Critical Success Factor
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 your business. 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.
A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:
* Money: positive cash flow, revenue growth, and profit margins.
* Your future: Acquiring new customers and/or distributors.
* Customer satisfaction: How happy they are.
* Quality: How good is your product and service?
* Product or service development: What's new that will increase business with existing customers and attract new ones?
* Intellectual capital: Increasing what you know is profitable.
* Strategic relationships: New sources of business, products and outside revenue.
* Employee attraction and retention: Your ability to extend your reach.
* Sustainability: Your personal ability to keep it all going.
Key success factors generally include exceptional management of several of the following:
* Product design
* Market segmentation
* Distribution and promotion
* Pricing
* Financing
* Securing of key personnel
* Research and development
* Production
* Servicing
* Maintenance of quality/value
* Securing key suppliers
* New product development
* Good distribution
* Effective advertising
* Innovative response to customer needs
* Consumer loyalty
* Linkage of technology to market demand
* Link marketing to production
* Investment in growth markets
* Unique positioning advantage
* Strong brand image and awareness
* Prevention of price wars
* High product quality
* Patent protection
* Low product cost
* Large marketing resource budget
* Marketing research quality
* Information system power
* Analytic support capability
* Develop human resources
* Attract the best personnel
* Managerial ability and experience
* Quick decision and action capability
* Organizational effectiveness
* Learning systematically from past strategies
(http://en.wikipedia.org/wiki/Critical_success_factor)
The success of a Knowledge Management initiative depends on many factors, some within our control, some not. Typically, critical success factors can be categorized into five primary categories:
1. leadership;
2. culture;
3. structure, roles, and responsibilities;
4. information technology infrastructure; and
5. measurement.
Leadership
Leadership plays a key role in ensuring success in almost any initiative within an organization. Its impact on KM is even more pronounced because this is a relatively new discipline. Nothing makes greater impact on an organization than when leaders model the behavior they are trying to promote among employees. The CEO at Buckman Laboratories, a chemicals company, champions the cause for KM within the organization and personally reviews submissions to its knowledge bank. When he notices that a particular employee has not had been active within the system, he sends a message that reads: "Dear associate, you haven't been sharing knowledge. How can we help you? All the best, Bob."
Several other best-practice organizations have demonstrated this commitment to KM. At the World Bank, the president's support led to the creation of an infrastructure that promoted and supported the growth of communities of practice (CoPs) not only throughout the organization, but also around the globe. Today, the World Bank has sustained its KM initiative through its CoPs. Its knowledge managers constantly search for new approaches to knowledge sharing.
Although leadership plays a critical role in the success of the KM initiative, the "culture" factor can be even more important to the success of Knowledge Managment.
Culture
Culture is the combination of shared history, expectations, unwritten rules, and social customs that compel behaviors. It is the set of underlying beliefs that, while rarely exactly articulated, are always there to influence the perception of actions and communications of all employees.
Cultural issues concerning KM initiatives usually arise due to the following factors:
• Lack of time - The goal is not to encourage the employees to work more, but to work more effectively. The processes, technologies, and roles designed during a KM initiative must save employees' time, not burden them with more work. This can only be accomplished if the employees' work patterns are accounted for during the initial design and planning phase of the initiative.
• Unconnected reward systems - Organizations have to maintain a balance between intrinsic and explicit rewards in order to encourage employee behavior. The most effective use of explicit rewards has been to encourage sharing at the onset of a KM initiative. If the attendees don't find value in either the meetings or the information on the system, providing incentives will not sustain their participation. People share because they want to, they like to see their expertise being used, and they like being respected by their peers.
• Lack of common perspectives - Sharing must be inspired by a common vision. The people affected by the new process or technology must all buy in to this vision and believe it will work.
• No formal communication - When designing and implementing KM initiatives, ensure that employees and customers know about the changes occurring in your organization. It has been hypothesized that a person needs to hear the same message at least three times before it registers in the brain. Hence, communication should be pervasive. While implementing KM within your organization, market yourself. Make sure everyone knows what you are attempting to do, and build anticipation for the launch.
If your organization naturally has a tendency to share knowledge, enabling knowledge sharing becomes a little easier. If your organization harbors a knowledge-hoarding culture, don't give in to it. Remove negative consequences to sharing. People want to share their knowledge. They want others to know they are knowledgeable. Break down some of the existing barriers to knowledge sharing, and give people the tools and environment they need. By designing KM initiatives around your culture, you will be initiating a cultural change.
