How to Cascade OKRs for Better Team Alignment and Performance?

Ever feel like your team’s goals are scattered and not in sync with the bigger picture? Many businesses struggle to cascade overall business strategy with individual and team OKRs.

This disconnect can lead to wasted effort, missed opportunities, and, ultimately, burnout.

But a proper OKR cascading framework, involving your team in the process, and following proven okr best practices can ensure everyone is rowing in the same direction.

This blog will delve into the tested steps and strategies that successful OKR-using companies recommend. We’ll guide you through the cascading process, tips, and a case study to effectively align your team and individual goals with the top-level objectives.

What is OKR cascading?

OKR cascading means breaking down company goals (OKRs) into smaller, achievable goals for departments and individuals with a rigid alignment. This ensures everyone in the organization understands how their work contributes to the bigger picture and keeps everyone working towards the same objectives.

Think of OKR cascading as a three-step journey. First, set clear company-wide OKRs, outlining the “why” behind your direction. Next, facilitate discussions where departments and teams translate these goals into their own, ensuring everyone is aligned.

Finally, empower individuals to write OKRs, directly contributing to the bigger picture. And remember, communication is key. Share OKRs openly, track progress regularly, and celebrate achievements together.

Can I see an example of OKR cascading?

The essence of OKR cascading is about aligning everyone’s efforts toward common goals. Let’s understand this with an example of OKR cascading. 

Let’s say you work at a company called TechSolutions (hypothetical), which focuses on creating new and innovative software products. The senior leadership team has set one of the company goals as “Improving Product Quality” for the next quarter.

Now, let’s see how this goal is broken down and applied to different departments and teams within the company. 

Firstly, in the Product Development department, the department head sets a specific target of “Reducing the number of reported bugs by 30% by the end of the quarter.”  This target directly supports the main goal of enhancing product quality. 

To achieve this, the product development team might implement stricter code review processes, conduct more thorough testing before releasing new features, and allocate more resources to fixing bugs. 

Next, the manager in the Customer Support department targets “Increasing customer satisfaction ratings from 4.2 to 4.5 out of 5 by the end of the quarter.” This target aligns with the main goal by focusing on improving the quality of customer interactions and effectively resolving issues. 

To achieve this, the customer support team might invest in additional training for support agents, streamline their process for resolving customer tickets, and gather customer feedback to identify improvement areas. 

The director in the Sales and Marketing departments targets “Boosting customer retention rate by 20% by the end of the quarter.” This target enhances product quality by ensuring customers are satisfied with their experience and are more likely to continue using TechSolutions’ products. 

To achieve this, the sales and marketing team might focus on building stronger relationships with existing customers, providing personalized support, and showcasing the value of TechSolutions’ products through targeted marketing campaigns. 

Moving on to the Engineering department, the team lead targets “Implementing automated testing for all major features released during the quarter.” This target aims to improve product quality by ensuring all major features undergo thorough automated testing. 

This can help identify and fix potential issues before the features are released to customers.

Eventually, the team members in each department discuss and cascade the department or team-level goals to the individual level.

How do we effectively cascade OKRs in our organization? (Steps)

Think of OKR cascading as connecting the dots between your big-picture goals and the everyday tasks you tackle. It’s about ensuring everyone knows their role in achieving success. Let’s dive in and explore the main steps.

Step 1 – Start with the top-level OKRs

Your leadership team sets the tone by establishing ambitious company-wide objectives that align with your organization’s vision and strategic priorities. These top-level OKRs serve as the guiding light for the entire organization, providing clarity and direction for each team and department. 

From there, it’s all about the strict cascading of OKRs down the hierarchy, ensuring that every level of the organization is aligned and working towards the same overarching goals. 

Think of it like building a strong foundation – if your top-level OKRs are solid and well-defined, it sets the stage for success as you cascade them down to individual teams and employees. By driving OKRs from the top, you create a clear line of sight from leadership to frontline employees, fostering alignment, accountability, and, ultimately, driving results.

For instance, you’re leading a team at a tech company, and your goal is to increase user engagement with your product. You set an OKR to improve the number of active users by 20% in the next quarter. 

Now, to effectively cascade this OKR to your team members, you need a streamlined process that ensures everyone is aligned and working towards the same goal. Here’s where OKR software comes in handy.

With the right software, you can easily input your OKRs, align them with cascading key results, and assign them to specific team members. This ensures clear ownership and accountability for each OKR, keeping everyone focused on their contributions to the overarching goal.

