Management by Objectives (MBO) replaced by Management by Skills (MBS) - 7 December 2022

Management By Objectives, MBO, is the traditional way to evaluate employees at ratings time, usually annually.  MBO might work well for routine work such as clerical situations, and it may work well for sales and support, but it fails when managing a research and development team.  For R&D, we need an evaluation framework that accounts for creativity, innovation, and unpredictability.  I have used Management by Skills for this purpose.

In the traditional MBO plan, the employee writes down a series of objectives for the rating period, about half a dozen.  Often the employee will be asked for four objectives, one per calendar quarter.  These objectives are "SMART" - Specific, Measurable, Achievable, Relevant, and Time-bound, and are usually written in the third-person voice.  Thus, an example might be "complete 100% of incoming requests within two working days".  The typical MBO embeds a lot of assumptions.  In this example, we assume the incoming work is enough to fill 40 hours per week, the individual tasks are not onerous (can be completed in a few hours), the incoming work is evenly distributed in time, how to resolve incoming tasks is well understood, and there is little or no prioritization of the incoming requests.  This simply does not describe an R&D environment.  In a research group or product development group, the tasks vary dramatically in scope and difficulty, some require invention while others are routine. The tasks usually arrive in clumps, and some tasks are much more important than others.  This variety is very difficult to oversee using MBO methods and metrics.

Furthermore, R&D is a career position and individuals want to grow, to get promoted.  It is not wise to promote someone for "just doing their job" - the manager will want to encourage people to learn and demonstrate new skills.  The skills can be specific, such as learning a particular technique, or the can be general, such as leadership or planning.  I addressed this by focusing on skills rather than objectives.

Management by Skills, MBS, defines a set of skills that are to be mastered and demonstrated by employees.  These skills are usually on a spectrum, from simple and small growing to complex and large as the employee's career advances.  The newly graduated employee cannot be expected to perform at the level of a 20-year veteran, at least not until that have had a chance to develop their skills.  The skills I identified for my team were derived from HR-provided documents and can be summarized as: flexibility, communications and listening, technical depth, technical breadth, scope of influence, leadership, and impact of decisions.  These may overlap in some situations but they describe important skills in an R&D workplace.  We take them one at a time.

Flexibility is required to survive the rapid pace of change in research and development.  The requirements for a project often change during the project as new information is uncovered.  Someone who is slow to adapt will fall behind as they work on tasks no longer relevant.  Someone who resists change will be eternally dissatisfied.  Those who embrace change and flex with it will focus on the right tasks and have the greatest success.  There is no convenient metric of flexibility and this skill is usually best measured using examples, both pro and con.

Communications and listening.  This is usually listed as "communications" and that can cause one to lose sight of the fact that communications is two-way.  A one-way communications method has a name - broadcast.  Communications also comes in many forms - written & spoken, formal & informal, in person and electronicly, individual and in groups of varying sizes.  In today's world,  a successful researcher cannot only publish and a successful developer cannot only use email.  One must learn to use successfully a variety of forms.  An employee who communicates only with peers may succeed but they will not likely advance until they learn to speak with management.  Finally, success at the highest tiers requires the ability to work with large groups, and someone who communicates a lot but has little effect will be left behind.  As before, there is no convenient metric for communications and listening; it is not sufficient to count papers, technical reports, pages written, or talks given.  This skill is usually best measured using examples where the communications had an impact.

Technical depth is usually what the more junior employees focus on, identifying all the clever tasks they completed.  Technical depth remains an important skill, but it must be evaluated in the larger context of the full set of skills.  In other words, the employee will not be promoted if they lack technical skills, but they will not be promoted if they show only their technical skills.  Technical depth has no easy metric and can be best evaluated with comparisons to (anonymized) colleagues and peers.  Technical depth can sometimes be measured using feedback from peers, such as from talks or papers, or using independent counts such as patents or peer-reviewed publications.

Technical breadth is often paired with technical depth.  An employee who is "a kilometer wide and a millimeter deep" will not succeed.  One needs to show a willingness to take on tasks that require one to learn new skills, and build on those skills.  As a positive feedback loop, skills in a new area can often be applied to familiar problems and generate new solutions.  Technical breadth has no easy metric and can be best evaluated with comparisons to (anonymized) colleagues and peers.

Scope of influence is an important skill to demonstrate.  Presentations given and papers published must be converted into research and development results.  An idea that never leaves the lab has little or no value.  This skill goes beyond simple formulas or techniques - the ability to influence another often depends on communications skills.  A good idea presented badly is unlikely to be adopted in practice.  Influence ultimately comes back around.  When people seek out the employee for advice and ideas, that employee has a broad influence on the organization.  The metric to use here is typically based on examples, especially when the employee causes existing practice to be changed.

Impact of decisions is closely related to scope of influence, but focuses more on the magnitiude of the resulting changes.  The metric can measure efficiency changes (e.g., process improvements), dollar impact on the business, or the scale of the change (local to a group or product to across an entire corporation or product suite).

Leadership is probably the hardest and most dynamic skill to measure.  It is even hard to define.  Early in one's career, leadership is often assigned by management, but later in one's career, leadership is earned.  In one's early career, an employee can be assigned to oversee an intern or a more junior employee.  As one's career advances, the employee will identify opportunies that need addressing and assemble the required skills and team members.  While the junior leader is assigned by management, the senior leader tells managers what they are doing and why they are doing it.

Evaluating employees is a difficult task and changes with the environment and the individuals participating.  This note summarizes some techniques that can be used for effective evaluations in a research and development environment.