Author:
Bruce Gil

So you’ve drafted top-level OKRs that will guide your company over the next quarter or maybe even the next year. The next step is to cascade them throughout your organization. Cascading goals from the top-down will help align the various teams and individual employees across your company toward the same overall goals.

In his book, “Measure What Matters”, John Doerr wrote, “cascading makes an operation more coherent.”

The OKR goal-setting system does more than just goal tracking, it aligns organizations from the company-wide level all the way down to individual level objectives. Without alignment, separate departments and employees can diminish the impact of their efforts by pulling in too many different directions. Cascading OKRs enables a company to maximize its performance by moving forward together.

“They channel efforts and coordination,” wrote Doerr about cascading OKRs. “They link diverse operations, lending purpose and unity to the entire organization.”

While this article focuses on top-down cascading OKRs, it’s important to note that healthy organizations should aim to strike a balance between top-down and bottom-up goals.

Typically, an emphasis on top-down OKRs is useful when an organization is in a crisis or is prioritizing very specific objectives. On the other hand, bottom-up OKRs should be used when an organization wants to encourage innovation.

Top-down OKRs provide an organization with precision and clarity to reach its most audacious goals.

In “Measure What Matters”, former Intel VP of the Microcomputer Systems Divison Bill Davidow recounted how Intel used a top-down approach to defeat an existential threat during a campaign they dubbed “Operation Crush.” In the late 1970’s Intel was facing stiff competition from Motorola who was making faster and easier-to-use microprocessors. The first person to notice the threat was a district sales manager, Don Buckout. He brought it up to management and they listened and took swift action. They created a detailed plan and cascaded their OKRs down through the company.

It only took 4 weeks to completely reboot the company’s priorities. Everyone at Intel from the engineering team to the marketing department knew what they had to do and why they were doing it. And by the end of 1980 Intel regained its spot as the market leader.

The cascading process works like this: high-level OKRs flow downwards to department heads, managers, and individual employees who take ownership of specific key results from those above them in the organization. They then decide the best way to achieve those objectives. Although cascading OKRs are driven from the top, it is vital that there is some input from below. Those closer to the trenches will have a better idea of how to make an executive’s objectives a reality.

In practice, this can look like a quarterly meeting where top-level OKRs, set by company executives, are introduced to the whole company. From there, department managers write their own OKRs based on the company’s top-level goals. They use the key results decided by the executive team as their objectives. And then members of each department write their OKRs based on their supervisor’s goals. In order to get input from below, Doerr recommends that all employees should be allowed to write their own key results.

Below is an example of how cascading OKRs may work at your company:

Cascading top-down OKR examples

Let’s say that the owner and general manager of an electric car dealership sets the following company-wide OKR:

o
Become the leading electric car dealership in the region.
kr1
Makeup 60 percent of all-electric car sales in the region.
kr2
Reach 90 percent in customer satisfaction for servicing and maintenance operations.
kr3
Increase brand visibility by 50 percent.
kr4
Research and implement customer relationship management software.
kr5
Open a second location by the end of the year.

These key results cascade down to the sales, servicing, and marketing managers and supervisors as objectives. The dealership’s sales manager takes ownership of the sales-related key result while the marketing manager takes ownership of increasing brand visibility, and so on throughout the organization. They then craft new corresponding key results and additional OKRs.

This how a sales manager might convert a key result into its own OKR:

o
Make up 60 percent of all-electric car sales in the region.
kr1
Hire 2 new sales associates.
kr2
Increase the number of cars sold by 55 percent over the last year.
kr3
Increase sales revenue by 40 percent over the last year.
kr4
Implement monthly sales promotions.
kr5
Implement quarterly training sessions for all sales associates.

In turn, the sales associates then make one of the manager’s key results into one of their individual OKRs.

o
Increase the number of cars sold by 55 percent over the last year.
kr1
Speak to at least 50 potential customers a month.
kr2
Successfully close at least 12 sales a month.

Where can I get more information?

Following the process of cascading company, OKRs will result in a more cohesive operation. Cascading OKRs makes clear to all employees what the company’s chief priorities are and gives them the power to decide how they will work toward those goals.

Doerr wrote, “cascading forges unity; it makes plain that we’re all in this together.”

If your organization requires unity, try out cascading OKRs and let us know now how it goes by emailing us here. You can also learn more about OKRs by reading “Measure What Matters” or exploring more FAQs, Resources, and Stories right here at WhatMatters.com.

Or, if you’re looking for an OKR coach, check this out.