Step 2 – Cascade with purpose

It’s not just about translating company objectives into team goals; it’s about enabling a deep understanding of how each team’s efforts contribute to the company’s overall success. By ensuring clear links between team and company-level OKRs, you create a framework that guides decision-making and prioritization at every level. 

This approach empowers teams to set their relevant objectives that directly support the company’s mission, driving engagement and ownership of the strategic goals. Additionally, it promotes a culture of collaboration and shared responsibility, where everyone feels invested in the collective success of the organization. 

So, when cascading OKRs, remember to cascade with purpose and watch your teams rally behind common objectives, propelling your organization toward greater success.

For instance, you’re part of a marketing team at a retail company, and the company’s top-level objective for the quarter is to increase overall revenue by 15%. Now, to cascade this objective effectively, your team needs to translate it into relevant objectives that align with the company’s goal.

So, your team might set an objective to “Boost online sales by 20% through targeted digital marketing campaigns.” This objective directly supports the company’s goal of increasing revenue. 

To ensure clear links between team and company-level OKRs, you’ll need to establish key results that measure the success of your objective, such as increasing website traffic, improving conversion rates, and growing the customer base.

Step 3 – Mind the number of OKRs

Research and organizational experience suggest that limiting objectives to 3 to 5 per team allows for better prioritization and concentration of efforts.  This focused approach enables teams to direct their energy toward the most critical initiatives, increasing the likelihood of success. 

Similarly, setting 3 to 5 key results per objective ensures that teams have a manageable set of metrics to track progress and measure success. 

For example, your team could have objectives like “Expand customer base by 15% in target markets,” “Increase upsell and cross-sell opportunities by 10%,” and “Improve customer retention rate by reducing churn by 20%.”

By limiting the number of objectives, you ensure that your team stays focused on the most critical priorities. Additionally, setting only up to five key results per objective helps provide clarity and accountability. 

For instance, KRs for the objective of expanding the customer base could include metrics such as acquiring a certain number of new clients, increasing demo requests, and improving conversion rates.

Step 4 – Create individual OKRs

By incorporating some bottom-up inputs into this strict cascading OKR process, you unlock a wealth of insights and perspectives from your team members. This collaborative approach not only develops a sense of ownership and accountability but also ensures that OKRs are grounded in the realities of day-to-day operations. 

Team members, being closest to the front lines, offer invaluable insights into what’s working well and where improvements can be made. By actively soliciting their input, you tap into a rich reservoir of knowledge and experience, empowering your team to drive meaningful progress and innovation. 

This inclusive approach to OKR cascading not only strengthens team cohesion but also enhances alignment with organizational goals, ultimately leading to more impactful outcomes.

For example, you’re leading a product development team to improve user satisfaction for your company’s mobile app. As the manager, you initiate the process of cascading OKRs by setting the overarching objective of “Enhancing User Experience” for your team. 

Now, to create individual OKRs that align with this objective, it’s essential to involve your team members. You gather your team for a brainstorming session and encourage them to share their insights and suggestions based on their experiences and expertise. 

Through this collaborative approach, your team members propose specific OKRs such as “Increase app rating from 4.2 to 4.5 on app stores within three months,” “Reduce app crashes by 20% through improved code quality and testing procedures,” and “Implement user-requested features based on feedback analysis.”

Step 5 – Keep the whole goal-setting transparent

You see, sharing OKRs across the organization is the first step. By making them visible to everyone, you create alignment and ensure everyone is working towards the same objectives. 

This transparency also fosters accountability because when everyone knows what’s expected of them, it’s easier to track progress and hold individuals and teams accountable.

Establishing clear ownership of OKRs is equally important. Each OKR should have a designated owner who is responsible for driving progress and ensuring that the objectives are met. This ownership provides clarity, helping to avoid confusion and ensure that goals are achieved efficiently.

Now, creating a platform for open discussion and collaboration on OKRs takes transparency to the next level. You create a culture of innovation and continuous improvement by encouraging open dialogue and collaboration. 

Team members can share ideas, provide feedback, and collaborate on solutions to achieve OKRs more effectively. 

For example, you’re leading a marketing team tasked with increasing brand visibility and customer engagement for your company’s new product launch. As the manager, you kickstart the OKR cascading process by setting the top-level objective of “Driving Successful Product Launch” for your team.

To ensure transparency, you share this objective with the entire organization during a company-wide meeting or through a centralized communication platform. By doing so, you establish alignment and ensure everyone understands the overarching goal.

