Goal Cascading

What goal cascading is

Goal cascading (مواءمة الأهداف) is the derivation of the goals of departments, teams and individuals from a higher goal, so that each employee knows which goal of the organisation their work contributes to, and so that what everyone does meets at the result the organisation wants. The word “cascading” comes from the image of a waterfall: the goal falls from one level to the level beneath it, step by step.

It is a relationship between goals, not a kind of goal. The higher goal and the lower goal may each be framed in any framework, and cascading asks a question: why is this team working on this goal, and what does the goal add to the one above it? If the answer to that question is missing for a goal, the goal is isolated, however tight its wording.

How goal cascading differs from the wording of a single goal

Frameworks for wording deal with one goal, whereas cascading deals with the link between two goals. SMART goals are a framework that requires five attributes of a goal, one of which is that it be “relevant”, that is, that it serve an existing priority of the organisation. Cascading is what shows that priority and connects the goal to it, so “relevant” is not left as a word in a list.

The same holds for objectives and key results (OKR), a framework that ties a qualitative objective to a small number of numeric results by which its attainment is shown. The shape of a single goal and its results is set by that framework, whereas how a team’s goals are derived from the organisation’s goals is a matter of cascading. The two can be combined, and neither requires the other.

Where the chain of goal cascading begins

The chain begins at what the organisation wants to become and what it does today. These are the subject of the vision statement, which describes the state the organisation aims to reach over a long horizon, and the mission statement, which says what the organisation does today and for whom. Neither statement serves as a goal on which a team is held to account, because each gives direction. From that direction the goals of the year are derived, from the goals of the year the goals of the departments, and from those the goals of the teams and then of the individuals.

The number of levels follows the size and structure of the organisation, which organisational design settles when it determines who reports to whom. A small organisation may need only two levels, and an organisation of several departments may need four. Each extra level can reduce the clarity of the link between an employee’s goal and the organisation’s goal.

Does goal cascading run only from the top down?

Not necessarily. Some organisations start at the top and cascade downward. Others ask teams to propose their goals first, which are then gathered and adjusted. Others mix the two ways: management sets the direction, the teams propose how, and the two sides negotiate. The difference lies in the effect. What is handed down from above can be more consistent, and what a team proposes can give a more realistic estimate of what can be implemented. An organisation that hands down goals without hearing those who carry them out can end up with goals that are consistent with one another but detached from reality.

Is every goal divided among those beneath it?

No. Some goals can be divided and some cannot, and the error is to handle both kinds alike:

• An additive goal. An example is a rise in revenue by a set amount. It is divided among the teams, and the sum of what the teams achieve must equal the amount required.
• A shared goal. It is not divided. Customer satisfaction and speed of completion are examples. Instead each team is asked what lies within its control that moves this figure, and goals of different kinds are derived for each team.

If a shared goal were divided like a sum, each team would receive a share of something that no one holds alone, and the goal would have no one responsible for it.

An additive goal: shortening the monthly close

Take a hypothetical organisation whose goal for the year is to cut the time to close the financial month from 10 working days to 6, which is 4 days less. The finance department derives for each of its teams the days that the team saves:

• Bank reconciliation: one day.
• Payroll posting: one day.
• Expense approval: one day.
• Management reports: one day.

The total is 1 + 1 + 1 + 1 = 4 days, which equals what is required. That is the test of cascading for a goal that adds up: the goals at the lower level are added, and their sum equals the goal at the higher level. If the approval team achieved only half a day, the total would be 3.5 days and the close would stay at 6.5 days (10 less 3.5), even if the other teams met all their goals. The organisation then loses its goal although every team says it delivered.

Had the goal of the finance department been “the departments’ satisfaction with the speed of service”, adding would not help. Each team is asked what moves satisfaction from its own work: the expenses team answers the departments’ queries within a day, and the payroll team closes exceptions before the payroll run. For this kind of goal there is no calculation that says the goals are sufficient, so the judgement rests on measuring satisfaction directly at the end of the period.

How a team writes its goal from a higher goal

The writing proceeds in successive steps. The higher goal is first read with its exact wording and its measure. The team then asks what is within its control that moves this figure, and writes the answer with a measure specific to the team. Next the team compares the answer with what the neighbouring teams wrote, to learn whether the total covers what is required or a gap remains. The last step is that those above and those below agree on the wording.

A team may find that nothing within its control moves the higher goal. That is not a fault of the team but information. Either the goal does not concern the team, so nothing is derived from it for the team, or the team lacks something it needs, such as authority, a tool or data, and that is written as a request to management.

A goal that does not add up: customer satisfaction

In another hypothetical organisation the goal was to raise customer satisfaction from 70% to 80%, which is 10 percentage points. It would be wrong to tell each of four teams “yours is 2.5 points”, because satisfaction is not a sum. The better course is for each team to ask what in its work moves satisfaction. The support team cuts response time from 24 hours to 8, the billing team cuts invoice errors from 5% to 2%, the delivery team raises adherence to the appointed date, and so on.

These are goals of different kinds and they cannot be added, but they can be tested by their connection to satisfaction: has it been shown that response time and invoice errors affect it? If the relationship has not been shown, the teams may meet all their goals and satisfaction stays where it was. For this reason the higher goal is measured directly at the end of the period, and the total of the goals beneath it is not taken as enough.

Who is accountable for goal cascading

Executive management at the top is accountable for the cascade, because it announces the goal and explains why. The manager in the middle of the chain is accountable too, because that manager carries the goal to the team, translates it, and raises the difficulties the team sees. Human resources holds the framework: when goals are written, on what form, and how they are reviewed. It does not hold the content of any team’s goal. Whoever loads human resources with the content turns it into a function that writes goals for people whose work it does not know.

What breaks goal cascading

• Literal copying. Each level takes the higher goal word for word, so no one knows what their share is.
• Goals outside the control of their holder. An employee is given a goal that is determined by other people’s decisions, and has nothing within reach to do about it.
• A long chain. Each layer rewords the one before until the purpose is lost.
• Confusing a goal with a standard. Performance standards are a standing description of the acceptable level in a job and are not a goal for this year, so they are not cascaded as goals are.
• Hidden goals. A team does not know the goals of the neighbouring team, so it does not see what it depends on.

How to tell whether goal cascading is working

A simple test is to ask employees two questions: what is your goal this period, and how does what you achieve serve the organisation? Suppose 30 employees in a hypothetical organisation are asked and 21 answer in a way that links their work to a higher goal. The rate is 21 ÷ 30 × 100 = 70%, and it means that nine employees did not link their work to a higher goal in their answer. The figure is approximate because it comes from a small sample, and its value is that it points to the place where the chain breaks, not that it measures the chain precisely.

Managers are asked a different question: do you agree on who is accountable for each higher goal? If a goal has no one accountable for it, or two people, cascading needs a decision before it needs a review.

What happens to goal cascading when the higher goal changes

Priorities change during the year, and if the higher goal changes, the goals derived from it hang loose. The place to review them is the review held in the middle of the year, a conversation between a manager and an employee in which they review what was achieved and adjust the goals if priorities changed. If the change is large, it does not wait for the midpoint, and the question is asked in the one on one meeting: does your goal still serve what has changed?

Revisiting the goals needs an explicit decision for each goal: kept, adjusted or dropped. Dropping a goal that serves nothing now is not a failure recorded against its holder. Keeping a goal merely because it was written at the start of the year can make an employee work on something that matters to no one.

This is an explanation of the concept, not legal advice.