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Earlier businesses were organized for efficiency and control. They had a top-down hierarchy, bureaucracy and were trained to do planned and repetitive tasks. There were instructions, fixed working hours, conditions, and workplaces. It was a siloed hierarchical structure with top-down control-based leadership. Here instructions, announcements, and goals were cascaded in a top-down fashion, and rightly said, it made sense!
But organizations of today are all about innovation and speed. They have agile business goals, and people are the owners of their work! Decision-making is quick and flexible, and teams are empowered to take on more accountability. The teams are flat, with flexible working hours and workplaces. Information and work ebb and flow in a collaborative way. Yet goals alone are cascaded like in the organizations of yesterday. Why?
How are goals cascaded?
After goals are set, the time has come to drizzle them down. The typical way that leaders often think of goal cascades is as follows:
- The leadership determines its purpose, vision, intent, and strategy
- This is communicated to all the managers and function leaders.
- The managers and function leaders interpret the goals according to their functional context and then cascade it further to the next well.
- This trend continues until everyone in the organization sets their goals in their local context.
Cascading looks excellent, linear, and confusion-free on paper. It's clearly the best way if all your functions work like the above image. This is also why goal frameworks and setting goals fail most. Cascading goals don’t create coherence. Most often than not, the senior leaders don’t have knowledge or reasoning on how the goals have been translated and worked upon. This way, every individual’s goal in an organization should come from themselves and not from the organization's top.
This is why many goal frameworks fail and goals fall through the cracks. Organizations work in a cross-functional manner; every function is inter and intra-dependent on one another.
Top-Down Goal Setting leaves little to no time for goal actioning
Top-down goal setting is an administrative burden. A central process owner will manage the percolation of goals throughout the organization, step-by-step. By the time your goals reach the bottom, it would’ve taken three whole months! This means by the time you set and freeze your goals throughout the organization - you will have only 8 to 9 months to act on them.
In today’s day and age, where changes happen as we blink, your previously set goals can become obsolete as you encounter external changes like recession, pandemic, quiet quitting, etc.
Top-down goal cascades take time to get to the last mile of goal-setting
In the book team of teams, Stanley McChrystal, a former US General, dives into the US army’s confrontation with Al Qaeda in Iraq. Al-Qaeda in Iraq was a foreign enemy, their men were brutal and poorly trained, if we compared them with the brains, rigor, technology, and weaponry of the US army, they would fail on paper. But surprisingly, they were one of the most challenging enemies on the battlefield. The Al Qaeda unit acted as a flexible network, which was impossible to fight with using the weaponry of a traditional organization.
“Although lavishly resourced and exquisitely trained, we found ourselves losing to an enemy that, by traditional calculus, we should have dominated.” - Gen. Stanley McChrystal et al., Team of Teams, page 2
The reality is that Al Qaeda had cross-functional pods that would track the US army's movement. They didn’t have a hierarchy or process, whenever there was information, any one part of the group could feed it to the central decision-maker. Their way of functioning was so collaborative that even when their top men were arrested or eliminated, they could resurge. They neither had a standard modus operandi nor a standard hierarchical structure. In Al-Qaeda, information ebbed and flowed across the network, making them unanimous and the most difficult and dangerous enemy the US would see on the battlefield.
Even though the US army was well-trained, they were traditional, and messages and instructions were passed hierarchically. This made decision-making slow for them compared to their enemy. The US army had to change their strategy and make quicker decisions on the battlefield to win over this enemy in Iraq.
The more you cascade goals top-down, they’re no longer goals
As we scale goals top-down, be it anywhere - the army or organization, it takes time, and by the time it reaches the bottom, it’s more of BAU goals. BAU goals are nowhere motivating nor aspirational.
Organizations are cross-functional, but goal cascades are symmetrical
Organizations work collaboratively. Here’s what work looks like in your team’s day-to-day life.
How do Spotify and Novartis do goal setting right?
This particular way in which Spotify works is called the Spotify model and is being adapted in leading global organizations. It focuses on organizing people around goals rather than cascading them top-down. The model is a people-driven autonomous approach for scaling goals across the organization. In traditional scaling frameworks, specific practices like daily standups are implemented, but the Spotify model focuses on how businesses can structure an organization to enable agility. Not just organizations of the world, top-down cascading doesn’t work even in wars!
