Quick tips: What does MBO stand for?

By Graham Collins • October, 2020 • 2 mins


“Success” is a big word, but it’s also a vague one. It’s hard to figure out whether your sales team is meeting goals if you don’t have a way to analyze and quantify progress. For managers, a larger issue is learning how to amplify your team’s performance in a way that’s universally understood. MBO can help.

Here’s some quick insight for anyone who wonders “what does MBO stand for?” or wants a better way to motivate salespeople.

What Does MBO Stand For?

MBO stands for “management by objectives.” This management strategy aims to improve organizational performance using clearly defined objectives. A key component is that these objectives are decided as a group. Sales management and individual contributors work together to determine the goals.

MBO advocates say that implementing goals the entire team agrees upon leads to greater employee participation and commitment. It ensures everyone is working toward a common goal — outline your targets and remove the potential for confusion. The purpose of MBO is to align all parties involved toward a shared goal.

Why use MBO in sales?

In addition to serving as a motivator, MBO has other advantages, such as informing sales strategy. Goal-setting and planning go hand-in-hand. Once you find out where you want to go, it’s easier to map out how to get there. Management by objectives decentralizes authority, bringing management and employees together in pursuit of shared achievement.

For sales reps, MBO offers clarity that can help increase commission. Understanding expectations and removing confusion is a great way to awaken ambition and stoke excitement.

How can you track MBOs?

Some critics of MBO say that objective-based management can be both time-consuming and costly. Using a management information system that gauges performance and tracks achievements as they relate to the outlined objectives can help immensely.

QuotaPath’s commission tracking software is built with revenue-related objectives in mind. It’s easy for reps to see how much they’re earning from every deal and how close they are to hitting their quota. Team leaders can keep an eye on the leader board while using the forecasting feature to predict success and test “what if” scenarios.

For a tool to help you use MBO to your advantage, sign up for QuotaPath today.

Updated on October, 2020


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