Although with problems in the application, the doctrine of the Management by Objectives seems to continue alive and lush fifty years later, overcoming the frequent criticisms that are directed at it. All of us, and especially in the emerging economy of knowledge and innovation, have to achieve results in our professional performance, and this is what the system points to; a system criticized for deficiencies in the application and lack of adaptation to the reality of each company, aspects in which we must surely improve. But DpO is also criticized to justify the introduction of new proposals, sometimes difficult to understand.
All positive developments are to be welcomed, but some management systems of people are certainly striking that, without abandoning the persistent label of leadership, adhere as a talisman to the formula "Management by…", perhaps wanting to inherit the benefits that, for consultants and business schools, it assumed Management by Objectives. It is good, of course, and for example, that we share suitable values and practice good habits, but I believe that we go to the office every day (in general, to the workplace) to work, to generate business results: without rejecting the positive from others postulates, this columnist considers the DpO valid and asks, indeed, how best to apply it.
There have certainly been attempts to overcome difficulties; But in some cases, rather than aiming at a clarification of the new realities in the company or providing clues for a suitable formulation of objectives, the initiatives have been presented as new alternative or complementary systems: Management by Values (DpV), Management by Habits (DpH)… To me, at the end of the 90s and after reading Blanchard's book, it seemed to me, for example, that DpV came to facilitate decision-making, but in no way to question DpO; However, I have not been able to interpret the DpH, which does seem to openly criticize the DpO, with various arguments, some of which have seemed fallacious to me.
Perhaps you can interpret the DpH: “The challenges of the DpH (Management by Habits) are twofold: define what are the habits that are convenient for people, and show the paths to achieve them. In this strict sense, the work consists of the person conquering the truth of himself in his actions, and, in parallel, the full good for himself, with his behavior: living the truth about the good done in each act, and the realization of the good subordinated to the truth about their own being ”. It is a paragraph by MA Alcalá, collected, along with other pearls, in the book “Direction by Habits”, edited by Élogos Knowledge.
Indeed, it seemed to me to find more than one delusion in the book and, above all, highly debatable arguments in the criticism of DpO: “Management by objectives reduces the worker to a living tool, with differential bonus schemes to induce him to employ until the last ounce of energy ”. (Holding this idea, the authors of the book, Sandra Díaz and Marián García, consultants for Élogos, immediately add: “We cannot but reject a form of government that does not see the human being as integral”). It is, as I have pointed out other times, a phrase translated from English (… the reduction of the workman to a living tool, with differential bonus schemes to induce him to expend his last ounce of energy…), written at the beginning of the 20th century by Edward Cadbury, and that he could not at all refer to DpO,system that would appear several decades later: it referred to Taylorism. (I tried to obtain some clarification of this argument before publishing any article, but did not receive it; therefore I do not know if it is a lack of expertise in this matter, or an attempt to confuse the reader).
On the one hand, we should then improve the application of the system, and on the other, carefully observe the improved solutions that are offered to us. Each organization is responsible for adopting the management system it deems most convenient, but I adhere to those who bet on the possibilities of DpO. There will be companies in which the figure of the new knowledge worker, empowerment, professionalism, innovative initiative, the development of people's potential…, and there will be others in which workers are seen not so much as professionals who constitute a valuable active, but, above all, as mere followers, subordinates, collaborators, employees, human resources…
The DpO serves the professionalism of all, managers and workers, and could even therefore be viewed with reservations by some managers (there still must be) in favor of surrounding themselves with submissive subordinates; Nor should we rule out spurious wishes to use leader-follower models to artificially nurture hierarchical distances, wherever there is a risk that they will be reduced. Remembering of course that there are excellent companies, perhaps what underlies is the definition of hierarchical relationships in the emerging knowledge economy, in which knowledge is essential for decision-making.
Traditionally, organizations have been structured with power as the axis, but today the reference whose importance is growing is knowledge, and this largely resides in expert workers, who continually learn and are therefore in a position to innovate. It will seem a daring of this columnist, but I think that new profiles are needed in the managers and workers of the 21st century, perhaps outside the concept of leader-follower; and perhaps a more visible, that is, more authentic, empowerment is also required. Obviously all this is subordinate to the reality of each organization…; but let's go back to the DpO, if the reader still wants to join me.
20th century experiences
I began to hear about Management by Objectives more than 20 years ago and I soon realized the difficulty of formulation. I came to think then that, if in the end you had to do what the boss said and since he continued to evaluate performance with his criteria, what was the DpO for? In the early years I also seemed to notice that the achievement of some objectives put others at risk, and that individuality prevailed over the community.
At first I was, yes, I confess, a skeptic; and with the advantage of the passage of time, I think I was justifiably so: the DpO was being adulterated, I believe, in its application. In the company where I worked in the 80s, we talked about SGP (Professional Management System) to refer to DpO, and I certainly believe that the system introduced - or was intended to do so - professionalism in hierarchical relationships. Instead of obeying the boss every day in the what and even in the how, without always understanding why things were done, in the 90s we already related better what we were doing with the individual and collective results pursued. In reality, the system coexisted with the frequent follow-up of the boss's instructions; but we had already taken a significant step.
