Management By Objectives: What Are MBO's?
Many have heard the term Management by Objectives or MBO but what is an MBO or Management by Objectives? This is a style of management that involves committing to a set of objectives or measurable milestones within a set period of time say a quarter during the business year. Typically Management by Objectives is done on an organizational basis. Each team writes a set of MBO’s, these are deliverables that will be done in the current quarter. The team submits their MBO’s to the management team above them which then rolls those MBO’s into their own set of MBO’s. Each time the list of MBO’s are rolled up they get more broad and generalized. The lower in the organization the more specific the MBO’s should be.
Writing effective MBO’s. When you are writing your MBO’s you want to be careful to ensure each MBO is measurable or else how would you determine when it is complete? Assign a date to each MBO and stick to it. This will help you prioritize MBO’s throughout the quarter. Typically a team will have 3-6 MBO’s with possible sub deliverables within the MBO. Whan crafting your MBO’s be careful to write them with deliverables that are within your control. I always try to ensure that the success of my MBO is not dependent on others outside of my team of employees. If my MBO involves participation with another management group or department I write my MBO with my part of the project in mind. This generally lets me deliver my portion of the project regardless of the performance of others.
During the quarter and certainly at the end the lists of MBO’s are scored. This score is now the business and management teams can determine if they are on track. Did the business or employee teams meet the objectives they set when writing the MBO’s? If the score is high then the organization is on track. If not then the management teams need to determine why what was done or not done is not in line with MBO’s written by the teams and organization. Hopefully the MBO’s are generally complete each quarter and the business moves forward with a purpose.