner, a world-renowned research firm, estimates that 66% of large-scale projects fail to meet stated business objectives, are completed late, or significantly overrun their budget [2]. The Standish Group, which tracks exclusively the success and failure of IT projects, defines failed projects as projects abandoned in the middle, and estimates the failure rate at 15% [3]. At the same time, “flawed” projects (defined as projects with cost overruns, missed deadlines, and projects with unsatisfactory results) account for 51% of all IT projects.

Why does a significant proportion of projects continue to fail even with increasing focus on the quality of project management and an increasing number of experienced and competent project managers?

The St. Gallen Institute and the International Institute for Learning Organizations and Innovation in Munich conducted research into the reasons for successful and unsuccessful projects. They came to the conclusion that the reasons for failures are less of an industrial-economic or technical nature, and are largely related to the culture of entrepreneurship, communication and information processes on the project [4].

According to A. Golovin, the project will fail in three cases [5]:

when unrealistic plans are developed or are not revised when necessary. This means they will be torn off;
when the project developer is not familiar with project management and manages the project as a normal activity. Then the heads of departments do not know what to do: the main work or project tasks;
when a project developer, when creating a project team, focuses not on personal qualities, but on positions. Then the project team members are unable to complete the project tasks.

Poorly defined deliverables and scope, lack of organizational buy-in, poor resource allocation and risk control, poor management of a project whose components are not fit for purpose, etc. – any of these reasons can cause the project to fail.

The main reason for project problems is the project manager's ability to work through problems and reduce risks. He must be a strong leader, able to communicate with company management and meet expectations in resource management [6].

Poor project definition is also the main reason for project failure, starting from the project approval stage. Insufficient levels of accountability and responsibility at the appropriate higher level negatively impact the success of the project throughout its life cycle. If the customer does not manage the project or is not particularly interested in it, there is a possibility that the project will fail.

In general, it should be noted that the main reasons for project failures are:

Requirements : Unclear, lack of mutual understanding, lack of priorities, contradictory, ambiguous, imprecise.
Resources : Lack of resources, resource conflicts, turnover of key resources, poor planning.
Deadlines: Too tight, unrealistic, too optimistic.
Planning: based on insufficient data, not everything is taken into account, not enough details, erroneous calculations.
Risks: Unidentified or imaginary, lack of management.

The Standish Group believes that the most important factors for the success or failure of a project are, in order of importance [3]:

Degree of customer involvement.
Top management support.
Experienced project manager.

According to research by both foreign and domestic specialists, most of the obstacles preventing the situation from rectifying a failing project are [7]:

convince owners to accept the changes necessary to bring the project to successful completion, despite changes in scope, budget, resources, etc.;
poor communication and owner involvement, lack of clarity and trust;
conflicting policies and priorities;
the problem of finding sufficiently qualified resources to complete the project;
lack of methodology or processes to get the project back on track.

During the research process, many factors were identified that influence the success of correcting the project situation, but the most important is the project manager, who is the most important member of the team, able to influence the result by reducing risks or getting rid of them altogether. It is usually the project manager who is responsible for rescuing a problematic project.

Other factors in successfully completing a distressed project included the presence of a standard methodology for managing or salvaging a distressed project, the size of the firm, and the industry in which it does business.

The main thing in saving a problematic project is effort. Once a firm decides to focus its energy on solving the problems that have jeopardized the project, the chances of its successful completion increase.

The decision to save the project is made by: senior management (in 50% of companies), sponsor (16%), department head (16%) or project manager (13%) [8]. In smaller firms, the sponsor (24%) or project manager (24%) has much more power to have a say in saving the project. Less often, this decision is made by the head of the department (5%).

A generalization of practical experience in project management shows that most often the steps aimed at saving a project are [9]:

modernization of communication and management (62%);
review of project objectives - reduction of its scope, review of financing (60%);
adding or removing resources (58%);
solving technical problems (49%);
replacing a project manager or hiring a consultant (36%).

Firms that do not have a methodology more often prefer to replace a project manager than those that have mastered the methodology (22% and 9%, respectively) [10]. They are also more likely to use outside consultants to save a project (26% vs. 11%).

Typically, operations to save a problematic project are quite successful. Almost three quarters of problematic projects (74%) were eventually completed successfully, 18% are still in progress, so the final results are not known. Only 4% actually failed, and 3% were closed for business reasons.

There are two essential factors for the successful implementation of the project. The first of them is rather the technical side of project management. It is mainly concerned with planning and cost estimation, project management and control, risk management, quality management, project documentation and results evaluation. The second factor is the managerial competence of the project manager.

Companies that do not have a standard project management methodology do not always value these skills and abilities than those that do have such a methodology (78% of the former spoke about the importance of the qualifications of a project manager and 96% of the latter).

