Cascading: bringing goals into the units

What happens during cascading?

The strategy gets translated into the organization. From the target picture, you derive annual goals with key results, from those quarterly goals, and these are passed on level by level.

This step marks the start of execution. Everything before it was development, even if it felt like work.

The timing is delicate. After the announcement "we're realigning," a communication vacuum opens up unless it quickly becomes clear what that means for each individual. Rumors fill that vacuum, and the strategy tiger turns into a paper tiger.

The difference from the communication in the previous step matters. There, the point was for the organization to understand the strategy. Here, the point is for every team to know what it will do differently over the next three months.

An example from practice shows why this is more than communication. After weeks of work, an international company approved a group strategy that included exiting a product segment that had been unprofitable for years. Everyone was enthusiastic. Months later, the numbers from a key market showed that exactly this segment was still being served there.

How far down do you cascade?

Far enough that every person understands what their work contributes to, and no further. Ideally the cascade reaches everyone in the company, but not every level needs its own goal system.

For colleagues at the front desk or in the mailroom, a formal goal system rarely makes sense. That doesn't mean they aren't part of it. It means participation takes a different form there.

In smaller companies, two levels are enough. Management and team leads will do if there is no other leadership level. The method scales down just as well as it scales up.

Plan on four to six weeks for the full cascade. Every level needs time for preparation, dialogue and follow-up, and the sessions can only be run in parallel to a limited degree, because each level needs the result from the one above.

Watch the group size. More than 15 people per round prevents active participation, and the dialogue turns into a presentation with an audience.

How does a team dialogue work?

As a conversation, not an assignment. That's the difference between a cascade and a top-down target, and it decides the impact.

Every leader prepares their dialogue, runs it with their own team and passes on the result. Not all goals have to be quantified. The better they fit together across levels, the more likely the overall goal is reached.

The last step is the one teams tend to skip, and it's the most important. Vertical alignment is where you see two units pulling toward opposing goals. Without this pass, you'll find out in the third quarter.

What does the central platform do?

It keeps objectives, key results, initiatives and progress in one place. There's no shortage of recommendations and tools, from a spreadsheet to specialized software.

The trick is not to overdo reporting and tracking while still creating transparency. Three groups have different needs here.

• Company leadership wants an overview of progress, resource use and value contribution, so they can step in when needed.
• The process owner needs the overview to steer the process and prepare each round.
• The teams need their own goals, without having to work through reports that aren't theirs.

Set up the platform before execution starts. A cascade that begins on an ad hoc basis and whose results are collected after the fact loses exactly the commitment it was meant to create, and it loses it in the first few weeks.

How do you avoid meeting overload?

That's the real risk in this step. Because the process borrows from the OKR method, it easily breeds a culture of tracking and alignment meetings that costs more time than the work itself.

The experience of companies working with this method is clear: if you don't cap the number of meetings from the start, you lose buy-in in the second round, and winning it back is hard.

Two simple rules keep it in check. First: every round ends with a decision. Prioritize, sharpen, reallocate or stop. A meeting that only collects status updates deserves to be canceled.

Second: report against the objective, not against the task list. The question isn't what someone did. The question is whether the key result moved closer.

Discipline and consistency in daily work are the real challenge. The method can be explained in an hour. Having it still running in the fourth quarter is the achievement.

What's the result?

A coherent package of objectives and key results for the coming quarter that fits together across every level, plus the agreed initiatives and owners.

Check the package for contradictions before it takes effect. Two teams planning on the same person for different projects is the most common case, and it shows up in vertical alignment if you look for it deliberately.

The book calls this package the heart of the entire process, and that's no exaggeration. It's the first point where the strategy becomes concrete for someone without a leadership role.

Transparency across all levels is the key here. When a team can see what the neighboring department is working toward, alignment happens on its own, instead of running through the leadership level.

After that, the routine begins: new goals are derived each quarter, and progress is tracked in between. So the cascading step never really ends, it repeats, and that's exactly why it needs a format that still holds up the fourth time around.

The goals don't have to look the same in every team. A sales team works with different measures than production does, and that's how it should be. All that matters is that both clearly contribute to the same higher-level objective.

One final point about the first round. It takes longer and feels clunkier than every round that follows, because the method is new. If you judge the method by that, you'll stop after the first quarter and give away exactly the part where it starts to work.