Understand the concept of management by objectives and learn how it can be fundamental to your business – WAU
The basis of management by objectives is a clear understanding of a company’s objectives. The objective is the integration between the manager and his team, which eliminates hierarchical barriers. Through it, management and employees develop their own functions towards the desired results.
The success of a company is directly linked to her goals and how each one is designed and then put into practice.
Management by objectives came precisely to highlight the importance of investing in good strategic planning, without forgetting it when the processes start to work – or even wrong.
Its concept was introduced and gained popularity by Austrian writer, professor and administrative consultant Peter Drucker. In 1954 he released a book called The Practice of Administration, which serves as the basis for the entire study to be explored in this post.
So that you can learn more about management by objectives and understand its advantages, we will address the main concepts of the strategy and show the best ways to adapt it to the scenario of a company. This will be done from the following topics:
What is management by objectives?
According to the name, the management by objectives, or APO, is a process that is based on a clear understanding of the objectives of a company. As a consequence of this, management and employees are guided and will be able to develop their own functions in the direction of the desired results.
By correctly understanding “why” and “how” goals can be accomplished, the search for achieving them becomes something much more doable.
Such transparency should be the team’s priority, which ideally should be the least hierarchical possible: managers and subordinates must outline action plans that talk to each other in the same way.
In addition, it is important that the sectors have an overview of other areas: marketing, legal, commercial, financial and all other teams only gain when they understand the objectives that go beyond their functions.
In both smaller companies and even those at a global level, it is very common to find unmotivated employees or who do not understand the value of the goals assigned to them.
In addition, there are also cases of managers who set goals without understanding the routine of employees and the main bottlenecks of daily life. Thus, they do not know what numbers would be reasonable for everyone can fulfill their respective roles.
To prepare the action plans, an objective is defined and within it a series of goals are enumerated in order to make the result feasible in specific periods of time, all in a participatory manner.
What are the characteristics of APO?
After understanding the context of management by objectives, we will proceed with the concept and show the main characteristics that involve it.
By understanding them and finding practical ways to apply APO in your business, you’ll be one step ahead of achieve results that make sense and are achievable within the reality of your team.
Defining responsibilities of managers and subordinates
Before determining exactly what the team’s responsibilities will be, it is important to define the general objective and understand what is up to managers and what should be done by the rest of the employees.
Even in a collaborative work system, there are numerous functions that are not performed by the entire team – which can occur for strategic or confidential reasons, as well as for the level of responsibility of the position.
Objectives for each department or position
Once you understand the main division of objectives, it is time to meet with the entire team and carry out the division of tasks transparently. Since goals are only achieved in the best possible way when they are aligned with those responsible, remember to state exactly the purpose and how employees can contribute to the results.
Measurement and control of results
A highlight of APO is the measurement of results. After setting the goal and starting the “hands-on” process, one of the main ways to achieve what was proposed is the periodic control of everything that is happening.
Was the goal designed for a period of one year? Set fortnightly meetings or every few months, always taking into account the importance and complexity of what is at stake.
Many people ignore the power of goal control, but they are important for maintenance to save results that could not be achieved.
Time is unpredictable and there are a number of uncontrollable factors that can change from one period to the next, so that the ideal is to revisit the proposal. Otherwise, many goals would never be achieved.
Evaluation and recycling
After reaching – or not – the proposed results, it is necessary to understand in depth what were the main bottlenecks, victories, failures in the process and merits so that the situation has reached the level it has reached.
It’s time to review all the plans and differentiate those that don’t work from those that can be recycled for the next year. The APO cycle is continuous and, even if the objectives remain the same, one must return to the first step.
How can APO help the company?
Now that you understand the main points of management by objectives, you are ready to understand its main benefits. Transparent and collaborative management it only has to add in the reality of the most diverse companies, regardless of size or business model.
Structuring a good career plan for the team
When setting individual and team goals and measuring each one, managers have rich material at their disposal regarding the main competencies of all employees.
Data that involve personal and collective evolution are essential to draw career plans – together with other important points such as adherence to culture, personality and behavioral aspects.
It’s important to keep in mind that analysis is important not only when it comes to hitting the goal, but also by assembling the best and most dedicated team.
The career plan is also essential for employees to understand their place and their performance in the company, how they can improve and whether they are actually living in the situation they would like. In addition to frustrated people delivering less and with inferior quality, being aware of their own evolution is one of the main ways to align personal expectations with those of the corporation.
Chance to devise improvement strategies with enough time
As we already said in the post, the maintenance and periodic review of the objectives is essential to outline new action plans when the current ones are not going well.
Forgetting goals and remembering to measure them only in the final moments is a great formula for failure. Besides, who doesn’t like to hit double goals?
Much more than improvement and recovery strategies, the updated management model makes it possible to leave those goals that have already been achieved even better. All of this, obviously, should serve as an apprenticeship for the following years. You will have a gigantic information bank ready to be thoroughly analyzed.
Creating transparent processes and relationships
Transparency must be considered the basis of interpersonal work relationships. Oppressive, distant and inflexible leadership was never wanted, and today the scenario is even worse for management.
With the autonomy that took over a person’s career, teams have gained a self-esteem perhaps never seen before in the job market. This means that cold management, which does not strive to create a sense of belonging and omits information is less and less tolerated.
The greater the feeling of collaboration and the real participation of the employee, make sure that each one of them will be willing to do their best to achieve the company’s results.
Being part of something is much more than hitting the 9 to 18 point – it involves feeling that all that work does make a difference in a broader setting.
How to use APO and apply it?
To be guided by management by objectives, you need to understand what are the best ways to trace each of them. The listing may seem complex and requires a lot of planning, but when the processes are properly aligned, it becomes a relatively simple consequence.
Here are the main ways to use APO in practice:
- search for objectives that will have a direct impact on the company’s results;
- base each of them on concrete and measurable data, as the SMART methodology points out;
- centralize the objectives in the activities and not in the people who will develop them;
- break the goals down into a series of detailed goals;
- prioritize clear language for all teams, from the base of the company to top management positions;
- do not limit the ways to achieve the objectives, it is important that the team has sufficient freedom to find the strategies that will be used;
- set a deadline;
- understand how maintenance will be done and establish time periods for analysis.
In addition, one of the fundamental points that involve strategy is to truly understand the importance of objectives.
In the midst of a computerized reality that changes every second, in which many actions are cut because they seem unnecessary or exaggerated, we must not underestimate the value of designing good planning that precedes goals. Only then will it be possible to reach them in an agile and efficient way!
And speaking of goals, the end of the year is the perfect time to take stock of the last 12 months and list expectations for the following. Many people find it difficult to set goals – which makes that “I can’t do anything” speech much more real.
If you liked learning about management by objectives, learn to set achievable goals and reach the end of 2020 with better results than you imagined!