Almost all responding organizations (92%) noted that the skills of a project manager are very important (64%) or simply important (28%) to the success of an operation to rescue a problematic project.

It is important that responsibility for the implementation of the project at all stages of management (planning, implementation, control, analysis, changes) rests with one person - the project manager. This will allow you to focus your area of responsibility and increase the efficiency of the decision-making process.

The successful implementation of a project depends not only on project managers and superiors, but also on many other members of the project team. Their actions must also be regulated, motivated and aimed at obtaining not only timely, but also high-quality results.

An important component is the holistic role-based concept of managing each individual project and the entire portfolio. Roles, their place in the organizational structure, rights and responsibilities, and qualification requirements must be defined. Examples of project roles include: project manager, project assistant, development specialist, construction manager, construction specialist, construction coordinator, design specialist, estimator, etc.

Another criterion for success on a project is the ability to choose the “main point of application of effort”, the ability to focus on priority tasks, the solution of which leads to significant progress towards the goal.

Project goals are achieved through action. The project manager is obliged to constantly monitor the completion of project stages within the established time frames and the consumption of resources. Lost time cannot always be made up, even by increasing resources.

It's amazing that even the most skillfully planned project can reach a point where it's hard to tell how things are going. But this is exactly what you need to know in order to direct your efforts towards the goal. Without one or another monitoring system - tracking the progress of work - it is impossible to be sure that the manager “keeps his finger on the pulse” of the project.

Timely and accurate action underlies the success of any project , the foundation of which is organizational discipline - the ability to act “here and now”. The experience of project activities shows that adherence to discipline and commitment of all project participants increases the chance of success by an order of magnitude.

Other success factors for project management include:

introducing an experienced project manager and delegating enough rights to him to make the necessary changes;
attraction of additional, qualified resources;
budget increase;
open communication, setting expectations and assigning responsibilities to those responsible;
redevelopment of the project.

A survey of experienced project managers to find out what the most important component of project success is, showed that it is its execution [11]. Projects are much more likely to stall from failure to fulfill obligations than from any errors in planning or resource allocation.

Everything starts from the top. Management must be aware of the cost and scope of the project. Approving a project estimate is not enough. For a project to be successful, everyone involved must know that management is fully behind the endeavor, the project is a top priority, and its success is directly tied to the future of the enterprise.

Management, through its position, can have an important positive influence on the process of thinking about the use of resources in a project. It can help ensure that resource planning is reasonable before the project begins. May insist on developing additional scenarios to allow for catch-up, considering what is possible and what is not.

Without the formation of a certain culture of project implementation, the project manager is powerless to influence its progress towards the goal. Target dates are set, then missed—the project schedule becomes more of a wish than an action plan. In this case, everyone loses, but most of all, the company. The obligations of performers must be consistent with the corresponding obligations of management.

A manager cannot move forward without real concerted action from the project team. Depending on the scope of the project, this approval may be replaced by the assignment of work to project participants. In many cases, the project team consists of employees from all departments of the company. If team members do not pay enough attention to the work on the project, considering this work to be less important than their daily responsibilities, the project will drift, and quietly but naturally lead to disaster.

If obligations are met, then the project moves forward. But, in order for everything to happen on time, it is necessary to prepare a project schedule. A work plan is a schedule that serves as a realistic model of the expected behavior of a project.

For project managers, the term "schedule" has a very specific meaning. From their point of view, a project schedule is not a project schedule unless it contains a detailed analysis of all the activities required to complete the project; realistic estimates of the time required for each activity; and, finally, thoughtful relationships between different types of work.

Although project management uses terms like start-to-finish, the terminology is not nearly as important as the content: how the work relates to each other (what the technology is).

Obviously, researching the time/cost curve before starting a project allows the company to make the right decision when approving the project schedule.

Taken together, these elements answer the question: what needs to be done and by when? An equally important question is how, what resources - people, equipment, facilities, etc. — are required for each job? Will they be available when needed? How can resource conflicts be resolved? If the project manager knows the actual resource requirements of the plan, as well as how to deal with resource shortages, the project planning portion of the work is completed.

Project planning requires the ability to determine how long a task will take to complete, especially if it involves creative or intellectual activities, regardless of the amount of resources it requires. Unfortunately, miscalculations of project duration during initial planning are often taken too calmly, mistakenly assuming that everything will be completed on time, and lost time can always be made up by redistributing resources.

Some project schedules are built on the theory that you can endlessly increase the number of people and shorten the work time to achieve the desired results. In some situations, increasing the number of resources helps. Sometimes not. Sometimes it does more harm than good.

Frederick P. Brooks, general project manager for the IBM 360 operating system, believes that in most cases, man-month planning is a myth. If a development project falls behind schedule, adding more resources actually extends the project's duration—due to additional staff training, tracking, and communication issues. This is equivalent, according to Brooks, to using gasoline to put out a fire.

