Summary: We have never been smart enough to know in January what will be business critical next December. Strategy also needs to adapt to a changing environment. How many times have we found our people working in December on a goal with incentive dollars attached that became obsolete in March? We suggest an alternate approach. We advocate 90-day goals to integrate key activities. A format for implementing this is discussed in the chapter. ALL managers, directors, and VPs are judged and incented on the same exact goals, ensuring both cross-functional cooperation and focus on those most critical interim activity milestones. Since our activities are already integrated and multi-functional, 90-day objectives are set at the beginning of each quarter. We have typically allocated 25% of the management and executive incentive program to 90-day goals (with the remaining 75% made up of more traditional revenue, profit and margin metrics). These quarterly MBO tasks need to be significant. In our experience, this has been the single best way to ensure leadership alignment with integrated activities to increase the probability of meeting organizational goals.
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Copyright © 2018 Steve Fairbanks and Aaron Buchko