Structure, Roles, and Responsibilities
Although there are many ways that organizations structure the governance of their KM initiatives, APQC has found common elements among best-practice partner organizations: a steering committee, a central KM support group, and stewards/owners throughout the organization who are responsible for KM. It is a combination of a centralized and decentralized approach.
The steering committee usually consists of executives at the top level. They promote the concept and provide guidance, direction, and support. The central KM group is typically made up of three to four people who provide the initial support for projects or initiatives, which are usually handed over to the business owners once they are implemented. The central group usually consists of people with advanced project management, facilitation, and communication skills. The stewards, or owners, are responsible for knowledge sharing and acquisition within the business units. Like the core KM group, the stewards are change agents for the organization. They model and teach employees the principles of knowledge sharing using a common vocabulary. All of these participants work as a team to prevent a silo mentality and incorporate resistant employees in the process.
Although the structure is put in place to establish ownership and accountability, if there is no overall ownership of knowledge and learning within the organization and the leadership does not "walk the talk," it will be difficult to sustain any sharing behavior.
sharing using a common vocabulary. All of these participants work as a team to prevent a silo mentality and incorporate resistant employees in the process.
Although the structure is put in place to establish ownership and accountability, if there is no overall ownership of knowledge and learning within the organization and the leadership does not "walk the talk," it will be difficult to sustain any sharing behavior.
Measurement
Most people fear measurement because they see it as synonymous with ROI, and they are not sure how to link KM efforts to ROI. Although the ultimate goal of measuring the effectiveness of a KM initiative is to determine some type of ROI, there are many intervening variables that also affect the outcomes.
Because many variables may affect an outcome, it is important to correlate KM activities with business outcomes, while not claiming a pure cause-and-effect relationship. Increased sales may be a result not only of the sales representatives having more information, but also of the market turning, a competitor closing down, or prices dropping 10 percent. Due to the inability to completely isolate knowledge-sharing results, tracking the correlations over time is important There is a final imperative concerning critical success factors, which transcends KM and applies to all interactions: Listen! Listen to your users, customers, and managers-whichever audience for which you are designing. They will tell you how you can meet their needs and have a successful KM initiative.
(http://www.providersedge.com/docs/km_articles/Critical_Success_Factors_of_KM.pdf)
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 your business. 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.
A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:
* Money: positive cash flow, revenue growth, and profit margins.
* Your future: Acquiring new customers and/or distributors.
* Customer satisfaction: How happy they are.
* Quality: How good is your product and service?
* Product or service development: What's new that will increase business with existing customers and attract new ones?
* Intellectual capital: Increasing what you know is profitable.
* Strategic relationships: New sources of business, products and outside revenue.
* Employee attraction and retention: Your ability to extend your reach.
* Sustainability: Your personal ability to keep it all going.
Key success factors generally include exceptional management of several of the following:
* Product design
* Market segmentation
* Distribution and promotion
* Pricing
* Financing
* Securing of key personnel
* Research and development
* Production
* Servicing
* Maintenance of quality/value
* Securing key suppliers
* New product development
* Good distribution
* Effective advertising
* Innovative response to customer needs
* Consumer loyalty
* Linkage of technology to market demand
* Link marketing to production
* Investment in growth markets
* Unique positioning advantage
* Strong brand image and awareness
* Prevention of price wars
* High product quality
* Patent protection
* Low product cost
* Large marketing resource budget
* Marketing research quality
* Information system power
* Analytic support capability
* Develop human resources
* Attract the best personnel
* Managerial ability and experience
* Quick decision and action capability
* Organizational effectiveness
* Learning systematically from past strategies
(http://en.wikipedia.org/wiki/Critical_success_factor)
The success of a Knowledge Management initiative depends on many factors, some within our control, some not. Typically, critical success factors can be categorized into five primary categories:
1. leadership;
2. culture;
3. structure, roles, and responsibilities;
4. information technology infrastructure; and
5. measurement.
Leadership
Leadership plays a key role in ensuring success in almost any initiative within an organization. Its impact on KM is even more pronounced because this is a relatively new discipline. Nothing makes greater impact on an organization than when leaders model the behavior they are trying to promote among employees. The CEO at Buckman Laboratories, a chemicals company, champions the cause for KM within the organization and personally reviews submissions to its knowledge bank. When he notices that a particular employee has not had been active within the system, he sends a message that reads: "Dear associate, you haven't been sharing knowledge. How can we help you? All the best, Bob."