When dealing with a project that is behind schedule, the best option is to reschedule or resize the project. The worst thing is to insist on making up for lost time. It is easy to be persuaded that some work can be completed faster without compromising quality. On paper the quality remains. In reality, the requirements are simply being lowered.

A report by management consulting firm McKinsey, published in Fortune magazine, estimates that some projects that are completed on time but over budget are 140 percent more profitable than if they were on budget but were late. six months [12].

As a conclusion summarizing the above, one should cite the data obtained by the St. Gallen Institute and the International Institute of Learning Organizations and Innovation in Munich after conducting research into the reasons for the success and failure of projects, and reflecting the criteria for project success :

General readiness for change. Successful organizations have a philosophy based on the following principles: “live and learn,” “he who does nothing makes no mistakes,” “there is no problem that we cannot cope with.”
Culture of conflicts. In successful projects, conflicts are dealt with constructively and openly. There is a free exchange of information and opinions, as well as an openness to criticism.
Personal responsibility of project employees. The success of projects is directly related to the degree of personal responsibility of project employees and the ability to self-organize. The more authority each individual has, the sooner he is ready to take responsibility, and the greater his personal initiative and motivation. Small powers, on the contrary, promote passivity and even resistance.
Culture of trust. A humanly pleasant climate of openness, sincerity and honesty in communicating with each other increases the likelihood of project success. In a culture of trust, there is less acceptance of mistakes and decisions are made by everyone, and once the decisions are implemented, they are implemented.
Lack of hierarchy. Projects then were especially successful when work on the project took place in a team where hierarchy does not play a role in the organization of the project, or at least is reduced to a minimum. A rigid hierarchy blocked the creativity and motivation of project employees in unsuccessful projects.
Communication and information culture . Projects were especially successful when there was an atmosphere of intense information sharing and open communication within the team, i.e. high degree of publicity. Good communication in this regard means good cooperation, and vice versa. Intensive communication between different functional areas results in increased understanding and employees being able to look beyond the edge of their own areas, leading to more informed decisions.

Thus, a generalization of the experience of project management has shown that the competitiveness of the project should be constantly improved, achieving maximum compliance of its consumer and cost characteristics with the existing and potential needs of the customer. The implementation of competitive advantage is based on the essence of value, which is the source of obtaining the advantage (material, intangible, monetary, social and other values), and depends on its content, source of origin, dynamic manifestation, scale of distribution and other conditions.

Key success factors and development strategy

Step one.

In order to determine the main KFU of the organization, it is necessary to create a “strategic session”, where the company’s managers, who were selected by management, will participate in the planning group.

Step two.

The first thing to do is to think in writing and provide your suggestions for what needs to be learned and what needs to be done by all participants in the session.

Step three.

They read out their proposals with justified arguments.

Step four.

Determining two or three success factors. This is a major part of the process of finding a CFI for a company.

Step five.

Based on the selected KFU, make a SWOT analysis, where weaknesses and strengths, threats and opportunities are determined based on and taking into account key success factors. In the future, SWOT analysis is used for detailed planning to determine the vector of change and the funds allocated for this.

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Determination of the main economic characteristics of the industry

An industry is understood as a group of enterprises whose products have common consumer characteristics and which compete in the same consumer market.
As part of this stage of analysis, it is necessary to obtain answers to the following questions:

market size;
market growth rates and industry position in the life cycle (early development, rapid growth, maturity, saturation, aging and stagnation, market and sales decline);
scale of competition (local, regional, national, group of countries, global);
the number of competitors and their comparative sizes;
the number of buyers and their comparative sizes;
the presence of vertical integration in the industry;
the ease or difficulty of entering and exiting the industry;
the pace of technological progress in the industry;
the degree of differentiation of competitors' products (highly differentiated, weakly differentiated or almost identical);
presence of economies of scale;
whether the achieved level of productivity is critical for reducing costs;
the level of profitability in the industry in comparison with the average in the national economy.

Analysis of closest competitors: what are their possible actions

The study of specific competing enterprises comes down to an analysis of today's policies and potential steps of their closest competitors.
This is a difficult task, but correctly assessing the actions of competitors gives the company the opportunity to prepare for them and take advantage of emerging opportunities. The intentions of closest competitors may require enterprises to prepare to defend their positions or develop a plan for active offensive actions if there are prerequisites for weakening the positions of their closest competitors. On the other hand, it is necessary to predict the actions of competitors in response to the intensification of their own competitive strategy. It is clear that you cannot predict the future actions of competitors with absolute certainty, but you can get closer to understanding their approaches. The analysis is based on an assessment of the current position of competitors, trends in its change and the competitive strategy used. There are three basic competitive strategies: cost leadership, product differentiation and focus. The procedure for analyzing each competitor can be divided into six stages:

