From the Ask Tom mailbag –
Question:
I would like to roll out a goal-setting program for my team. Management by objectives (MBO) is a process where everyone in the company is required to set annual goals. I think it will go a long way toward results based performance.
Response:
The big failure of MBO is the focus on annual goals. If you look at the sequence below, you can see that MBO is appropriate for only a small slice of your workforce, and some of the most important goals and objectives are beyond two years.
Goals Framework and Timespan
- S-V business unit president – longest timespan goals – five years to ten years
- S-IV executive manager, VP – longest timespan goals – two years to five years
- S-III manager – longest timespan goals – 12 months to two years
- S-II supervisor – longest timespan goals – three months to 12 months
- S-I technician, production – longest timespan goals – one day to three months
Goals and objectives should cascade through the organization starting with the longest timespan goals first, most often from the CEO. Each successive layer should have shorter timespan goals that support the goals from the layer above. You can also see, based on timespan, that longer timespan goals are more strategic (conceptual) in nature, and that as timespan falls below 3-4 years, those goals become more tactical, below 1-2 years, exclusively tactical.
While we have a general orientation toward marking our lives in annual timeframes, goals and objectives require a more specific orientation in the timespan of each role.
hmmm, maybe. 2 thoughts:
1. Annual — as you say Tom, the RO scaffold tells us the horizon each person’s eyes should be on. I could imagine, though, given the natural rhythm of a year that orgs and people tend toward, as you note, that some people could have multiple objectives to accomplish within the time frame (ie 52 weekly goals, 4 3-month goals etc). That management want to consider the shape at a year level may be an ungainly artifact, but not defeating of the RO approach.
2. The problem to me is “MBO’s” themselves…its really goal setting against larger objectives…as you have noted the only measure of performance is…performance. Achieving objectives, not the goals (which tend toward characteristics of interims steps, ie “35% improvement in…: or of inputs (45 sales calls per month), or of interim objectives. MBOs imply a level of planning comprehensiveness and comprehension that isn’t reasonable or real. But it might make sure that there is “activity”–the nightmare of any executive. Everyone is busy, and nothing gets done.