Building a sustainable growth company by MBO means
How to build a sustainable growth company
First Your business needs:
(a) A Strong Sense of Purpose: “Making money” is not a sense of purpose. Find purpose first and it will lead to wealth accumulation.
(b) Outstanding Market Intelligence: The organization must recognize and then adapt to fundamental change in your company, industry, community and within your self — and then to proactively do something about it.
( c) Effective Growth Planning Systems: It has to be written, well communicated and regularly updated. Plans don’t cause growth. But they are highly correlated with growth. If we analyze companies that grow 20 percent annually for five years, chances are they have an effective, written growth planning system.
( d ) Customer-driven Processes: An example: A hotel that sells food in a kitchen and beverages in a bar… forcing customers to place two separate room orders for a sandwich and a milk shake…
( e) Power of Technology: But don’t let systems make us lazy
.
( f) Find, train and retain the best and brightest people possible: This is the most important predictor of a sustainable growth company. Employee retention equals customer retention that drives growth.
( g) Seeing the Future: Business growth leaders get really good at seeing the future. “But some organizations appear to predict the future because they’re on the leading edge of their industry.” For instance, companies study population shifts to understand where customers will live, how they’ll live and what they’ll need.
Using a MBO PLAN
(a) Defining our Business : The first step in developing an effective MBO program for is to define our business. A clear vision of our business is crucial for planning our marketing, product development, buildings and equipment, and financial and staff needs the Operation head will ask himself the following questions:
What business am I in?
Is my definition right for today's market?
Do I need to change my business to meet emerging customer needs?
(b) Setting Goals. The Operation head will insist all plant heads and manager in functional role define one or two goals in each of the following categories, he may open their eyes to new possibilities they had not seen before. The goal-setting process can be a very useful educational step.
(i) Regular work goals. These include the major part of the manager's responsibilities. For example, the head of production should focus on the quantity, quality and efficiency of production and the head of marketing should concentrate on developing and conducting the market research and sales programs. In defining their regular work goals, employees should include ways of :
Operating more efficiently.
Improving the quality of the product or service.
Expanding the total amount produced or marketed.
(ii) Problem-solving goals. These provide managers an opportunity to define their major problems and to set a goal to solve each one. There is no danger of ever running out of problems; new problems or new versions of old problems are always present.
(iii) Innovative goals. Managers and workers should seek new and better production methods, explore better ways to serve customers and propose new products for the company. Managers will need to use innovative approaches to make the company competitive in a fast-changing national and international economic environment.
(iv) Development goals. Managers should plan for the continued growth of each employee, both in technical areas and in work relations with fellow employees.
(c) Devising a Work Plan The Operation head / Plant head or managers will use a miniature work plan to develop goals that are complete and useful In developing the plan, the following five areas should be addressed:
Goal -- Be specific and concise.
Measurement -- What benchmarks will we use to measure whether we have achieved our goals? These usually can be expressed in quantitative terms.
Major problems anticipated.
Work steps -- List three or four of the most essential steps. Give completion dates for each.
Supervisor's goals -- Employees should identify which of their manager's goals relate to their own goals.
On the work plan, managers can show each of the major work steps (subgoals) necessary to reach a goal. If the work steps are completed by the indicated date, the goal is reached.
(d) There has to be a regular review of progress. A monthly or quarterly review of progress toward goals will help us determine where progress is below expectations. For example, suppose that one of our goals is to reduce overtime work
by 50 percent in one year, but we only reduce it by 15 percent in the first quarter. Based on this information, we can exert a special effort in the succeeding quarters to regain the lost ground. When progress is below expectations, we should identify the problems holding back progress and assign someone to resolve them. Failure to reach goals can result from
The wrong objectives being established at the outset.
Organizational restrictions being overlooked.
Personal failure or a combination of factors.
In order to solve problems and meet a goal, managers may have to adjust their time line or change the goal itself. All changes should be written as new goals and included in the MBO files.
(e) Under the MBO program, we evaluate your managers' performance based on whether they have achieved their five to eight goals. We also must determine how well they have performed the secondary duties that do not fall under goals.
