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CHAPTER 6 PLANNING AND GOAL SETTING - Coggle Diagram
CHAPTER 6
PLANNING AND GOAL SETTING
6.3 PERFORMANCE MANAGEMENT
Management by Objectives
Defined by Peter Drucker in 1954 (The Practice of Management)
A collaborative "operating system" for teams
A system where managers and employees collaboratively define goals for every department, project, and person to monitor performance.
The 4-Step MBO Process:
Step 2:
Develop Action Plans — Define specific steps to achieve set objectives
Step 3
: Review Progress — Periodically monitor performance and take corrective actions if off-track.
Step 4
: Appraise Performance — Evaluate overall success and align motivation with company goals
Step 1
: Set Goals — Corporate, Departmental, and Individual levels.
Benefits of MBO:
Directs manager and employee efforts toward goal attainment.
Improves performance across all organizational levels
Enhances employee motivation.
Aligns departmental and individual goals with overall company goals.
Problems / Limitations of MBO:
Rapid/constant changes prevent MBO from taking hold.
Poor manager-employee relationships reduce effectiveness.
Operational goals may displace strategic long-term goals.
Rigid/mechanistic cultures and values that discourage participation harm the process
Excessive paperwork saps energy.
Single-use and Standing Plans
Single-use
Definition
Plans developed to achieve objectives that are not likely to be repeated in the future
Components
Programs
Projects
Standing Plans
Definition
Ongoing plans that provide guidance for tasks or situations that occur repeatedly within the organization
Components
Policies
Rules
Procedures
Types of Organizational Plans
Single-Use Plans
Developed to achieve a one-time, non-repeating objective
Building a new company headquarters over three years.
Standing Plans
Ongoing plans that provide guidance for recurring situations.
Implementing a strict "No eating in client-facing areas" mandate
EFFECTIVE GOALS
Specific & Measurable Defined Time Period Cover Key Result Areas Challenging but Realistic Linked to Rewards KPIs: Track progress (e.g., wait time < 60s)
6.4 BENEFITS AND LIMITATIONS OF PLANNING
The Benefits
Guides resource allocation
Sets a definitive standard of performance
Provides motivation & commitment
The Limitations
Causes fatal rigidity in a turbulent environment
Creates a false sense of certainty
Gets in the way of intuition and creativity
6.1 GOAL SETTING AND PLANNING OVERVIEW
Mission statement
Definition
: Reason organization exists; describes values & aspirations
Importance
: The "why"; Apex of hierarchy; Guides stakeholders; Baseline for all goals.
Goals
Definition
: Desired future state organization attempts to realize. The "
Destination
"
Characteristics
Effective Goals:
Smart: Specific, Measurable, Attainable, Realistic, Time-bound
Key Result Areas
Linked to Rewards
Key Performance Indicators (KPIs)
: Measure progress towards strategic goal.
Goal levels
Hierarchy
Strategic
: Senior Mgmt - Official goals, broad statements for whole organization.
Tactical
: Division - Execute major strategic plans, specific department plans.
Operational
: Departments/Individuals - Specific action steps, expected results.
Alignment
Goals at each level must guide and support others
Planning
Definition
: Act of determining goals & defining means to achieve them. The "Blueprint" for goal achievement.
Process
Develop Plan
Translate Plan
Plan Operations
Performance Management
Monitor & Learn
Adapt , Review
MBO, Action Plans
Specific Goals, Measures
Tactics, Scenarios
Mission, Goals
6.2.GOAL SETTING IN ORGANIZATIONS
Core Foundation & Collaboration
A visual representation of the key drivers of an organization's success
Individuals and teams must work in concert
The 5-Level Success Pyramid (Bottom-Up)
Level 1 (Base): Learning & Growth
Employee development Continuous learning Innovation culture
Level 2: Internal Business Processes
Supplier relations Ops efficiency (Operational efficiency) Innovative products
Level 3: Customer Service
Relationships Quality/reliability Innovative solutions
Level 4: Financial Performance
Increased revenues Higher productivity
Level 5 (Apex): The Mission
Optimal Value
ORGANIZATIONAL MISSION
Basis of Goals
: Strategic level → Tactical level → Operational level
Reason for Being
(Top of Hierarchy): Describes values, aspirations, and foundational goals
Stakeholder Communication
: Outlines stated purpose and values
ALIGNING GOALS USING A STRATEGY MAP
Consistency: Goals must be consistent and mutually supportive
Hierarchy Flow: Achieving lower-level goals permits the attainment of high-level goals
Collaboration: Individuals, teams, and departments work in concert
Strategy Map: A visual representation of key success drivers
6.5 PLANNING FOR A TURBULENT ENVIRONMENT
Stretch Goals
Pushing for supreme excellence
Scenario Building
Visualizing future possibilities
Crisis Planning
Preparing for sudden, severe events
Contingency Planning
Plans for emergencies & setbacks
