A not so long time ago the company I work for initiated Management by Objectives (MBO). MBO is divided into 3 groups of objectives: company objectives, department objectives and individual objectives. MBO is also linked to a bonus. I’ll get a 100% bonus if the company reaches its goals, my team reaches their goals and I reach my goals. On each of these (company, department, individual) there is a weighting.

Let’s say I sit down with my boss in December to agree on my personal goals for Q1 (January-March). Before going into this meeting I’ve thought of some objectives. My boss also has some suggestions. Together we come up with 4 objectives, divided over the 3 months. One of the goals has to be achieved within 3 weeks from now, but the others are closer to the end of the quarter. As time passes I reach my first goal after 3 weeks, and I’m starting to focus on the other 3. But as it turns out, the objectives we clearly visualized one month ago are no longer valid, because of some unforeseen changes that have occurred. Since we’re doing agile development this change was handled nicely, but for the MBO’s this is not the case. So I now have two choices; do what I have to do to reach my objectives anyway or don’t do them and loose my bonus.

Let’s backtrack a bit. Why do companies use MBO? It’s to steer company objectives by motivation. In this case the primary motivation is money and maybe the satisfaction of reaching your objectives. So what happens when the objectives change? Well, it’s no longer in the company best interest for you to complete your objectives, so we need to change the MBO as well, right? But this sounds like a lot of MBO management, and we don’t want that.

For now I’ve mostly talked about individual objectives. Relating this to agile development you might want to ask another question: do we need individual objectives at all? What if we removed the individual objectives and only used the company and department objectives. This way we can work together to achieve the department objectives instead of focusing on your own objectives. This is also a much better philosophy related to agile development, where you always work as a team and not as an individual. But this will not solve all the problems. You’re still stuck with the same issues when things start to change. However, it’s easier to change the team objectives than change all individual objectives, so MBO management will be easier. I’m also much more fond of a team working together to achieve a common goal, than each individual working towards their own personal goals. It’s just better for the team.