Not just Shopify, the pharmaceutical giant Novartis works as an unbossed company. They set their own goals within teams and start scaling. Novartis CEO Vas Narasimhan, in his conversation, mentioned that innovation should come from the bottom and by giving people responsibility. To scale and keep up, Novartis no longer requires its people to wait for the top-down chain of command, approvals, or responsibility to stay competitive.
The top-down method of cascading goals takes 8-9 months to decide and implement. This is one of the major reasons why Spotify ditched its individual-level OKR and goal-setting processes - it didn’t set them up for success but slowed operations.
Then, they started creating their own goals, where everyone was given context and priorities. The team aligned themselves in parallel and started planning events in synchronization. This helped the individuals focus on making the business work rather than on how to make the OKR process work.
Businesses of today should be agile and quick. We’ve seen wars, natural disasters, and a pandemic, and we’re currently amid an economic downturn - all happening within two years! The rate of change experienced by a business today is 5-6 months vs. a business back in the 2000s, where it was 5-10 years. If you’re implementing processes and structures for 7-8 months and taking another year to roll them down to your teams, you’ll be left behind. Teams with clarity adapt to changes quickly.
There is no one size fits all for functions in terms of goal cascades
Not every team and function can contribute to a goal uniformly. Some contribute more, and some less. For example, if you’re cascading a goal where the aim is to have a higher brand recall, then your marketing team might have to toil more, other teams, not so much. Even if your marketing team actioning on the goal might be creating campaign after campaign, you might not see prospects or conversions lining up - they’re bound to drop somewhere along the way.
When goals cascade, optimal action never comes by aligning them top-down. They lose context. If we take the same example and allow your teams to design their own goals, then,
- Your success team will need to provide a smooth support experience making customers your ambassadors
- Your sales team will need to work on streamlining the sales process helping prospects in their buying journey, and working with marketing to create targeted campaigns.
- Marketing teams need to create unique campaigns, content, and collateral that catches the prospects' eye
- Product design and engineering teams must create a frictionless UX and UI and add features others might not have.
- Finance teams need to enable functions by sorting out budgeting and invoicing
- People teams need to ensure everyone is aligned and actioning on their individual goals and provide all teams with a streamlined work experience, weeding out any hiccups faced.
Do you see how setting goals this way enables every team to work on what’s important while at the same time aligning their work to other functions? Teams should be enabled to set their own goals in parallel and align it with the master goal. All teams now get the opportunity to make it relevant to their context and start collaborating with other functions to ensure the goal is achieved.
Goals can be drivers of employee retention
Setting goals for your employees isn’t just about meeting the organization’s aspirations. It also directly impacts how your people feel valued in their job. Nobody likes working on 100 different tasks with no proper end objective.
A Harvard study rightly points this out. Employees stay or leave due to two main reasons - job satisfaction and the company environment. Their work ethic strengthens an employee’s inertia with the company’s. A widening gap makes an employee churn, whereas a narrowing one strengthens the relationship. The key reasons for job satisfaction are achievements, recognition, responsibility, growth, and motivation.
But if you’re taking months to drive clarity to your employees regarding goals, they will get frustrated and feel undervalued.
Goals should be cross-functional!
Just like how functions work together, our goals should also work together. When we cascade goals, another common hiccup is that an employee’s unique and important goal may be omitted if it’s not linked to their manager’s goal.
A persistent shared model is a way forward while setting up goals. As persistent models enable parallel planning.
As your organization grows, your goals don’t change; it’s the
- Delivery and
- Key results
To help in parallel goal setting, managers and leaders need to synchronize with their teams regularly to eliminate any drifts from individual goals.
“The very business of getting an organization made up of individuals, no matter how disciplined, to pursue a collective goal produces friction just as surely as applying the brakes of a car.”
- Stephen Bungay, The Art of Action
All the goals set need to have cadences where constant check-ins happen. Annual and quarterly planning should be more about goal synchronization, effectively weeding and optimizing for any hiccups encountered. This ensures that all team goals propel the organization’s larger goal forward.
In the beginning, we saw how Al-Qaeda formed a network decoupling each individual from the hierarchical model. At an organizational level, we should be doing the same too. We need to decouple setting goals from the hierarchical model. Goals should be a network, and leaders should aim to achieve the network model while setting them.
Goal cascades reinforce the idea of input vs. output from teams. It isn’t that. Your organization is a cluster of overlapping relationships and dependencies, if work happens cross-functionally, then why can’t goals be relevant in the same way?