Management by Objectives and IT projects

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What is Management by Objectives?

Back in the 50s, Peter Drucker coined and popularized the term 'Management By Objectives' (MBO). It's a process by which managers establish objectives and measurements for their staff to give them a structure for what they are trying to achieve.

To this day, it's used by many managers, having stood the test of time as an appropriate way to manage people's activity (separate to managing people as people). It works and keeps people focussed on what they're doing and gives them the ability to measure what they're doing as they're doing it. They can immediately take corrective action to get back on track. This usually means doing more of some activity, less of some activity or some entirely different activity.

This is the clear advantage of MBO: people can engage in activities and receive immediate feedback on whether it is working or not to achieve the required objectives. People's performance can be measured at any frequency that makes sense, such as daily, weekly or monthly.

It obviously depends on a quality manager who takes the time to measure people's performance and provide them constructive feedback. As the saying goes: 'if you can’t measure it, you can't manage it'. Without the objectives, people do not know if they're doing the right thing.

Management by Objectives and IT projects

So what does MBO and IT projects have to do with each other?

Recently, I was fortunate enough to participate in a round table discussion with a group of CIOs whose focus is to identify novel approaches to improve the success of IT projects. The premise of the group is that despite capable people, strong project management methodologies and good technologies, IT still does not have a good track record in delivering projects that work, on time and on budget.

One of the key themes of the discussion was the importance of establishing objectives for the IT project in business terms. The IT project's objectives can include productivity and efficiency, reduced wastage or faster time to respond to changing market conditions.

The premise is that by establishing business objectives for your IT project, it will be more successful because the project can be measured against the objectives. It seems sensible enough, but does it work?

Traditional IT development methods do not support MBO

In order for MBO to be successful, you need measurements within the SMART criteria. That is:

Specific
Measurable
Agreed
Realistic, and
Time-Specific

So let's say we establish the following goals for our IT project:

Improve productivity by 50%
Reduce learning time by 90%
Reduce wastage by 90%
Stop double handling

If you want to apply MBO to your IT project (or in fact any measurement / management technique) you need to identify what you can actually measure.

During your IT project, here are the things you can easily measure:

Spend to budget
Time taken to deliver various work packages
Bugs/code quality

What about the business objectives? What can we measure during the IT project that will determine of the project is going to meet the business objectives set out earlier?

If your project is about infrastructure (such as new server, faster network connections), then the business objectives can be readily measured because you're generally replacing slower infrastructure with faster infrastructure. All things being equal, this should result in faster system performance meaning people don't have to wait for the system to 'catch up' while they’re doing their job.

But what if your project is a business productivity application? How can you measure the productivity, efficiency and reduced wastage during application design and development? You cannot.

There is nothing we can measure related to business objectives during the traditional design and development process. Why is that? The only way to measure the business objectives is by having people use the new application to see if it works as intended. Unfortunately you need to wait until it's nearly finished — that is, when you put the user interface on it and people can begin to use it.

Unfortunately, traditional development practices only get to the user interface at the half-way mark, or later, in the software development lifecycle. Therefore, you must spend at least half of your budget before you can tell if you're going to meet your business objectives.

I think you can see the advantage of being able to measure, early on, whether your $100 million IT project will deliver on its business objectives well before the half way mark.

Successfully managing your IT projects with MBO

In order to use MBO in your IT project, you must rethink how you approach development. If you want to measure how well your project meets business objectives, then you must design and develop your IT project in a way that creates the right deliverables at the right time. Without the right deliverables, you cannot measure its performance.

In order to measure how well your IT project is meeting business objectives, as you go, you need something to measure. Generally, you need to measure people's performance using the application to see if the transaction time has been reduced and the training time reduced.

You therefore need to design and prototype the user interface first, before you do anything else. Why? The user interface is the only thing people will ever see of your new application. With it, you can precisely determine:

How long it takes people to perform a transaction
How long it takes people to learn the new user interface
Whether you have reduced wastage in people's activities
Whether double handling has stopped in people's activities

Organisational performance is clearly related to how well people are able to perform their jobs. Their performance, in the aggregate contributes to team and department performance indicators, and ultimately corporate objectives.

You need to measure the performance of people using the application as early as possible in order to ensure that you can take corrective action on the IT project to meet its business objectives.

You can have the best, fastest technology in the world, but if people cannot use it to do their jobs effectively, then it is, in fact, not the best technology in the world.