Management by objectives

Management by objectives method was first outlined by Peter Drucker, one of the prominent theorists of management, and has successfully passed the test of time in national and western companies. The main advantage of MBO is that the method allows to consolidate the effort of all the employees of the company to attain strategic goals. Almost every company has more or less clear business strategy and goal setting instruments. But the clarity of these goals employees' motivation to achieve them can vary greatly. Moreover, very few companies have KPIs (Key Performance Indicators) that allow to evaluate progress toward the goal and performance of each department or employee at a given period of time.

How we implement Management by objectives:

  1. We identify the strategic goals of the company together with the company founders.
  2. We write down objectives for each level of the organization and individuals are given specific aims and targets.
  3. We develop a system of KPIs that are clearly linked to the strategic goals.
  4. We identify key results for the coming period (taking into account industry standards).
  5. We lay the foundation for correlating the pay and promotion system with MBO.
  6. We prepare documents that regulate the process of MBO and all the necessary reporting forms.
  7. We closely monitor the process, as the new system is being put into place and adapt it accordingly, so that it is implemented effectively (within 1 year after completion of the project).

In order to implement the system effectively it is necessary to:

  1. Train top managers in MBO (in the form of lecture before implementation);
  2. Have strategic sessions with top managers and key employee groups to discuss strategic goals of the company (in the form of a conference prior to the development of KPIs);
  3. Train management in ongoing tracking and feedback in the process to reach objectives (in the form of workshop after the first reporting period under the new system).