The critical success factors (CSFs) and key performance indicators (KPIs) that drive the success of IT and other service industries are equally essential for educational institutions. By systematically implementing these management principles, schools can transform their operations, ensuring not only academic excellence but also sustainable growth and development. This article explores how the adoption of CSFs and KPIs can revolutionize the education sector, positioning it to better meet the demands of the future workforce.
John F. Rockhart of MIT Sloan School of Management wrote that critical success factors (CSFs) are a limited number of areas which, if satisfactory, will ensure the competitive performance of an organization. All organizations aim for substantial profit margins each year as a significant sign of success. However, the success of companies isn’t solely based on external results but also on the day-to-day management of their people.
As with many other service industries, this success is not a random occurrence but the result of deliberate steps taken in their business models that foster growth. The most crucial service industries have been left on the sidelines for far too long: the educational industry. Education is fundamental to providing the next workforce, great thinkers, heads of households, and much more. So why aren’t we streamlining the way this crucial industry operates?
Importance of CSFs and KPIs
Most educational institutions are considered simply as a necessity for society and not as companies that need to keep their customers satisfied. The concept of having an economic moat often seems irrelevant when comparing prestigious institutions to government-run ones.
In education, success is measured by students performing well in exams. Many students who are accepted to prestigious high schools are more likely to be accepted into tertiary institutions and secure job placements in the near future. Educational institutions could have well-defined key performance indicators (KPIs) and critical success factors (CSFs), similar to other service industries, to secure a competitive edge and successful operations, as their success shoulders the society in which we live.
Yet are we giving full attention to selecting our KPIs and CSFs crucially since we are educating the future leaders, workers, heads of households, discoverers, inventors, and more?
There are four types of performance measures: performance indicators that are mainly non-financial and can often be traced back to a team; results indicators, which are both financial and non-financial; key result indicators, which are measured monthly, bimonthly, or quarterly; and key performance indicators, which are measured daily and frequently.
Case Study: Educational Institutions
If student success is key and students are seen every day as more than potential customers, then a well-chosen KPI is essential. A KPI can be fundamental to an organization's well-being. Selecting a KPI is a rare and critical task for the successful daily functions of any organization. There might be several things that stand out, but it should be noted that many organizations have no more than ten KPIs and very few with close to thirty to achieve success. KPIs should be simple enough that all employees can understand and monitor them daily. A KPI will impact many of the organization's critical success factors, which we will discuss shortly.
Before becoming a KPI, a performance measure needs to be tested to ensure it benefits the organization. From the head of the institution to the parents, this KPI should be understood and implemented as soon as it affects the students and the institution's performance. In the journal article by Sfakianaki, E., Kakouris, A., & Siontorou, C. (2021). Critical success factors for total quality management in primary and secondary education. International Journal of Services and Operations Management, 40(4), 1-564-595 provide a comprehensive literature review of the importance, implementation, and development of Total Quality Management (TQM) from its inception in the manufacturing industry to later adoption in other service providers. They developed an instrument to test CSF for TQM in the Greek primary and secondary education system based on Saraph et al. (1989) work on psychologist tools for determining CSF for social sciences. TQM is cited as “a philosophy used to improve customer satisfaction and organizational performance (Deming, 1986), along with the cohesiveness, competitiveness, effectiveness, efficiency, and flexibility of the business as a whole (Dahlgaard-Park, 2011).”
The importance of TQM implementation rests on the accepted standard and philosophy outlined in the World Education Forum of UNESCO in Dakar in 2000; it maintains that quality is the heart of education. Quality influences students’ learning, how well they learn, and the benefits they can draw from education (World Education Forum, 2000). The conclusion of the paper states that the authors found a linkage between TQM and CSF successfully. They refute the claim by others that TQM may not be applicable to education. Overall, it can be, through developments made to its present form. There are applications of TQM in services and tactics in education, solving complex problems in the management of schools.
In resolving the enabling factors for TQM for educational institutions of primary and secondary schools, Sfakianaki et al. came up with seven factors for their instrument:
Leadership
Student Focus
Continuous Improvement
Process Control and Involvement
Education and Training
Measurement and Evaluation
Change Management
Implementing TQM in Education
At a prestigious high school in the Caribbean, which is privately run, they have implemented a management system that outlines for their staff key result areas and measures that result in actionable steps made by staff regularly to ensure the success of their institution. Annually, they produce several scholarships and a 100% pass rate of their students taking examinations. They focus on six pillars that are critical success factors, clear and known to all stakeholders involved. Furthermore, they focus their staff on key performance indicators measured quarterly to ensure alignment with their school's pillars. This model allows successful outcomes to be managed rather than gained randomly. In schools where there exist high expectations for students upon graduation, and there exists a sense of community, students perform well.
Though TQM has been adopted internationally in many developed countries, it is still to be adopted and accepted in other service industries worldwide as a crucial dependency for providing quality satisfaction and the success of students. The article’s authors highlight the lack of empirical research in education. This lack of appreciation for outlining CSFs and KPIs can also be seen in other industries, as David Parmenter writes in Key Performance Indicators: Developing, Implementing, and Using Winning KPIs. There appears to be an overall consensus that the lack of implementation and correct adoption of such important management operations is widespread.