I wish to insist on formulating objectives from my own personal experience. From the beginning and being a training consultant, I thought about quantitative and qualitative results: how to contribute to economic prosperity, collective coordination, customer satisfaction, company image, work environment… I don't know It was only about me, a worker by objectives in a training consulting company, to give more or fewer courses or charge more or less hours to projects, but to do so while taking care of all those parallel results to be achieved. Curiously, my bosses did not always like this, they seemed to reserve for themselves many of the objectives that I considered additional: to contribute to collective synergy, to innovation, to corporate image, to the work environment…
Parallel to my work as a consultant, I was in charge of the writing for five years (I was then the pen of the company) of a bimonthly corporate newsletter of 8 printed pages, and I remember it with satisfaction because there were clients who called me to ask for back numbers (They collected them!). Well, what I'm going to do: in the annual evaluation of results my boss, regarding the newsletter, told me: "that doesn't count." Furthermore, my boss's boss told me: "the newsletter is useless." I wondered why they didn't tell me directly to stop doing it (maybe because the CEO did want it done, and hardly anyone else wrote…). Because of this and various other irregularities that I will not elaborate on, I distrusted specific people, but I did not trust the system. The system always seemed valuable to me even if misused,And, as I am fond of writing, I have been dedicating articles to him in printed and electronic magazines, also remembering the singular figure of Peter Drucker.
Why have I synthesized my experience? Because there are quantitative and qualitative contributions to results; and because there are also short and long term objectives; and because a good display of objectives is necessary to know what they expect from you; and because the system should not be held responsible for the possible lack of integrity of those who deploy or use it.
Lessons for the 21st century
I recently found on degerencia.com an interesting article by Cuban professor Alexis Codina that began with a quote from Bill Reddin: “The DPO is not something old and out of fashion, as some may think. It maintains its entire validity. But, you have to know how to apply it and adapt it to new contexts… ”. Shortly after, the professor reminded us that DpO is criticized for the three reasons I referred to at the beginning. Leaving aside what has already been said about new models, I want to continue the reflection on the assumption of current realities and on the formulation of objectives. In relation to the characteristics of the emerging economy, I would highlight:
Information and communication technologies (ICT) are omnipresent, and they support the so-called Information and Knowledge Society.
Information goes from having been, in the past, a control instrument, to constituting an essential and daily raw material in the company.
We have to move from the so-called computer skills to individual and collective informational excellence (translation of information into knowledge).
Companies are organized in tune with the flow of knowledge, and they do so with the intention of making the right decisions and solutions.
The value of the company is based, more than on tangibles, on intangibles such as know-how or the relationships it cultivates in the market.
The company must contribute to social welfare, under the win-win principle.
The size, fundamental in the economy of scale, sometimes becomes a serious obstacle: now, the faster fish eats the slower.
Intuitive knowledge also counts, if it is genuine and is reconciled with the tacit and explicit.
The relationship with customers is characterized by interactivity and even complexity.
Managers, rather than governing and supervising the performance of workers, must be supportive of it.
The traditional hierarchical authority seems to give way, progressively, to the hierarchy of knowledge.
The “us-them” distance is reduced to rebuild the status quo, and true empowerment is consolidated.
The short term is addressed without losing sight of the long term, nor the uncertainties of the market.
Improvement and innovation are a permanent requirement, and must be present in daily activity and organizational culture.
People go from being a liability to making up the fundamental asset: the knowledge worker is key.
When the organization works by projects, a kind of internal job market is generated that promotes individual competitiveness.
Training in the company, in addition to being oriented to new tasks and procedures, or being used as a commodity, must be dedicated to nurturing human assets in an effective way.
Lifelong learning includes independent or self-directed initiatives of individuals, apart from the formal orchestration of courses.
The company is a living system: every day the systemic perspective and the need to adapt to the environment are more important.
In short, all this and more things shape new profiles in workers and managers, and a new relationship between them; a relationship more attentive to the use of knowledge than to the ego of managers: intelligent organizations know this well and act accordingly. Everything seems to point to managers being more foreign ministers than interior ministers, and that expert workers assume a greater dose of autonomy and responsibility. Managers must present their characteristic competency profile (knowledge, skills, abilities, strengths, faculties, attitudes, values, behavior habits…), and workers theirs. Again I have to admit that all this is subordinated to the most specific reality of each case,But the DpO cannot be oblivious to the demands and realities of the companies of knowledge and innovation; DpO assumes that we all have to know what is expected of us.
What about the controversial formulation of objectives? The DpO does not limit us to the quantitative as some creators of other models want us to think: sell so much, manufacture so many units, invoice so many hours, get so many new customers… The formulation admits objectives whose achievement can be evaluated, despite their nature qualitative: satisfying customers, innovating, fostering collective synergy, learning continuously, contributing to the quality of life in the company, cultivating corporate values, giving flow to the knowledge acquired, ensuring the long term… I remember a time when I they assigned, like all my colleagues, the global objectives of the company;thus it could never happen that the workers reached their objectives if certain managers did not do it… But the fact is that the workers had no influence on the decisions that were made.
I also wanted to remind you that it is a system: the Management by Objectives system. The entire organization must be consistent with the DpO and this with the reality of the company. But I am not going to bring you messages that are already known: I would refer you to the works of the parents of the DpO and the most recent of experts like Bill Reddin and Denis Ryan. Don't let any consultant tell you that "management by objectives reduces the worker to a living tool, with differential bonus schemes to induce him to use every last ounce of energy."
