Managing by objectives or by values? A false dilemma

In many organizations, managing by objectives and managing by values are treated as two competing philosophies - hard numbers versus soft principles. That's a false dilemma: goals without values lead to team burnout and ethical shortcuts, while values without goals stay a nice slogan on the conference room wall with no real impact on daily decisions.

What happens when one element is missing

A team measured purely by numbers quickly learns to optimize the metric, not the actual outcome the metric was supposed to approximate. A "values-driven" team with no concrete, measurable goals, in turn, loses its sense of direction - it's hard to know if you're improving with no point of reference.

Why this false dilemma is so persistent

Part of this dilemma's persistence comes from goals and values being measured and communicated by entirely different parts of an organization - goals by finance or operations, values by HR or internal communications. That structural divide reinforces the impression that these are two separate, unrelated systems, rather than two dimensions of the same decision.

How to combine the two in practice

• Values as a filter on how a goal is reached, not decoration next to it. The question isn't "did we hit the target," but "did we hit it in a way consistent with how we want to work."
• Goals also evaluated on how they were achieved. A result achieved at the cost of the team or a client relationship should be assessed differently than the same result achieved sustainably.
• A regular conversation about trade-offs before they happen. Defining in advance which values are non-negotiable even at the cost of a goal saves you from making hard calls under pressure.

What this looks like in team performance reviews

Actually implementing this approach requires changing the review process itself - not just making a declaration. Teams that genuinely combine goals with values evaluate outcomes on two axes at once: what was achieved and how it was achieved, with a clear rule that a strong result achieved in a way that contradicts the organization's values isn't rated the same as a strong result achieved in a way consistent with them.

The effect of a well-designed system

A well-designed management system doesn't choose between goals and values - it uses one to guard the quality of the other. A team operating within such a system has clarity about where it's headed (goals) and how to get there in a way it can be proud of (values) - and those two elements reinforce each other, instead of competing for attention.

How to start implementing this model if an organization has only measured goals so far

Organizations moving from pure management-by-objectives to a model that combines goals with values most often start by adding one simple question to their existing review process: "is the way you achieved this result something others on the team should emulate?" That question, simple as it is, forces reflection on the path to the goal, not just the outcome itself.

What happens when values are enforced inconsistently

The biggest threat to this approach's credibility is applying values criteria inconsistently - holding lower-level roles to them while overlooking the same standards for top-performing employees. That inconsistency quickly reveals to a team that values are a declaration, not a real filter on decisions - and it destroys trust in the whole system faster than never having had one at all.