Management by Objectives – Why?

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Management by objectives. Why? What is the perceived goal? What is the origin of this approach and why did anybody in his right mind think that it would work?

Maybe it stems from the thinking that we can impose tasks on people and that, by itself, will motivate them to do what they need to do. Old school thinking, if you ask me. Unfortunately, this is how many companies are managed and this practice usually only works when a high degree of self discipline and self motivation exists in the followers.

Q: But what happens when motivation and discipline erodes? How does a leader regain the lost ground when self motivation dies?

A: Good leadership steps in the motivation gap and fills it with appropriate tools and practices that brings out the very best in people.

Even in military circles, this type of management by objectives approach has been proved wrong. The best soldiers are the ones that are motivated, self disciplines, and are empowered to take action by themselves. This is achieved by making them decide what the objective are based on guidance and mentoring.  It is followed by instilling in them a sense of invincibility about these their objectives.

“Leadership is the art of getting someone else to do something you want done because he wants to do it” ~Dwight D. Eisenhower

This continuous cycle of empowering, motivating and inspiring applies in any environment and embodies the difference between leadership and management – a topic that has been widely discussed in the blogosphere. Essentially, it boils down to this: You mange a process and but you have to lead people. That is the difference.

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You can set goals and metrics for a process, but that will eventually backfire with people. You can set short term goals on occasion and it will work, but basing one’s leadership style on a “management by objectives” approach with no regard for what drives and motivates your people is simply not going to work.

The works of  W. E. Deming, statistician, professor, and author helps put all of this in perspective. Although an unlikely source, Deming provides some of the most inspiring thoughts on the topic of leadership and management. His profound views on what is required to attain superior quality are enrooted in leadership.

Deming describes “The deadly 7 diseases” – of management:

  1. Lack of constancy of purpose.
  2. Emphasis on short-term profits.
  3. Evaluation by performance, merit rating, or annual review of performance.
  4. Mobility of management.
  5. Running a company on visible figures alone.
  6. Excessive medical costs.
  7. Excessive costs of warranty, fueled by lawyers who work for contingency fees.

Another interesting source to learn about the difference between leadership and management is through the achievements of lean organizationsLean is a set of principles that come from the Japanese manufacturing industry, specifically Toyota. Lean focuses on the elimination of waste in order to achieve business success. It is a very widely used concept in the manufacturing industries and has spilled over to many other industries, such as healthcare.

Although much focus is put on the techniques and tools in this domain, many are just now discovering that the fundamental principles have to do with people, management and leadership. One the most remarkable things that I have experiences when observing lean organization is the fact that there are no heroes, not one person that everybody points out and said it was him. They have one of the most highly motivated workforces imaginable and their success speaks for itself.

What are some of the most effective “processes” that you have seen in leading people toward an effective outcome? Please share your experiences where you have seen better results through better leadership processes.

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Gilad Langer is Consulting manager at NNE Pharmaplan

He can be reached at gilad.langer@gmail.com

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7 Responses

  1. Gilad,

    I’ve done a lot of research around Lean and spoken to many experts of late (Mark Graban at leanblog.org shares exceptional insights almost daily) as our organization has launched a relevant simulation (www.experiencepoint.com/sims/Lakeview).

    In forming the case study for the sim and in speaking with experts afterwards, it’s become very clear that a mastery of lean tools won’t translate into succcessful lean transformations. There has to be a change leadership methodology in place and respected. Our new sim is actually focused much, much more on change leadership than on lean practices.

    We have a change model based on Kotter’s work, but there are many other great examples out there that can feed the motivation/empowerment cycle you describe. And while you state that there “are no heroes” in lean, most change leadership models require a champion and core team to lead the initial push, at least.

  2. Andrew,

    Thanks for your feedback. It is always nice to hear some re-enforcing feedback on this topic. BTW I do agree in Lean the roles of guide and mentor are both important and indispensable.

  3. [...] Management by Objectives – Why? by Gilad Langer – “You can set goals and metrics for a process, but that will eventually backfire with people.” [...]

  4. The best option that I have ever witnessed is by the best selling auto dealership in the country. It was done with collaboration of the whole staff. They had a weekly meeting where everyone had to have come up with an answer from clerks and mechanics: the question is what can we do to selll more cars this week?

    Kudos for a great article

  5. I thought that MBO, Management By Objective, died out sometime back in the late 80’s or ’90’s after other silly management fads hit the market.
    Interestingly enough, MBO DID NOT depend on externally imposed objectives set by THEM, the bosses, AKA Management. It was supposed to be a collaborative process between the boss and each employee to set mutually agreed to goals and the necessary resources to attain them.
    Effectively it was “Management by Self Incrimination”.

  6. You can set goals and metrics for a process, but that will eventually backfire with people. You can set short term goals on occasion and it will work, but basing one’s leadership style on a “management by objectives” approach with no regard for what drives and motivates your people is simply not going to work.

    Great synopsis of the problem! Can I quote you?

  7. Vincent and Jacqueline, thanks for you insightful comments. And Jacqueline, yes you can quote me anytime.

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