Mbo Framework

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Abstract: I have worked across various industries and multiple organizations during my career and have yet to witness an effective approach to marry strategic imperatives to daily operations. How do great organizations achieve success? Is it effective applications of frameworks like Management by Objectives or Hoshin Kanri? Management by Objectives (MBO) was and still is a popular framework for setting a direction and charting a path towards attainment. In my experience rarely does the success have much to do with the process by which we establish objectives. I have seen MBO strike such competition within an organization that undermines effective collaboration to reach optimal success. Hoshin Kanri taught under the guise of Lean by contrast appears to take the advantages of MBO and incorporate them with the philosophies and principles of Lean to provide a tangible vehicle for the marriage between strategy and work.

Is Management by Objectives still a relevant business strategy or has it been misapplied enough over time to render it obsolete? It is certain that objectives are required to keep momentum towards the attainment of an organization’s vision; however are the philosophies designed by MBO going to yield desired results. Dr. Deming observed the malpractice of MBO and voiced concern that it was a deadly disease as practiced. (Craddock) Hoshin Kanri by comparison takes Management by Objective to a new level, by not only developing direction or strategy, but aligning daily activities to said direction. Hoshin Kanri is a vehicle for true management of daily work, assessing progress towards objectives and providing feedback mechanisms for continuous improvement. Organizational objectives are mainly crafted at the C-suite or senior leadership level within the organization. The objectives can often be vague and loosely tie into the mission or vision statement, creating confusion amongst associates. This however, assumes that the objectives are...
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