Several other best-practice organizations have demonstrated this commitment to KM. At the World Bank, the president's support led to the creation of an infrastructure that promoted and supported the growth of communities of practice (CoPs) not only throughout the organization, but also around the globe. Today, the World Bank has sustained its KM initiative through its CoPs. Its knowledge managers constantly search for new approaches to knowledge sharing.
Although leadership plays a critical role in the success of the KM initiative, the "culture" factor can be even more important to the success of Knowledge Managment.
Culture
Culture is the combination of shared history, expectations, unwritten rules, and social customs that compel behaviors. It is the set of underlying beliefs that, while rarely exactly articulated, are always there to influence the perception of actions and communications of all employees.
Cultural issues concerning KM initiatives usually arise due to the following factors:
• Lack of time - The goal is not to encourage the employees to work more, but to work more effectively. The processes, technologies, and roles designed during a KM initiative must save employees' time, not burden them with more work. This can only be accomplished if the employees' work patterns are accounted for during the initial design and planning phase of the initiative.
• Unconnected reward systems - Organizations have to maintain a balance between intrinsic and explicit rewards in order to encourage employee behavior. The most effective use of explicit rewards has been to encourage sharing at the onset of a KM initiative. If the attendees don't find value in either the meetings or the information on the system, providing incentives will not sustain their participation. People share because they want to, they like to see their expertise being used, and they like being respected by their peers.
• Lack of common perspectives - Sharing must be inspired by a common vision. The people affected by the new process or technology must all buy in to this vision and believe it will work.
• No formal communication - When designing and implementing KM initiatives, ensure that employees and customers know about the changes occurring in your organization. It has been hypothesized that a person needs to hear the same message at least three times before it registers in the brain. Hence, communication should be pervasive. While implementing KM within your organization, market yourself. Make sure everyone knows what you are attempting to do, and build anticipation for the launch.
If your organization naturally has a tendency to share knowledge, enabling knowledge sharing becomes a little easier. If your organization harbors a knowledge-hoarding culture, don't give in to it. Remove negative consequences to sharing. People want to share their knowledge. They want others to know they are knowledgeable. Break down some of the existing barriers to knowledge sharing, and give people the tools and environment they need. By designing KM initiatives around your culture, you will be initiating a cultural change.
Structure, Roles, and Responsibilities
Although there are many ways that organizations structure the governance of their KM initiatives, APQC has found common elements among best-practice partner organizations: a steering committee, a central KM support group, and stewards/owners throughout the organization who are responsible for KM. It is a combination of a centralized and decentralized approach.
The steering committee usually consists of executives at the top level. They promote the concept and provide guidance, direction, and support. The central KM group is typically made up of three to four people who provide the initial support for projects or initiatives, which are usually handed over to the business owners once they are implemented. The central group usually consists of people with advanced project management, facilitation, and communication skills. The stewards, or owners, are responsible for knowledge sharing and acquisition within the business units. Like the core KM group, the stewards are change agents for the organization. They model and teach employees the principles of knowledge sharing using a common vocabulary. All of these participants work as a team to prevent a silo mentality and incorporate resistant employees in the process.
Although the structure is put in place to establish ownership and accountability, if there is no overall ownership of knowledge and learning within the organization and the leadership does not "walk the talk," it will be difficult to sustain any sharing behavior.
sharing using a common vocabulary. All of these participants work as a team to prevent a silo mentality and incorporate resistant employees in the process.
Although the structure is put in place to establish ownership and accountability, if there is no overall ownership of knowledge and learning within the organization and the leadership does not "walk the talk," it will be difficult to sustain any sharing behavior.
Measurement
Most people fear measurement because they see it as synonymous with ROI, and they are not sure how to link KM efforts to ROI. Although the ultimate goal of measuring the effectiveness of a KM initiative is to determine some type of ROI, there are many intervening variables that also affect the outcomes.
Because many variables may affect an outcome, it is important to correlate KM activities with business outcomes, while not claiming a pure cause-and-effect relationship. Increased sales may be a result not only of the sales representatives having more information, but also of the market turning, a competitor closing down, or prices dropping 10 percent. Due to the inability to completely isolate knowledge-sharing results, tracking the correlations over time is important There is a final imperative concerning critical success factors, which transcends KM and applies to all interactions: Listen! Listen to your users, customers, and managers-whichever audience for which you are designing. They will tell you how you can meet their needs and have a successful KM initiative.
(http://www.providersedge.com/docs/km_articles/Critical_Success_Factors_of_KM.pdf)
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