Without a clear agreement on CSFs, a manager will determine what is important from their point of view instead of relying on quality indicators that aid a company's success. When drafting a strategic plan, CSFs play a crucial role. Parmenter writes that the objective of the CSFs is to focus the staff every day to align their efforts with strategic initiatives. He highlights that some in leadership want CSFs to be focused on what they consider deliverables or external outcomes. Yet CSFs result from actions taken daily for a sustained period, along with strategic initiatives that provide external outcomes. The two are distinct: critical success factors and external outcomes.
In choosing CSFs within a service industry like education, we can see from Sfakianaki et al.'s work that they can be a limited number whereby managers can monitor daily. Success results from all staff focusing on these factors daily. Nor is it surprising to senior management or the board of any organization or institution. The CSFs are focused on the organization and fall within five to eight in number, linked to the company’s mission, values, and strategies.
Measuring progress that aids any organization's success is no small feat in management. Yet obtaining these important measures to facilitate management could provide many beneficial outcomes for all stakeholders. It saves the organization unnecessary meetings, creates leaner reporting activities, reduces the number of measures monitored by management, and encourages CEO connections with staff. Is this level of communication seen within the educational industry?
Learning from Other Industries
Looking at an example from the airline service industry, we see it was apparent in British Airways (BA) success. A senior official at the airline hired consultants who would report on one key measure that could be used to turn around the airline's perception in the 1980s. The consultants found the one critical success factor the senior official needed to focus on, which was the timely arrival and departure of their planes. Through the efforts of the senior official, managers knew they would receive a personal call if their department failed to deliver on this outlined measure. If a plane was delayed by a certain threshold, contact was made and explanations and immediate adjustments had to be made. This case was focused on in Parmenter, D. (2010). Key performance indicators: Developing, implementing, and using winning KPIs. John Wiley & Sons. Further to BA's success was their implementation of investments in technology, fleet renewal, customer service enhancements, sustainability initiatives, and partnerships and alliances. They also adhered to industry standards in enhancing safety culture, and crew resource management, which brought about a reduction in mitigation speech and cultural sensitivity. Successful implementation and identification of this critical success factor was key to BA's success known today. This example shows that a methodology of effective communication with staff bypassing bureaucratic tape from higher up to employees was effective in maintaining quality. Thus, a winning KPI and CSFs are key to the turnaround and success of any organization.
Some of these factors considered by BA can also be implemented in education, such as technology investments, sustainability, and open and clear communication can be used to achieve similar success.
Identifying Critical Success Factors and KPIs
Once a critical success factor is found, it becomes easy to find the most influential key performance indicator. A critical success factor affects several areas in an organization and relies upon key performance indicators. Defining a critical success factor involves making it specific, measurable, achievable, relevant, and time-sensitive. Since it must be understood by all staff, the language must be clear so that activity can take place upon hearing it. It is the guide that all staff treat as their main day-to-day activity. It is not to be confused with a key result area, which consists of duties and tasks performed. In high-performing schools, a critical success factor can be parental involvement in their child's school work and life, student engagement, high expectations and standards set, and a sense of community to further add to winning KPIs and critical success factors.
Identifying Critical Success Factors and KPIs
Once a critical success factor is found, it becomes easier to identify the most influential key performance indicator. A critical success factor affects several areas in an organization and relies on key performance indicators. Defining a critical success factor involves making it specific, measurable, achievable, relevant, and time-sensitive. Since it must be understood by all staff, the language must be clear so that action can be taken upon hearing it. It is the guide that all staff treat as their main day-to-day activity. It is not to be confused with a key result area, which consists of duties and tasks performed.
In high-performing schools, a critical success factor can be parental involvement in their child's schoolwork and life, student engagement, high expectations and standards, and a sense of community. These contribute to winning KPIs and critical success factors.
Practical Steps for Educational Institutions
For an educational institution to adopt CSFs suitable to their institution, over the course of possibly a two-day workshop create a team that can:
Identify the key senior management and owners of the institution
Incorporate representatives from all stakeholders in the process
Understand the mission of the institution and the vision
Brainstorm the strategic objectives
Use the process of interviews and workshops to define CSFs
Align these with the mission and vision
Conclusion
In educational institutions, implementing KPIs may seem complicated, but as with other service industries, it can be done with the will to push for successful outcomes. Implementing key success factors for the progress of their students and their success will drive success for all stakeholders. This also helps to move an organization forward, as organizations that drive CSFs forward tend to have an edge in all that they do.
References
Parmenter, D. (2010). Key performance indicators: Developing, implementing, and using winning KPIs. John Wiley & Sons.
Sfakianaki, E., Kakouris, A., & Siontorou, C. (2021). Critical success factors for total quality management in primary and secondary education. International Journal of Services and Operations Management, 40(4), 1-564-595.
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