Cascading goals, or how to achieve excellent results
When formulating and subsequently implementing a company’s business strategy, it is extremely important that all employees understand the overall direction in which the organization is heading, the goals it wants to achieve, and that their work is closely linked to these goals. How can this be achieved? By cascading goals.
Cascading objectives – what is it?
Cascading goals, or rather cascading business strategy, is the process of organizing and communicating strategic objectives so that all employees understand and accept them and work together to achieve them.
According to the Leanpassion dictionary, cascading goals is defined as “developing the strategic goals of a company into goals for individual structures, e.g., departments within the company, and then into individual goals, or translating strategic goals into the goals of individual employees.”
Cascading goals – key benefits
The process of cascading goals is important from the point of view of linking employee functions with strategy implementation. Nowadays, employees want to be involved in their work and feel that they have an impact on what is happening in the company. Their high level of engagement brings enormous benefits to the organization. According to Gallup research, organizations with high levels of engagement achieved a 20% increase in sales, were 21% more profitable, and 17% more productive than organizations with low levels of engagement. Cascading organizational goals therefore makes all employees feel included in the functioning of the company and jointly responsible for implementing the business strategy.
Methods of cascading goals
When cascading objectives, we can choose between the following methods:
- vertical and/or horizontal,
- direct and/or indirect.
Vertical cascading
This method of cascading goals involves breaking down higher-level strategies into lower-level ones. In this method, the leader oversees the setting of goals. He or she determines what actions need to be taken by different teams to achieve the main goal. An example would be a situation where a corporate strategy is broken down into strategies for each department. Individual strategies implemented at a lower level are, in a sense, fed back into the higher-level strategy—they contribute to its implementation.
Horizontal cascading
This cascading method involves breaking down the business strategy into various, cooperating functions. It means dividing goals into various tasks for employees who work together. In this structure, employees have the freedom to make their own decisions based on organizational guidelines. This type of cascading works best when we want employees to drive creativity and innovation. This makes teamwork much easier—operational decisions are made by the people performing the tasks.
Direct cascading
The direct method of cascading goals means that everyone works toward the same goal. For example, the main sales goal of “Increase revenue by 70%” is divided into sales goals for each department, and each team is given a clearly defined task: “Increase revenue by X%.”
Indirect cascading
The indirect method of cascading goals means that different teams work towards the overall goal in their own department-specific ways. For example, the main strategic goal is to improve customer satisfaction by 15%. This is a goal that requires the efforts of all teams: sales, logistics, product quality, etc. No single department of the company is able to achieve the main goal on its own.
For strategy cascading to work effectively, it is necessary to regularly check the implementation of individual tasks by discussing achievements to date with employees. Thanks to such meetings, we can adjust goals if necessary, recognize employees for their achievements, and discuss what lies ahead in the near future. It is also a good time to re-explain tasks if necessary. Thanks to regular feedback, managers are able to maintain the commitment and motivation of their employees.
Example cascading of goals
What does goal cascading look like? Below, we describe this process based on Company X, a seller of 3D printers.
1.
The CEO of Company X sets a goal for the entire organization -> to become the leading seller of 3D printers in Poland. He then breaks this goal down into specific sub-goals:
A. company X’s 3D printers account for 70% of all 3D printer sales in the country,
B. 90% of customers are satisfied with sales and after-sales service,
C. brand visibility increases by 50%.
2.
He delegates these key tasks to sales, customer service, and marketing managers. Each of them creates their own tasks and goals.
And so, for the sales manager (A), the goals are:
a1. hiring 4 new salespeople,
a2. increasing the number of printers sold by 60% within a year,
a3. implementing training for all salespeople.
3.
Individual sales department employees transform the goals presented to them by their manager into one of their individual goals and, for example, goal a2. increasing the number of printers sold by 60% within a year is broken down into:
a2 – 1. talking to at least 70 potential customers per month,
a2 – 2. successfully closing at least 15 sales per month.
When these goals are achieved by the department employees, the managers’ goals will be achieved and, as a result, the strategic goal presented by the CEO.
The cascading of objectives in management allows you to explain to employees what the company’s priorities are, while giving them the opportunity to decide how they will work to achieve them. With clear objectives, employees can understand exactly how their work directly contributes to the success of the organization and thus become fully committed to achieving the set targets.
We invite you to talk to our advisors and see for yourself how effective the management by objectives system can be.
Małgorzata Turowska
Gosia has a scientific mind and feels at home in the world of processes, structures, and systemic solutions. With her technological approach and HR flair, she designs solutions that allow companies to say goodbye to the chaos of spreadsheets and take their competence management to the next level.
At HRcode, she is responsible for creating and developing tools that truly support HR departments, regardless of the size of the organization.
On her blog, she shares her knowledge on how to organize HR processes, implement changes step by step, and convince organizations that digitization pays off. Always to the point, without beating around the bush.
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