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Management by Objectives


Form vs. Substance

as applied to:

Computer Use

The Internet





Personal Life

There is no picture at the top of this page or, indeed, on this page. So you may decide to skip reading it. It is said that the typical Internet surfer is looking for pictures, color, graphics, sound, movies, glitz, but certainly not words or ideas. I suspect that is true.

During my lifetime of training and experience as an applied scientist and technician, I have been consistently taught the concept of Management by Objectives, (MBO). This concept leads one to always approach everything in life, including life itself, by first, determining objectives, second, planning methods or processes necessary to efficiently reach those objectives, and third, implementing the plan. Usually complex plans consist of various sublevels of sub-objectives, time tables, etc. Plans and objectives are continually monitored, evaluated, and modified as they are implemented and circumstances change and additional information becomes available.

For example, in designing this internet site, one of the first things I did was to write the Preface and the Welcome Page to define the objectives of the site.

I have learned during the last few years that most people and institutions do not manage in this way. It could even be said that they do very little planning or management. This has become one of my pet peeves and this essay is written to give some examples of this lack of management and its consequences.

The important points of this essay are these:

  1. Objectives must be properly defined.
  2. Plans for achieving objectives must be detailed.
  3. There must be a mechanism for monitoring the implementation of plans and making appropriate modifications.
  4. Ongoing processes must be eliminated when objectives are achieved. (Don't keep the railroad commission when there are no longer railroads to regulate.)

A recent study says that only 1/3 of doctors have any follow-up mechanism so that they will know if tests they order are actually done. When I worked for the Kentucky Division of Forestry we had district meetings twice a year just before the spring and the fall fire seasons. At these meetings fire personnel from each of the ten counties in the district were encouraged to carry out pre fire season activities such as inspecting fire towers and forest access roads, preparing equipment, and lining up seasonal personnel. I noticed during fire season that many times seasonal personnel were not available or equipment did not work or roads were impassable. When I asked why, the usual answer was that the person responsible had not had the time or the resources to complete the jobs which should have been done before fire season. Later when I became Assistant District Forester and was given responsibility for these district meetings and plans for fire season I changed the procedure. After we had discussed jobs which needed to be done, we wrote a schedule on a calendar which gave a specific time to get each job done and identified personnel and resources to be used on each job and identified who would be responsible for getting the job done. I kept a copy of the schedule and each morning on the district wide radio system I would check with responsible people to see that yesterday's jobs had been completed and to determine if any problems were anticipated in completing today's jobs. If there were resource or timing problems or whatever it was my responsiblity to resolve them and reschedule jobs and resources as needed. Because of this system fire season preparation improved at least 1000 per cent.

I think of substance as anything which is either an objective or a necessary or desirable step toward achieving an objective and form as anything which is superfluous. If my objective is to eat an apple, a sub-objective leading toward the larger objective of maintaining life, a peeling knife may be substantive but flourishing the knife above my head before beginning to peel may be only form meant to draw attention and therefore superfluous. On the other hand, if one of my objectives is to draw attention to myself, perhaps to enhance my ego, then the flourish may be substance. The important point is that one should know what he is doing and why.

I had an uncle who considered himself a good photographer. The main problem was that he took very few pictures. He spent most of his time reading photography magazines and buying the latest, best, and most expensive photography equipment. He seemed to have very little time for or interest in actually taking pictures. I considered him, not a photographer, but a gadget freak.

I think of computers as great tools to make life better by helping people to do a number of chores more efficiently whether these chores are bookkeeping, communicating, learning, playing, or whatever. I know a lot of people though who spend a lot of time studying the latest in computer hardware and buying the best in equipment, etc. They do not actually take time to learn to use applications though but only to possess them.

I knew an owner of a business who proudly showed me all the various accounting programs, spreadsheet programs and other programs that he had amassed. He was very proud of the fact that he had these. He had the latest in computer hardware sitting on his desk. However, he kept all his books by hand in ledgers. It seems he had never had time to learn to use all this stuff.

I have met a number of people who set up their own computer system and ended up with four or five word processors, as many spreadsheet programs, and as many accounting programs. In some cases the computer system they designed sat in a corner for years gathering dust because they were too overwhelmed by all the manuals to try to learn to use all that. In other cases they actually tried to use all the software and, as a result, neglected their business.

