A critical success factor is a performance area of crucial importance in achieving organizational excellence. There are at least two broad categories of critical success factors that are common to virtually all organizations: 1) systems processes, and 2) human processes. The focus of this post is on the human process areas, yet this is not to imply that they are more important than the systems processes. Both are essential to building great organizations.

To a large extent, every human process issue is a critical success factor. Every person has been important since people first formed organizations to accomplish tasks too big to be performed by individuals working alone—and every person will continue to present unique challenges as long as people work together. The shape each person takes is constantly evolving to fit changing circumstances, but every once in awhile, major shifts occur which dramatically change what’s required in each of these critical areas. We’re experiencing such a shift right now—moving deeper into a knowledge-based economy.

Globalization and information technology are placing different, challenging demands on leaders and organizations in virtually every performance area. Following are some highlights of these changes…

1. Leadership/Management: “Command and control” leadership carried many organizations to very high levels of financial performance during periods when competition was not so great and things didn’t change very fast, but its time has passed. The demands on the total organization are too great for a few people at the top to call all the shots.
2. Communication: In most organizations, there have been 3 pervasive patterns that will no longer work in knowledge-based organizations: a) the primary flow of information was vertical — within departmental walls that were often impermeable, b) information was hoarded and used as a source of power over others, and c) people at the top often withheld crucial strategic information from those lower in the organization in the belief they couldn’t handle it.
3. Teamwork: Teamwork is more crucial to producing results today than ever before, and at the same time, the very nature of teams and their functions are changing rapidly. In the past it was typical to go for long periods — even an entire career — as the member of one functional team. Today, membership on more than one team is the norm, and it is unlikely that anyone entering the workforce will remain on the first team they join for more than a year at most.
4. Alignment: Process reengineering and systems thinking are moving strategic alignment back to the top of many organizational agendas. It has become crystal clear that many of the greatest opportunities for productivity improvement lie at the interfaces of the processes used to achieve organizational goals — and it is fruitless to excel in one process while lagging in others.
5. Conflict Management: The new economy increases the potential for conflict in virtually every area of organizational life. Stakeholders are more informed and frequently more demanding. Staff are being asked to do more with less — without the promise of job security that existed in the past; aligning self-interests with corporate interests is not as simple as it used to be. Different cultures are constantly being reintroduced and set the stage for major internal conflicts and power struggles. Developing good conflict resolution skills needs to be high on everyone’s personal and corporate agendas.
6. Embracing Change: Individuals and organizations that change before they have to will be the winners in this new organizational season. People vary a lot in their tolerance of change and in the degree to which they actively seek change in their lives. It is difficult to grasp the potential for the continuing acceleration of change on a global scale. With more people having more access to information, it is reasonable to expect more innovation and more competition on a daily basis. Merely accepting change and learning to tolerate it will not be enough to successfully engage the opportunities that present themselves. We must become eager seekers of change.
7. Organizational Learning (Life-long Development): Leaders and managers have always given lip service to the notion of people being their most important asset and to the need for continuous training and development. In most organizations, however, it has been no more than a notion. Most have not been consistent in this crucial area. The same organization that will spend $5,000 a year to maintain a copy machine will not spend $500 to develop a staff member. Of all the key success areas, this one is changing the most. The future belongs to learners — to individuals that take responsibility for updating their skills and knowledge, to teams that consciously develop the deep dialogue that enables team members to learn from one another, and to organizations that continuously improve their ability to transform data into value-added, actionable information to serve stakeholders.