First Your business needs:
(a) A Strong Sense of Purpose: “Making money” is not a sense of purpose. Find purpose first and it will lead to wealth accumulation.
(b) Outstanding Market Intelligence: The organization must recognize and then adapt to fundamental change in your company, industry, community and within your self — and then to proactively do something about it.
( c) Effective Growth Planning Systems: It has to be written, well communicated and regularly updated. Plans don’t cause growth. But they are highly correlated with growth. If we analyze companies that grow 20 percent annually for five years, chances are they have an effective, written growth planning system.
( d ) Customer-driven Processes: An example: A hotel that sells food in a kitchen and beverages in a bar… forcing customers to place two separate room orders for a sandwich and a milk shake…
( e) Power of Technology: But don’t let systems make us lazy
.
( f) Find, train and retain the best and brightest people possible: This is the most important predictor of a sustainable growth company. Employee retention equals customer retention that drives growth.
( g) Seeing the Future: Business growth leaders get really good at seeing the future. “But some organizations appear to predict the future because they’re on the leading edge of their industry.” For instance, companies study population shifts to understand where customers will live, how they’ll live and what they’ll need.
Using a MBO PLAN
(a) Defining our Business : The first step in developing an effective MBO program for is to define our business. A clear vision of our business is crucial for planning our marketing, product development, buildings and equipment, and financial and staff needs the Operation head will ask himself the following questions:
What business am I in?
Is my definition right for today's market?
Do I need to change my business to meet emerging customer needs?
(b) Setting Goals. The Operation head will insist all plant heads and manager in functional role define one or two goals in each of the following categories, he may open their eyes to new possibilities they had not seen before. The goal-setting process can be a very useful educational step.
(i) Regular work goals. These include the major part of the manager's responsibilities. For example, the head of production should focus on the quantity, quality and efficiency of production and the head of marketing should concentrate on developing and conducting the market research and sales programs. In defining their regular work goals, employees should include ways of :
Operating more efficiently.
Improving the quality of the product or service.
Expanding the total amount produced or marketed.
(ii) Problem-solving goals. These provide managers an opportunity to define their major problems and to set a goal to solve each one. There is no danger of ever running out of problems; new problems or new versions of old problems are always present.
(iii) Innovative goals. Managers and workers should seek new and better production methods, explore better ways to serve customers and propose new products for the company. Managers will need to use innovative approaches to make the company competitive in a fast-changing national and international economic environment.
(iv) Development goals. Managers should plan for the continued growth of each employee, both in technical areas and in work relations with fellow employees.
(c) Devising a Work Plan The Operation head / Plant head or managers will use a miniature work plan to develop goals that are complete and useful In developing the plan, the following five areas should be addressed:
Goal -- Be specific and concise.
Measurement -- What benchmarks will we use to measure whether we have achieved our goals? These usually can be expressed in quantitative terms.
Major problems anticipated.
Work steps -- List three or four of the most essential steps. Give completion dates for each.
Supervisor's goals -- Employees should identify which of their manager's goals relate to their own goals.
On the work plan, managers can show each of the major work steps (subgoals) necessary to reach a goal. If the work steps are completed by the indicated date, the goal is reached.
(d) There has to be a regular review of progress. A monthly or quarterly review of progress toward goals will help us determine where progress is below expectations. For example, suppose that one of our goals is to reduce overtime work
by 50 percent in one year, but we only reduce it by 15 percent in the first quarter. Based on this information, we can exert a special effort in the succeeding quarters to regain the lost ground. When progress is below expectations, we should identify the problems holding back progress and assign someone to resolve them. Failure to reach goals can result from
The wrong objectives being established at the outset.
Organizational restrictions being overlooked.
Personal failure or a combination of factors.
In order to solve problems and meet a goal, managers may have to adjust their time line or change the goal itself. All changes should be written as new goals and included in the MBO files.
(e) Under the MBO program, we evaluate your managers' performance based on whether they have achieved their five to eight goals. We also must determine how well they have performed the secondary duties that do not fall under goals.