I installed a computerized accounting system for the owner of a small building supply business a few years ago. He said he needed it to send statements to his customers monthly. After he had used the system a few months, I asked him how he liked the system and if it wasn't much faster than his manual bookkeeping. He said that actually he didn't like the system because it took too much time putting all the charge tickets into the computer. "But", I said, "that must be faster than doing the same job manually." "No.", said he, "Before the computer I just had a barrel behind the counter. When a customer would charge a sale I would pitch the ticket into the barrel. When a customer came in to pay his bill, I would just dig through the barrel and find as many of his charge tickets as I could, add them and charge him that amount. Now I have to do all this blasted bookkeeping!"

It is important to define your objective properly. For example the objective of electronic billing computer programs should not be to submit electronic bills. It should be to collect money. In setting up medical electronic billing systems to bill Blue Shield, Medicare, and Medicaid for physicians and pharmacies we found that about 15% of paper and electronic billings were not being paid. We discovered this because the medical software I developed had follow up capability so that it was able to alert the operators about unpaid amounts. I responded to this problem by building all medical billing software with the capability to automatically rebill all unpaid bills on a monthly basis after the first 90 days. Since the 15% of bills that were lost were random, we recovered almost all the amounts that would have been lost without the automatic rebill capability. As a result of this and the ability of my software to download and read in remittance advices electronically my medical software has for several years recovered about $50,000 extra per year for each of my customers over any other method of billing including other computer packages which all require the operator to tell the computer which items to rebill individually.

A financial advisor for a small rural hospital decided that Lotus 123, the spreadsheet program, was the greatest thing going, so when the hospital had no computerized accounting system he advised them to set up their entire accounting, payroll, and accounts receivable system on Lotus 123. You can make holes with a hammer too, but a drill works much better. When they hired me I set up custom software designed for their objectives and it worked fine for years.

People become enamoured with technology and processes and forget objectives. My sister-in-law works at a mid sized hospital scheduling surgery. The hospital has computerized much of its operations with varying degrees of success. Scheduling surgery is now done by means of a calendar type book designed for this purpose. Her supervisor wants to computerize scheduling of the surgery even though the schedule book is only used by the people in the one surgery office. He wants to do this because it is possible, even though a study found that accessing the scheduling software takes three times as long as scheduling manually the way it is now being done.
On the other hand, I successfully computerized scheduling of crude oil pick- ups by an oil purchasing company. In that case though, scheduling was being done by two different people in separate buildings and it was essential that they each know at all times what the other had scheduled.

I notice that many people want to have home pages on the Internet, but once they get them have nothing to put on them other than a list of their favorite links. As a result a lot of the internet becomes links to links with content difficult to find. It may be that the information super highway will mostly consist of a set of overlapping circles going nowhere.

I also notice that many internet pages are covered with color, graphics, etc. but have little useful content. Many are unusable by people with text only browsers or are so slow to load that they are worthless to those without high speed connections. I think that the objective of many webmasters is to show off all the fancy stuff they can do with HTML but they have no reason for doing it. Of course, it is true that, in some cases, the graphics are necessary for the purpose of the page or simply add to text information otherwise available or are designed in such a way that they do not interfere with page loading or navigation.

I recently received a message from a person who has a great internet site dedicated to the dissemination and discussion of ideas. He proudly pointed out that plans for the new year for the site included adding audio and video. Now this may be great and very useful for the site but, if so, he didn't say why. I suspect that the idea was to attract surfers who are more interested in glitz than in ideas or perhaps just to keep up with the latest technology. A couple of hours reading "On Walden Pond" might be in order.

The webmaster at a mid-sized university did not take time to learn HTML or simply did not take time to write it properly. As a result the main home page at the University would not load on many browsers. It would, however, work on Netscape because Netscape 1.1 overlooks much improper HTML. (I understand Netscape 2.0 does not.) I pointed out the problem to him and sent him the first few lines of his code corrected to proper HTML. He informed me that as long as the page would load on Netscape it seemed to him immaterial whether those with other browsers could see his page. This seems to be a rather common attitude on the Internet. I consider such people arrogant SOBs. Personally I want everyone who is at all interested to be able to see my pages regardless of their sex, color, browser, wealth, political party, or religious persuasion. But I see dissemination of the content of the pages, not their form, as my primary objective.

I see educational systems in rural Kentucky suffering very much from a lack of Management by Objectives. See my Paper on the subject.

