Abstract: As most employees will already be aware, the key ideas of M.B.O. include that management’s job is to start by developing an understanding of the organization’s objectives. Next the manager distills these into specific objectives to be assigned to individual workers, and accomplished typically by the end of the current year. After the assignments, the manager monitors the outcomes during the course of the year, and at the end of the planning period provides a judgment based on the degree to which the workers attain the assigned objectives. This is then followed by the distribution of bonuses or other awards linked to the judgment.
So what is wrong with the approach? Upon reflection during this presentation, and with theory to guide us, numerous issues are apparent. A good frame of reference for highlighting these issues is Deming’s System of Profound Knowledge. Breaking the organizations overall objectives into independent sub-objectives assigned to individuals does not take into account the concept of a system. Such an approach can only lead to sub-optimization, as there is no consideration of the effects on the system outcome of interactions between actions taken by individuals. When the individuals receiving the objectives lead departments, the effect can be especially egregious, and lead to non-achievement of organizational objectives due to departments and divisions working to achieve their own goals (at cross purposes to each other).
Biography: After earning his B.S. in Mechanical Engineering from Michigan State University, Mike Beck started his career in the auto industry, working for General Motors, initially at the Oldsmobile Division. His early roles were in new product development, reliability and test engineering, and included participation in a GM Fellowship, obtaining a Master of Management degree from Northwestern. After returning to GM, Mike met and worked with Dr. W. Edwards Deming, a consultant to the GM Powertrain Division. Mike was selected to become an internal consultant in quality and continuous improvement, spent one year in training with Dr. Deming, and transitioned from Engineering Management to a position co-leading the Powertrain Statistical Network from 1987 through 1992. Strongly influenced by Deming, Mike obtained a second master’s degree during these years, an M.S. in Applied Statistics from Oakland University. In this period Mike developed deep expertise in continual improvement, quality, statistical methods and organizational transformation.
The next step in Mike's career led him to join Toyota, where he assisted in organizing the new Toyota Motor Manufacturing North America headquarters in Erlanger, KY. Experiences at Toyota led Mike to appreciate the power of simple, concrete, visual methods, based on clear principles, to align teams and deliver value for customers. After Toyota Mike’s career path included executive management positions in quality, operational excellence, manufacturing, and field operations at United Technologies Corporation and Terex. Starting in 2009, Mike provided consulting and leadership for applications of lean manufacturing, quality, engineering, and continuous improvement to a range of organizations, including the gaming industry, aerospace manufacturing, construction, and green energy.
In early 2014, Mike joined Joan Wellman and Associates, where he now serves as an engagement leader and consultant in application of the Toyota Production System (TPS) applied to health care. Mike is currently working to improve quality, safety, access and engagement through application of TPS at several hospital systems across the US.
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