Many businesses manage by objective. Management by objective is when management describes the goal rather than the process. For example, the boss says, "You have to produce 200 widgets by this afternoon." As another example, the sales manager says, "You have to meet your third-quarter quota or we will be having a difficult conversation." This example is actually a "management by objective" statement with a threat thrown in to make sure you understand it is all about the numbers or the goal.
A difficulty with management by objective is that the objective is continually changing. The objective is a goal; it is not a process. Companies are forever changing their objective. This quarter the company is focused on getting new customers. Next quarter the company will be focused on revenue or cost-cutting measures. The objective and management of the objective are moving targets.
When companies and individuals manage by activities there is a constancy of purpose. Activities can be monitored, refined, and adapted, but they are a permanent method of accomplishment. Objectives such as goals are temporary. An objective or goal is accomplished and then a new goal or objective replaces the old goal. For example, a company has a goal of reaching $100 million in sales this year. Every executive, manager, salesperson, and production worker is charged with doing his or her part in attaining the goal. If they attain their goal, next year you can bet the goal isn't going to be $100 million, it is going to be a larger number or there will be a new goal based on market share or some other qualifier.
Management by activity is continuous in nature. When a company manages by activity it is committing to constant improvement. Instead of asking the question, "How can we generate $100 million this year?" management by activity asks the questions, "How can we be more productive? How can we do our jobs better? How can we improve?"
If you have young children, you probably know the challenges of having your kids keep their rooms clean. You might say, "This room is a wreck. I'll be back in 30 minutes and it better be clean." When you return in 30 minutes, little Henry is still sitting in the middle of the room playing with his toy cars surrounded by dirty laundry and toys. What happened? This is a classic example of management by objective. You told the little fellow what you wanted and not what he needed to do. You described the goal: a clean room. However, you did not describe the process to achieve that goal.
Try this method next time: "Henry, I want you to pick up all the socks and put them in your bottom drawer." Guess what? When you return everything else is still scattered all over, but you won't see any socks. Now you can continue, saying, "Henry pick up all the toys and put them in this corner." This principle is also true for statements such as "Behave," "Do well in school," "Don't get in any trouble," and so on. Kids don't know what you are talking about when you describe a goal. Even if they do understand the goal, they wonder why it is suddenly so important. If a clean room is such a big deal, why isn't it clean already? When you manage little Henry with activities, he learns where to put his socks, toys, and everything else. Eventually he learns how to keep his room clean all the time (this may not happen until shortly before little Henry leaves home). If you want your kids or anyone else to follow your management lead, the answer is management by activity. Activities are ongoing processes that are the journeys to take you wherever it is you want to go.