Setting the right company goals can be the difference between a focused, thriving organization and a floundering, chaotic one. While not every company will (or should) have the same objectives, using a solid strategy to establish common goals at every level of the organization can help lead to alignment and success. One way to do this is through cascading goals.
Cascading goals are a hierarchical framework to structure an organization’s goals. At the highest or executive level, strategic goals are set, and then those goals cascade down throughout the rest of the organization to help guide team and individual-level goals. Every level in the company should set goals that ladder up into the level above them, creating overall alignment.
Cascading goals are important for efficiency and effectiveness both for the overall organization and every employee within it.
Goal alignment: By establishing a set of overall organizational goals that flow down, this ideally ensures that every team and individual is working towards one set of objectives. In addition to getting everyone on the same page, cascading goals can help with prioritization, says Rachel Cooke, Founder and CEO of Lead Above Noise, a team, leadership, and organizational development consultancy. High-level goals can provide filters to help determine what initiatives and projects should be pursued. “If a piece of work doesn’t ladder up to an enterprise goal, then it’s likely low priority.”
Clarity of purpose: Cascading goals are not only from an organizational perspective, but they also provide clarity on an individual level. By having clear objectives, employees can understand how their work directly contributes and makes an impact on the organization’s success. “[Cascading goals also] prevent people within the company from putting time and effort into work that isn’t supporting the company’s overall objectives, and they should also prevent overlap in the work people are doing,” says Ellen Mullarkey, Vice President of Messina Staffing, a staffing and consulting company. This also leads to operational optimization — ”The purpose is to achieve coordinated and efficient action in a specific direction in a way that makes the best use of everyone’s time and efforts.” At any given time, most organizations have more projects than resources to support them; cascading goals can help teams ditch projects that are distractions in favor of ones that actually help contribute to the company.
Cascading goals need to be clear from the top and then carefully implemented across the organization.
To begin, Mullarkey says “your organization has to know what its overall objective is, whether that’s a short-term objective or a longer-term vision for the direction of the company.” From there, the executive team should commit to specific, measurable goals.
Leigh Steere, Co-Founder of Managing People Better, LLC, a management training tool, recommends that the CEO and executive team commit to owning and driving the process. If the executive team is not completely on board and dedicated to holding everyone, including themselves, accountable, the process is likely to fail. The executive team also needs to define the measurement of those goals and do so in a way that is “so specific that all listeners will interpret the goal in the same way — no room for misunderstanding or varying interpretations.”
Cooke agrees that the top-level goals should be specific, but she also adds they should be inspiring. “We want to know whether or not we’ve achieved it (specificity), but we also need people to care about achieving it — to be engaged in the process (inspiration).
In terms of the number of goals, less is more. “The closer the number is to one, the better,” advises Steere. “Because every organization has different circumstances, there may be a need for multiple goals. However, more goals mean greater complexity for the cascading process, which, in turn, can lead to miscommunications and process breakdowns.”
Once the organizational-wide goals are set, they need to be clearly communicated to each team, manager, and individual so they can then set their own goals. Employees should be invested in creating their own individual goals that are relevant and measurable, and managers should help their direct reports to stay on track. Each level’s cascading goal needs to be held to the same level of specificity as the organization goal so there is no question whether or not it is achieved.
Each level should take a look at their strengths and opportunities to develop their own goals. “The real key here with cascading goals is that, even though they are flowing from the top down, that doesn’t mean that you should be assigning tasks to teams and employees in a rigid manner,” says Mullarkey. “Rather, you should be making sure they know what hill it is your team is trying to conquer and let them figure out what their contribution is going to be and exactly how they are going to achieve their part of the objective.” She says this is critical to keep everyone engaged, involved in the decision-making process, and committed to reaching their own goals.
Coordinating an effort like this requires constant communication, not just from the top down, but also from the bottom up. Steere says that at “every step of the way, employees at all levels of the organization need to understand the executives’ thinking and have real-time authentic discussions of challenges and marketplace dynamics.” There should be a 360-degree feedback loop to keep everyone informed and allow any teams or managers to find and fix early signs of misalignment. Employee level information that is communicated up to the executive level is just as important as information communicated from the executives down. “If there is a disconnect between the executives and the front line employees, it’s a waste of time to implement cascading goals,” says Steere. “Trust needs to be built/rebuilt before alignment efforts will be successful.”
After goals across all levels have been created, Cooke recommends a sense check — “when we look at all the frontline goals, can we draw a clear line from each up to the enterprise goals?” The answer should be yes in order for cascading goals to be properly established.
She says an effective team or an individual should always ladder up to the organization goal. “It might be hard to make the leap from a frontline employee goal directly to the enterprise goal, but as long as the junior employee’s goal links to the layer just above, and that layer’s goal links to the layer above them, ultimately, that cascade will serve its purpose.” Goal setting may take a little time and fine-tuning, “If one truly cannot find a link at all to an enterprise goal, that may be a signal that the goal is just off-course.” If this is the case, there should be a process in place to help the employee, along with their manager and HR team, to reevaluate priorities and measurement and course-correct going forward.
If strict alignment isn’t possible from top to bottom, an organization may want to look into other goal-setting frameworks, such as SMART or OKRs. Regardless of the framework, any organization should focus on setting goals that are specific, measurable, and provide transparency across all teams and levels.
Julie Barker, the VP of Talent at Zylo, says her company uses cascading goals with an OKR framework. “In our quarterly OKR reviews, we review against goals as well as values, so this has been a great way to keep our values top of mind and [understand] how we get goals completed vs. just did we get them completed.” She says some feedback she received was that without a shared, priority OKR across multiple departments, the company may not have accomplished a critical cross-functional goal.
Pay and incentive structures should be adjusted accordingly to the new set of goals. One big mistake that causes cascading goals to fail, according to Steere, is when organizations don’t incorporate the cascading goals into the performance management or pay systems. “Employees will direct their behavior based on what they’re being rewarded to do.” If you are shifting goals, your pay systems should be shifted to align to and reinforce those goals. She also recommends frequent check-ins to help individuals stay on track. “Managers need to be held accountable (through performance management/pay) for the alignment of those who report to them.” In addition, HR teams should reevaluate processes and programs every new goal cycle to ensure goal optimization.