Have you heard of Management by Objectives (MBO)? Developed by Vicente Falconi, this methodology stands out for connecting strategic planning to the routine of the entire team. However, contrary to what one might think, more than just a management theory, MBO functions as a gear that aligns top management's goals with operational execution.

Many companies have impeccable plans but fail during implementation. In fact, strategy execution is the central challenge that determines a business's survival and success. In these contexts, Falconi's method becomes crucial, as it offers the necessary structure to transform grand objectives into measurable results.

Therefore, in today's article, we will explore the fundamental aspects of this methodology. Thus, we will understand how GPD can enhance the implementation of your strategies and, consequently, elevate your organization's level of excellence. Shall we begin?

How did the Falconi Method of GPD originate?

Until the 1980s, the national scene prioritized government bureaucracies over effective management, rarely discussing goals or action plans. This dynamic only began to transform in the 1990s, when market liberalization forced companies to adapt quickly to new demands. After all, it was during this period that the pursuit of efficiency became the norm, driving the need for more robust methods.

In this context of change, Vicente Falconi introduced the concept of Management by Objectives (MBO) as part of Total Quality Management. Falconi's great merit was realizing that the deployment method could be applied to all areas of the organization. Thus, he went beyond the initial approach, which was centered only on the quality of technical processes, and took the strategy to the executive level.

In his book “Management by Guidelines”Falconi details this approach and highlights how strategy and management can be integrated through solid guidelines.

But after all, what is the GPD methodology?

Photo: Example of the strategic map of the GPD in the strategic management software of the Falconi group, Tune by Actio.

Management by Directives (MBD) is a business management approach that aligns an organization's strategic objectives with daily activities, ensuring the integration of all company areas to achieve them. 

Furthermore, these guidelines are developed based on critical analyses of the company's current situation and market trends. In this way, it takes into account the needs and expectations of customers, shareholders, and other stakeholders.

What are the objectives of management by directives (MBD)?

Now that we understand the origin and function of the GPD in the Falconi Method, the next step is to identify the objectives that support this practice. This is because, more than simple monitoring, this methodology seeks to ensure that the company's vision is translated into practical and measurable actions at all levels.

In other words, the central focus is to eliminate process fragmentation, ensuring that each sector directly contributes to the global results. And by implementing the objectives we will see below, the organization establishes a continuous flow of improvement and control. Check it out:

1 - Goal Setting

The initial focus of GPD is to establish clear objectives for the business. To achieve this, the methodology is based on a rigorous analysis of internal and external contexts, as well as the expectations of customers and other stakeholders.

In this process, the formulation of goals must derive directly from the organization's future vision. For this reason, it is essential that this planning considers strengths, weaknesses, opportunities, and threats, ensuring that the strategy is realistic and resilient.

2 – Goal Optimization and Management

Once the goals have been established, the responsibility for effective optimization and management falls on the direct supervisors of the GDP. 

This implies the definition of performance indicators, the monitoring and control of targets, and the implementation of necessary adjustments to ensure their achievement.

3 – Continuous Improvement

Finally, the Falconi method of GPD also aims to foster continuous improvement of the company by identifying growth opportunities in processes, products, and services. However, for this to happen, managers must invest in a critical analysis of the results obtained, implementing corrective and preventive actions as needed.

Looking for software for Strategic Management? Get to know Tune by Actio, developed by the Falconi group company.

How to implement the Falconi Method from GPD in 3 steps?

To put Management by Guidelines (MBG) into practice, it is not necessary to deal with overly complex processes. However, the success of the implementation requires attention to specific points so that the methodology is applied correctly and generates real benefits.

Ultimately, effective execution depends on discipline and a logical chain of steps. Thus, by following the fundamental steps of the Falconi method, your company ensures that the strategy doesn't remain just talk, transforming into a routine focused on high performance. 

Check out the main pillars for this application in three steps:

1 – Have a structured plan

First, it is crucial to have a well-developed strategic plan that reflects the company's vision for the coming years. To this end, senior management must clearly define the company's objective, that is, where it wishes to head. 

Therefore, only from this understanding is it possible to develop this objective into goals, which will be distributed among the various departments and collaborators.

Define the role of each sector

The first breakdown in strategic planning occurs when establishing the role of each area in achieving these objectives. Therefore, it is crucial to make it clear to each department how the activities carried out will directly influence the organization's course toward its objectives. 

Furthermore, this clarification makes it easier for those working at the tactical and operational levels to understand the impact of their actions on the company's macro-strategy.

3 – Establish indicators

Finally, indicators are crucial resources for evaluating the effectiveness of the actions outlined on the company's path to progress. 

By monitoring these metrics, it becomes possible to assess the company's proximity to achieving its goals and, consequently, adjust course and implement improvements if necessary.

Also read: Project Scope

Introducing Tune by Actio, a strategic management software

The application of the Falconi method has contributed significantly to the success of various organizations. After all, by strategically distributing shares, the methodology not only allows for effective implementation of plans but also the identification and correction of chronic problems that hinder growth.

Thus, by adopting GPD, the company standardizes its short-term and long-term planning processes. This move strengthens organizational culture and promotes employee engagement, as they begin to clearly understand their role in the results. However, the success of this journey requires total commitment and the support of adequate technology to centralize information.

This is where Tune by Actio emerges as the ideal solution for managing GPD in your company. As part of the Falconi Group, the software offers a multi-methodology platform that integrates various areas and guarantees full control over goals and action plans. This is because using the right tool is undoubtedly the final step to ensure the effectiveness of your management.

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Frequently Asked Questions about the Falconi Method

Check out some of the most common questions on the topic below: