A critical success factor or CSF is exactly what it sounds like: something that is critical to the success of your project or organization. CSFs are three to eight key factors that have a direct impact on your project's viability and must be performed at the highest possible level if you want to succeed. Defining them is easy, but identifying a list of critical success factors for a given project may be harder.


Critical success factors are the things that must go right if your business, organization or project is to succeed. A critical success factors example could be hiring experienced employees, customer loyalty or good risk management policies.

A Critical Success Factors Example

It is easy to think that almost everything you are managing is critical to your project's success. However, CSFs are a special category:

  • They are vital to your success.
  • They benefit the project; obstacles that must be overcome are not CSFs.
  • They relate to a high-level goal, and to your company's business strategy. 

It is easier to grasp if you look at a critical success factor example or two. A typical list of critical success factors in the business world include:

  • A good, experienced team leader.
  • Committed employees.
  • Goals and deliverables that are attainable and measurable.
  • Your project follows best industry practices.
  • You establish proper risk management policies.
  • Good communication within the project team.
  • Effective project planning. 

All CSFs Are Not Alike

Drawing up a generic list of critical success factors will not do you any good. Businesses and industries have different success factors. Good people skills may be a top CSF for retail employees, but manufacturing requires a different set of employee talents. Following safety regulations is a CSF for construction companies, but not such a big deal at an accounting firm.

CSFs differ among businesses based on four things:

  • Different industries each have their own CSFs. Tech manufacturing, for instance, needs to manufacture high-quality, low-defect products. Accounting firms do not have that CSF but they do have a code of professional ethics they have to abide by. 
  • Different competitive strategies create different CSFs. Whether you are competing on price, quality or brand recognition, you will have a relevant list of critical success factors.
  • Environmental CSFs result from economic or technical changes. 
  • Temporal CSFs result from internal organizational needs. If a hierarchical organizational structure starts using project teams to solve problems, good team leadership is now a CSF.

Identifying Your CSFs

While you can easily find a critical success factors example list online, it is more productive to do the work and draw up your own list of critical success factors from scratch.

  • Draw up a list of factors influencing your progress toward your goals. Do not do it alone: ask for feedback from your team, your upper-level managers and your stakeholders.
  • Decide which of the factors are critical to your success. One way to do this is to look at whether they have a major effect on your company's strengths, weaknesses, opportunities and threats (SWOT).
  • Prune the list down to a manageable number. Different sources recommend different numbers, for example, three, five, eight or even more. 
  • Once you have your list of critical success factors, set metrics. How will you measure your team's CSF performance? How will you monitor performance?
  • Spread the word. Communicate the list of critical success factors you have selected so everyone knows these are a top priority.
  • Document your selection process, metrics and list. That will help draw up lists for other projects as well as make it easier for the next team leader to take over. 

What Makes a Good CSF?

When selecting your CSFs, you should be able to fit them to the SMART acronym for goal setting. A useful CSF should be:

  • Specific. "99.99 percent of products are defect-free" is better than "produce better quality goods."
  • Measurable. "Recruit top employees" is a valid goal, but how do you quantify "top"? Saying, "Half of our IT department will have at least two certifications" is a goal you can measure.
  • Achievable. "Become a bigger name than Disney in the entertainment industry" is probably overly ambitious for a start-up filmmaker.
  • Relevant. Suppose you run a small boutique operation and prefer to stay small. Even if everyone tells you success is measured by growth, CSFs about doubling your size are not relevant to your goals.
  • Time-bound. Good CSFs have deadlines, whether it is next week, next year or five years down the road. 

Critical Success Factors and Key Performance Indicators

Critical success factors are sometimes confused with another important metric, key performance indicators (KPI). Critical success factors and key performance indicators are separate things, even though you may hear people use the terms interchangeably.

Critical success factors are input. They are the things you need to win. KPIs are output: they are a measure for judging how well your company or your team is performing and whether you really are winning. Your KPI could be increased sales, a growth in customer satisfaction or a rise in profits.

When goal-setting, you can distinguish CSFs, KPIs and targets this way:

  • The CSF is something you need to achieve your goal.
  • The KPI tells us if the CSF is working.
  • When you reach the target, you know you are on track to achieving your goal. 

Using CSFs and KPIs

KPIs are useful performance measures but they can not tell you why performance is up or down. CSFs are valuable for generating the internal improvements that lead to stronger KPIs.

Like choosing the right CSF, you need to pick KPIs that reflect your goals. Suppose your company's goal is to brand yourself as manufacturing the best quality merchandise in your industry. A CSF example might be buying more expensive, higher-grade raw materials; the KPI might be growth in brand recognition.

Neither CSFs or KPIs are an end in themselves, though. They are most effective when you use them as a measure of your overall strategic plan or company goals. Suppose you want to engage with your customers on social media, so you set a KPI of doubling the number of tweets or blog posts you put out. If the quality drops because you are putting out such a high volume of content, you may end up with less engagement and interest.

Employing Critical Success Factors

Drawing up a list of critical success factors does not achieve any goals by itself. You have to put the list into action, monitor your team's performance and then course-correct if you are falling short of achieving the CSFs. There are steps you can take to keep your progress on track:

  • Make sure everyone you need to achieve your goals is on board with your CSFs.
  • Appoint one employee or team member to be a champion for a particular CSF.  They keep everyone involved on track and moving toward the goal. Champions can also be in charge of communication, announcing the CSFs and providing updates on progress.
  • Track CSFs. Set a reasonable timetable for doing this. While it might be worth tracking sales growth on a weekly basis, growth in quarterly income would need to be tracked quarterly. 

It is important to incorporate the use of CSFs into your overall strategy for the long term. Do not think of it as a one-time trick to give you a win, think of it as something that can help you consistently if you use it consistently.