What Are Cascading Goals, and How Do They Improve Productivity?
Here’s how cascading goals can help align your employees’ work to your company’s overarching goals and ultimate success.
You just announced a new set of long-range goals for making your small business more competitive, profitable, and mission oriented. Your executive team spent a year planning and finally communicating your organizational objectives to everyone in the company, only to find that the goals aren’t in sync with employees’ expectations. Ask what went wrong, and you’ll likely hear users of “cascading goal” systems blaming the problem on a failure to align your company’s goals with employees’ goals.
Setting cascading goals involves rolling out company-centered objectives from the executive suite to descending levels in the organization, while ensuring alignment with managers and employees’ goals. Although the cascading format is hierarchical, it takes a “we’re all in this together” approach to setting and meeting goals.
A variety of goal-setting models fall under the umbrella term “cascading goals.” These frameworks include V2MOMs (Vision, Values, Methods, Obstacles and Measurement), OKRs (Objectives and Key Results), BHAGs (Big Hairy Audacious Goals) and “The What’s and The How’s” model.” Each framework has its own set of criteria that small and medium-sized businesses can consider when adopting a company-wide goal-setting strategy.
Challenges of cascading goals
Although cascading goal frameworks can bring many benefits, executing them can be challenging. Data from The Economist Intelligence Unit (EIU) found that 61% of cascading strategies miss the mark, and that, on average, companies lose 40% of their strategic value because of implementation failures.
Shortfalls in carrying out cascading goals can derail the system’s core function — multilateral goal alignment. Employment experts like Liza Streiff, CEO of Knopman Marks Financial Training, a New York City-based firm, point to misaligned goals as a possible root cause of employee productivity and engagement problems.
“If you want to move your business in a certain direction, the entire organization must work in tandem.”Streiff told Workest that setting organizational goals is only effective when aligned with employees’ goals. “If you want to move your business in a certain direction, the entire organization must work in tandem,” Streiff commented. “When managers and/or leadership are not aligned, confusion can spread throughout an organization. A misalignment of goals can be unproductive, leaving both employees and managers frustrated.” She added that people naturally work towards their own objectives, which makes a company-wide strategy longer to execute.
A productivity boost
Goal achievement is a measure of performance, and when performance is tied to cascading goals, the result can be a boost in productivity. Cascading goal systems are more likely to raise productivity when the following management shifts occur.
Company goals link to employees’ goals
Employment experts generally agree that employees do their best work in environments that acknowledge and value everyone’s contribution. Companies can create positive work environments by using cascading goal systems that recognize and incorporate employees’ goals into organizational objectives.
A study by Mercer, an employee healthcare and investment consulting firm, shows that goal setting occurs mostly at the employee level. The firm found that 83% of global companies require individual goals, while just 56% require enterprise level goals. These results suggest that many managers and employees are setting individual or personal goals without a link to the company’s objectives. A cascading goal system could provide the missing link.
Reflektive, a performance management platform, recommends that all goal setting under the cascade system begin with the company’s overarching goal, which it defines as a reflection of the company’s mission. After that, all other goals — usually personal or developmental — can then connect to the overarching goal. According to Reflektive, goals that are misaligned with the overarching goals detract from a company’s mission, and that even goals that seem insignificant can increase employee satisfaction. This, in turn, can raise productivity.
Performance alignment replaces performance management
Traditional performance management strategies are losing their luster in the workplace. A growing number of companies are moving away from the often stressful, infrequent yearly meetings between managers and employees towards more collaborative monthly, even weekly, check ins.
A Deloitte study found that 58% of executives think performance management strategies don’t engage workers or bolster productivity, and thought leader Josh Bernsin estimates that 70% of global enterprises have shifted away from the performance management model.
Instead of performance management, companies can focus on performance alignment. A Zenefits report describes 5 essential qualities of performance alignment:
- Is linked to a company’s goals and values.
- Is adaptable and measurable.
- Drives the intended action.
- Is frequent and consistent.
- Treats employees like adults.
Company goals include productivity improvements
Well-structured work environments encourage employees to find and implement ways to improve productivity.
Well-structured work environments encourage employees to find and implement ways to improve productivity, according to Deloitte. The professional services firm recommends that companies make productivity improvement an organizational goal and cascade that objective internally.
Employee engagement is intensified
Productivity is likely to increase when employees understand how their work contributes to the company’s overarching goals and ultimate success. According to a 2019 report, A Road Map to Success: Cascading Goals, cascading goals demonstrate that message by engaging employees in the goal-setting process.
The strategy
Having the right strategy is as much a part of an effective cascading goal system as aligning objectives. Employment experts generally agree that the first steps in adopting a cascading goal system include:
- Establishing clear, strategic, and measurable executive-level goals.
- Developing a process for rolling out the objectives.
- Setting up a check-point system to ensure goals are linked throughout the company.
- Establishing an incentive program tied to performance that fortifies the goals.
For Streiff, the strategy starts with a question: “What are the next 3 things we need to focus on this quarter or year to really move the needle?” Once her leadership team decides what to focus on, each member comes up with 3 ideas that align with the company’s objectives.
The leaders then go to their teams to make sure their goals ladder up to the company’s objectives. “This way, not only are the activities on track with the direction we’re driving the business in,” said Streiff, “but our team is also set up to win!”