Assessing the scale of competition: local, regional, national, group of countries, global.
Assessment of strategic intentions: to be an industry leader, to become an industry leader, to be in a group of leaders, to move into a leading group, to move one or two positions in the industry ranking, to defeat a specific competitor (not necessarily the leader), to maintain one’s position, to survive.
Goals regarding your market share: aggressive expansion through both acquisition and internal growth, increasing share through internal growth (by reducing the shares of other firms), expansion through acquisition, maintaining existing market share, willingness to cede share to achieve short-term profit goals (emphasis on profitability rather than sales volumes).
Competitive position: becomes stronger, well fortified, able to defend its position, stays in a certain group, tries to move to a stronger position, becomes weaker but fights, tries to occupy a position that can be defended.
Nature of actions: predominantly offensive, predominantly defensive, a combination of offensive and defensive actions; aggressive, high risk-taking, conservative imitation.
Competitive strategy: leadership in cost reduction, focusing on a specific market niche (high-income group of the population, low-income buyers, geographically defined niche, buyers with special needs, etc.); product differentiation based on quality, additional services, technological superiority, assortment, company reputation, etc.

After the activities of each of the closest competitors are examined from this angle, analysts have the opportunity to confidently plan possible specific moves of competitors, the market segment where attacks should be expected, the competitive tools involved (prices, advertising, etc.) and others options. When the possible actions of nearby competitors become clear, it is then possible to plan a system of countermeasures to support one's own strategy, or measures aimed at strengthening one's own strategy, if the position of competitors allows this to be done.

Assessing the forces of competition

When assessing the forces of competition, M. Porter’s model is used, according to which competition in any industry is the interaction of five competitive forces:

competition among existing firms in the industry;
the potential threat of new competitors entering the industry;
enterprises in other industries producing substitute goods;
suppliers;
consumers.

The most significant competitive force is usually competition among existing firms in the industry.
It manifests itself in the desire of rival enterprises to improve their market position, in offensive actions in order to rise above competitors or defeat an individual competitor, in defensive tactics in order to defend their positions. The tools of intra-industry competition are: prices, product quality, appearance of products and packaging, guarantees, additional services, advertising, the ability to implement innovations, the power of one’s own or partner distribution network, and others. At this stage of the analysis, the task is to generally characterize intra-industry competition, determine the rules by which it is conducted in a given industry, and assess the strength of intra-industry competition at present and in the future.

The threat of new firms entering the industry is the next competitive force that needs to be analyzed. Serious consequences of the emergence of such firms are manifested in a decrease in the profitability of the industry, the struggle for the redistribution of markets, and an increase in marketing costs. The magnitude of the threat of the emergence of new firms depends on the profitability of the industry in relation to the average in the national economy and on the presence and significance of entry barriers.

Barriers to entry are obstacles that must be overcome to compete successfully by creating the necessary reserves to do so, and which do not usually exist for firms within an industry. Barriers to include:

Economies of scale. If this factor operates in the industry, then the newcomer must immediately enter large volumes in order to be competitive. This requires significant investment and organizational expertise.
Difficulty in accessing production experience and production secrets.
Customer orientation towards well-known brands and their commitment to products known to them.
Large capital requirements unrelated to economies of scale.
Specific industry advantages of existing firms, which a priori provide them with lower cost opportunities. For example, this may be related to access to raw materials or other resources, or to the most advantageous location.
Access to distribution channels. Existing firms are one way or another trying to bind members of distribution channels to themselves, which creates additional difficulties for newcomers.
State regulatory policy in relation to this industry.
International trade restrictions.

Suppliers, as a competitive force, can influence the competitive position of the industry by raising prices for their products. The extent to which they are able to do this, or how strong the threat of doing so, depends on the strength of the suppliers. are considered to have great power if the following conditions exist:

The products they supply are critical to the quality of the industry's products.
There is little or no competition from substitute products.
Supplier concentration is higher than in the industry.
Suppliers' products are differentiated.
The industry is not one of the most important customers.

Buyers, like suppliers, can influence the competitive situation in an industry with greater or lesser power. Buyers are considered to have great power when:

products are standardized and not differentiated;
buyers are insensitive to the costs associated with replacing suppliers;
the quality of products from buyers does not depend decisively on the products of the industry;
buyers are well informed about the industry situation.

The most unpleasant competitive situation in an industry occurs when competition among operating firms is strong, barriers to entry are low, competition from substitute products is strong, and suppliers and customers have sufficient power to influence the situation in the industry to achieve their goals.
However, even when all five forces of competition are significant, an industry may remain attractive to individual firms that manage to defend their positions through their strategies. A successful strategy must address two issues regarding competitive forces:

isolate your enterprise as much as possible from the negative influence of industry competitive forces;
use the current situation in the industry and the rules of the game to your advantage.