Might management by objectives (MBO) be a system for managing in the digital age?

MBO, a system of management first mentioned by Peter Drucker and later developed by John Humble (U.K.) and George Odiorne (U.S.A.) in the 1970s may be an answer to managing in the digital age. It may appeal particularly to millennials who so want to participate and be part of strategic objective setting in their larger corporation. Millennials prefer to choose where to work and modern companies would like to access the best talent regardless of where they are. 

Properly done, a mutual understanding of the subordinate’s job is developed through direct and open discussion between the manager and his/her subordinate. The process encourages collaboration, mutual understanding, adds clarity to the relationship and results in a set of key performance indicators (KPIs)which can be used by both parties to measure progress.  

The MBO system, may be the answer in a time when working remotely can complicate communication. MBO, as a useful tool for the decentralization of responsibility and authority, has the aim of obtaining the maximum participation of employees in the achievement of company objectives. 

A change of mentality is assumed such that the "boss" is no longer the controller, and the worker is consequently not the controlled one, but rather collaboration takes place. The employee is the manager of his education and no longer "the boss" who says what to do. The smart worker autonomously understands what is useful to him by trying to continuously progress. He thus has a great responsibility for his growth and subsequently towards the company. Objectives for an individual can be aligned with those of the organization. 

Key Performance Indicators or KPIs are the elements that most significantly make it possible to set out the performance of the person being assessed. From an MBO perspective, the KPIs include SMART objectives, agreed with the employer, and NUM objectives (sustainable development objectives), which are often self-defined by the smart worker himself because they are qualitative and not quantitative. 

MBO has a history of use with many noteworthy companies although the terminology and process are often modified to suit existing management practices.  

Cristina Piai

Paul White