Money is fungible. That means interchangeable. That's why it is valuable. Otherwise, we could barter with corn. I had a farm loan with a federal agency and was required to report to them when I sold calves. When I did so the secretary said, "What did you do with the money?" I said, "I deposited it in the farm bank account." She said, "I have to know what you bought with that specific money to fill out this report." To me the question is meaningless. I spent all money in the farm bank account on various farm expenses, but how can I say how that specific money was used.

When the "Beaver" of "Leave it to Beaver" opened a bank account, he came into the bank a few days later and wanted to see his money. When he was shown the amount of cash he had deposited, he claimed that they had stolen his money because the money he was shown wasn't in the same denominations as that he had deposited.

These are both examples of confusing form with substance. This confusion can have more serious consequences. Once the state legislators got an increase in the sales tax passed by promising that all the additional money raised by the sales tax would go to education. They anticipated that X dollars would be raised thus and go to the education budget. Later when passing the general state budget they cut education by that amount and allocated that money to roads. They reasoned that since the money would be coming from the sales tax it was no longer needed in the education budget from the general fund.

President Clinton got 40 million dollars allocated to three impoverished counties in Kentucky to be used for economic development to try to lift the area out of poverty. When the state bureaucrats met for the annual allocation of state economic development funds they reasoned that those three counties no longer needed any state money since they had gotten the federal money.

As with everything else on this internet site you are encouraged to send me by email your thoughts on this subject and, if they are substantive and well presented, I will make them available here.

People to People - How to be an active participant on this Internet site.

Comments Received


My name is Robyn Howard and I am currently studying Organisational Behaviour at University. I was researching the topic of MBO programs on the new and came across your web page. I am having a bit of trouble with an assignment question and when I see that we could contact you, I wondered as to weather you could help me understand this a little clearer. My question is as follows:
" Identify and discuss the critical features of MBO. How could MBO programs be improved to make them more attractive to most business. Discuss how these programs can be integrated with other performance improvement schemes."

Now the only trouble I am have with is the last sentence. I know MBO is linked to the theory of goal-setting, and I have included this in the assignment, however I think the question is requiring more than this. I have found from other research that there are other motivational programs like Employee Recognition Programs, Employee Involvement Programs, Variable Pay Programs etc, and have been thinking that maybe MBO is integrated with these. Would you agree? In another part of research I have found something which says "MBO developed into modern performance management schemes and performance-related pay", would you agree and do you think this is what the question is asking for? After all, if these are all tied into MBO programs, eg more pay for more work, surely workers performance will improve. Have I looked at this question in the wrong way.

You may not have a clue what I am asking and I am sorry to bother you, but I don't know who else to contact.

Sender: Robyn Howard

Reply from Duane:

In my opinion, yes, you have looked at the question in the wrong way.

Management by Objectives is not a motivational program like Employee Recognition Programs, Employee Involvement Programs, Variable Pay Programs etc. MBO is a philosophy or an approach to accomplishing something in life. The motivational programs you mention are tools which may or may not be effective in achieving an objective. MBO is probably the only logical way to approach achieving any objective.

The question you asked in itself does not make any sense to me. "How could MBO be improved to make it attractive to more businesses?" That's asking how could achieving their objectives be made more attractive to more businesses. For what are they in business, if not to achieve their objectives?

MBO means managing in such a way that you always keep your eye on the goal. Don't get so busy fighting alligators that you forget that your original goal was to drain the swamp. Simply explaining that to a businessman should be sufficient to make it attractive.

It means first stating your goals concisely.

A recent client asked me to help him develop a web page for a political party. He stated that the other party had a local web page and that they made a number of political statements with which his party disagreed. He felt that his party needed a web page to be able to respond when the other party made such statements.

I asked him if he really wanted to define the goal of his web page as responding to statements made by his opponents or if he didn't want to define his objectives in a more positive way such as getting a message about the goals of his party out to as many voters as possible or helping to gain control of local political offices or, perhaps, changing the public's political philosophy to more nearly resemble that of his party.

He agreed and said he would think about that and come up with a better statement of goals for such a web page. I told him that I could then help him to make a plan to use the web to achieve his objectives.

He came to me with a plan to fight alligators and I left him thinking about how to drain the swamp.

All that was necessary to get this man more interested in managing by objectives was to explain it to him in this way.

"Discuss how these programs can be integrated with other performance improvement schemes."

MBO is not a performance improvement scheme. It is a philosophy of how to do things. Performance improvement schemes are tools used to achieve objectives. Once an objective has been defined then plans to achieve that objective should certainly include various performance improvement schemes. A proper MBO plan would also include methods to evaluate such performance improvement schemes and to discontinue or modify them if necessary.

