Although working by objectives is the best way for managing staff, organizations’ management requires an organizational level which is only provided by projects.
Management by objectives has set us free from a working culture in which it was more important to be present at our workstation rather than doing a valuable and quality job. But, nowadays, we can say that it is about going to a better place.
OK: I admit that saying that management by objectives is a cadaver could be an exaggeration, but also is saying that we all have been set free of perfect attendance
In fact, just as we all have friends in whose jobs it is more important to be than to work, objectives are a key element to motivate employees and escape from the routine. Let’s not dismiss them yet.
Nevertheless, let’s analyze why they are no longer enough for those who run an organization.
Discover how to manage your organization by projects with ITM’s White Paper
Management by objectives, for what?
Let’s put the example of Alice Smith, the web designer of an e-commerce company
When Alice improves a 25% the views of the star product section on the web, she is meeting one of the goals defined along with her boss. This means beneficial and foreseeable consequences.
When meeting objectives, Alice gets her coordinator and firm's recognition: she has accomplished a beneficial objective for star product sales and thus, benefited the whole business. She has become a recognized professional who has been rewarded for her job.
Consequently, Alice has the well-done job satisfaction and the incentive to keep working by objectives meaning that, when managing her time in the future, she will take decisions oriented to maximize results that will maintain or improve her status and will keep on contributing to general good results.
For their part, the Company’s managers are satisfied as they can delegate hard work and focus on managing which are the goals the company must achieve.
Why management by objectives is not enough
After some years, it is easy to see that management by objectives, despite its advantages of motivation and personal time management, it does not always help taking the right decisions at the right moment. Sometimes, it is not even enough to deliver the expected work.
When each worker works by their own objectives, which is the risk of no one taking care of the efforts coordination between the different initiatives that are being carried out?
On the following year, Alice did not manage to get her objectives because the TI department was too busy creating a new purchasing management system to support her on the web changes.
What is missing? Employees’ efforts must be coordinated between each other so that no one see himself blocked due to the need of cooperating with colleague who is too busy with another issue.
How can that coordinated cooperation be achieved? Managing internal work by projects, especially the most fragile one.
What is project-based management?
At project-based management, each project is connected to the objectives and business benefits willing to be achieved. Employees work on a coordinated way to obtain the project’s output: cooperation is programmed.
At the same time, the project’s output is an objective of the company or a necessary factor to achieve it. Without that project, the same factor wouldn’t be carried out and would block the work.
When there is a complex objective and it needs many different factors to happen, many projects grouped on the same program can be created. Program’s director will have to coordinate the projects to support each other, favouring synergies and avoiding a project pending work to block another project.
Let’s give an example
Let’s imagine that the company Alice is working for wants to create a new line of domestic products thought for single women between ages 35 and 50.
The goal is to put on the market 10 products of this new range and obtaining 1 million revenues in two years
The new range requires the work of all departments: product design, web, TI, marketing and commercial. Furthermore, all managers are very interested because their final year bonus are linked to initiatives. Particularly, the finance, sales and operational directors know it is about something important.
Instead of assigning objectives by department and by every employee, different projects grouped on the same program are created. The operational director is placed on the top of these projects as they have experience on projects management.
Many of these projects have transverse teams: people from marketing and systems and product design departments are working together. On the other hand, there is a single sales, web and systems project in order to have everything ready to start selling as soon as the products are ready.
With this kind of structure, program director:
- Counts on the information about the ongoing process of the project
- Can cancel projects that are not essential for the development of the new line
- Allocates more human and financial resources to urgent or central projects
- Is able to report the advancements on the project to the company’s senior management, anticipating possible problems and foreseeing results.
Why project-based management and management by objectives are compatible
No company in which a management by objectives style has been adopted has to leave the management structure to start running projects.
Management by objectives and project-based management are compatible and interdependent.
Let’s have a look to what ITM Platform’s white paper recommends
“The combination is straightforward: it is enough to link both project and tam to the objectives. This mechanism informs team members about the importance of the project, which is not only in the delivery, but in the external goal.
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