Management by Objectives (MBO)
Aligning Objectives With Organizational Goals
- n many organizations, it's hard to remember a time when non-managerial employees were kept in the dark about strategy.
We're often reminded about the corporate mission statement, we have strategy meetings where the "big picture" is revealed to us, and we're even invited to participate in some business decisions. We're also kept aware of how our day-to-day activities contribute to corporate goals.
This type of managing hasn't been around forever. It's an approach called Management by Objectives (MBO), a system that seeks to align employees' objectives with the organization's goals. In this article, we'll look at how you can use MBO to motivate and engage your team.
About the Tool
Peter Drucker developed MBO, and published it in his 1954 book, "The Practice of Management." It received a great deal of attention, and it was widely adopted until the 1990s, when it seemed to fade into obscurity.
The idea may have become a victim of its own success; it became such an integral part of modern business practice that it may no longer have seemed worthy of comment. Today, it has evolved into the Balanced Scorecard, which provides a more sophisticated framework for essentially the same process.
Advantages and Disadvantages
Using Management by Objectives with your team offers several benefits.
First, MBO ensures that team members are clear about their work and how it benefits the whole organization. It's easy to see why this type of managing makes sense: when the individual parts of an organization work well together, the whole operates smoothly and efficiently. By focusing on what you're trying to achieve, you can quickly distinguish between tasks that you must complete, and those that may not be worth your time.
Implemented on a team level, MBO can be seen in many of the key techniques