Hope this helps. I'm not at all sure if this is the answer you need but I am pretty sure that it is the right answer. I say this because that I think your objective is to come up with the answer expected by your instructor and, if your instructor does not understand MBO in the same way that I do then this answer may not be the one you need.


I have several things to address regarding the content on your web page, but most importantly, I agree! First, the hype without the fight. The internet is, I think, one of the best inventions ever made, yet at times it is the biggest waste of time I have ever seen. As a student I spend hours running around on the web look for information only to find a great title and no substance. Don't get me wrong there is tons of useful information, but there is so much dirt covering it up that it often is lost in the uncovering process.

Second, the concept of managing by objectives. After spending the last five years in the human service field I also have to agree with your observations. The problems you discussed are all true, but there are a few you failed to mention. First, organizations have great mission that are out of date and no longer represent their current functions, which means they are not focused. Then when with the new concept of "strategic" planning organizations struggle to develop a mission that fits what they are doing today. This is a prime example of setting the carriage in front of the horse? The focus has to be on what they want to accomplish not justify what they are doing.

I don't know, I get frustrated with the world today. We are so focused on the newest and brightest that the purpose and function do not matter. I appreciate your candidness and encourage you to continue. Thanks

Sender: bear

Great website.............Just like the one I'm planning to build. Any suggestions would be welcome

Sender: Dwolff3@aol.com

Reply from Duane:

Stress content tailored to your expected audience. Plan overall structure, organization, and traffic flow. Don't get hung up on fancy bells and whistles like frames, java, etc. Use simple HTML unless something else is absolutely necessary. Remember the purpose is to supply an atmosphere and information to your visitors that they can't get or can't get in that way elsewhere.
KISS - Keep it simple, stupid!

Keep backgrounds muted or non-existent. I have actually seen orange text on a red background. Black on white works best 90% of the time. Be sure that your pages work with images turned off or, if not, that there are alternative pages.

Think in terms of what your web visitors might want. For instance, give them a choice to start background music. Don't force it on them. For all you know they may be listening to Mozart in the background while surfing the web. Clicking on your page and having "Turkey in the Straw" imposed on "Night Music" might not be their most favorite experience on the net.

Good luck. Have fun.

My name is Yogi, at the moment I study at monash University, I really intrested with your homepages about management by objective applied to ....... , acctualy I have question for management by objective, I hope you can help me to undestand about this topic, my question is How about if MBO are NOT successful, Are there usually several contingency variable responsible? Would you like to help me to undestand that topic with explain it and give the original example for that, I really thanx for your help. I really appreciate whatever you do regarding my request and look forward to hear from you as soon as possible. Once again thank you very much for your kind attention.

Sender: Yogi Pranata

Reply from Duane:

Thank you for your interest. First I should point out that my essay, "Management by Objectives" is just my own ideas of how I try to achieve objectives in my life. There is a formal method taught in schools of business management also called Management by Objectives. I have not been formally taught this method so I don't know if the methods I have developed through experience is very similar. My total instruction in this method was a one day class in a forestry course thirty years ago.

In answer to your question, the essence of MBO is first to realistically define your objective and then with the help of research or whatever to devise a plan of steps necessary to achieve your objectives. It is the nature of our existence that these plans will almost always be made with incomplete knowledge. In other words, we will not usually have enough information to be 100% sure that our plans will achieve our objective. That is the main reason that plans should include provisions for monitoring the steps as they are implemented and modifying them if necessary.

If there are problems then either one of two things has occurred. Either our plans were not properly made and must be changed or our objective was not properly defined or was defined in such a way as to be impossible to achieve.

In the example I gave about eating an apple, perhaps the knife is too dull to peel the apple. In that case either add the step, "Sharpen the knife" to the plans or change the objective to be "Eat an unpeeled apple." Maybe the objective is impossible because the apple is too green. Then change the objective either to "Eat a ripe apple" or "Eat a pear."

NASA wanted to put a man on Mars but there was not enough money available, so they made "Man on Mars" a long term objective and changed the short term objective to "Put a robot on Mars". They did not just say "Lets put a man in space and see how far we can afford to send him."

One could say that the Vietnam war was an example of managing with no objectives or ill defined objectives and the Gulf War was an example of managing by objectives.

I hope this sheds some light on your question.

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Last revised November 29, 2001.

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