Next, you establish clear ownership of OKRs by assigning specific responsibilities to team members based on their expertise and strengths.

For instance, you designate one team member to focus on social media engagement, another to lead content creation, and another to oversee email marketing campaigns.

To promote efficient collaboration on OKRs, schedule regular team meetings where they can share progress updates, discuss challenges, and brainstorm ideas for achieving the objectives. Additionally, you create a dedicated space on your OKR platform where team members can post updates, share resources, and ask questions about OKRs.

Step 6 – Reflect on your goal-setting and learn

In today’s dynamic business environment, things can change rapidly. If external factors or internal priorities shift, reassess your OKRs and make necessary adjustments to keep them relevant and achievable. 

Take time at regular intervals to review progress, identify any bottlenecks, and assess whether OKRs are driving the desired outcomes. Gather feedback from key stakeholders, analyze performance data, and find improvement areas. 

Seeking feedback from teams and individuals involved in the OKR process is essential. Encourage open communication about what’s working well and what could be improved. 

This feedback provides valuable insights into the effectiveness of your OKR program and helps you make informed decisions for future cycles. Use feedback and insights to refine your approach, streamline processes, and enhance overall effectiveness. 

By embracing a culture of reflection, learning, and adaptation, you can ensure that your OKRs drive meaningful results and contribute to the ongoing success of your organization.

Can you give us some tips to cascade OKRs effectively?

Here are some straightforward tips to make OKR cascading more impactful for your team.

1. Use OKR software to streamline execution

It can provide a centralized platform for setting, tracking, and managing OKRs across teams and departments.  OKR software automates many aspects of the OKR process, such as setting reminders, tracking progress, and generating reports, saving time and effort for both managers and team members.

2. Invest in team training 

It ensures that team members understand the principles and practices of OKR methodology. Training sessions can cover topics such as setting SMART objectives, crafting meaningful key results, and aligning OKRs with organizational priorities. 

3. Don’t make OKR cascading totally rigid

Too much rigidity can stifle creativity and innovation within teams. Instead, allow some flexibility for teams to adapt their OKRs based on changing circumstances or new insights. This flexibility encourages ownership and engagement, leading to more meaningful progress toward organizational goals. 

4. Recognize and reward your people

Celebrating achievements and milestones along the way reinforces the importance of goal-setting and encourages teams to maintain their focus and momentum. This can be formal recognition programs, team celebrations, or even a simple word of appreciation from leadership. 

5. Adapt to changing conditions

While it’s important to set clear OKRs at the outset, teams must remain flexible and responsive to evolving circumstances. This may involve revisiting and adjusting OKRs as needed throughout the cycle, reallocating resources, or even pivoting to entirely new objectives in response to external factors. 

6. Focus on quality over quantity

Instead of overwhelming teams with many objectives, it’s better to identify a few key priorities that will have the most significant impact on organizational success. By narrowing the focus and setting clear, achievable objectives, teams can channel their efforts and resources more effectively, leading to better outcomes in the long run.

Case study – Using OKR cascading to achieve ambitious goals

This case study will help you understand how a not-for-profit organization used OKR cascading to align its team toward the most important success metrics. We took this story from whatmatters.com

Many low-income Americans have to physically go to places to register for government services like housing assistance, enroll in health insurance, and clear criminal records. These essential services often involve long wait times and complicated bureaucratic processes.

Code for America is a nonprofit organization that brings together technologists and advocates with local and state governments to improve access to government services for everyone.

Goals and Challenges of the Company

Code for America is dedicated to finding innovative solutions to government problems caused by outdated technology, poor user experiences, and siloed data. Their goal is to show that the government can operate efficiently and effectively.

In 2016, Clear My Record connected applicants with public defenders in over twelve California counties. However, many eligible individuals overwhelmed the existing “clean slate” initiatives, motivating Code for America to develop a new version the following year. 

This updated prototype allows applicants to represent themselves without a lawyer. In 2018, it successfully demonstrated its automation technology and expanded it to reach a wider audience.

How did ‘Code of America’ use OKR Cascading to Succeed?

Utilizing OKR cascading, they established board-level goals that aligned with team goals and implemented quarterly benchmarks to enhance the impact of each iteration. Clear My Record aimed to clear 250,000 convictions in 2019. 

The Code for America broke down this ambitious goal into smaller targets while keeping the focus on their North Star Metric of “clearing all eligible records.” But the success lies in setting up a series of small, achievable goals related to the north metric: increasing the number of convictions cleared, enhancing technology to automate additional record clearance processes, and finding new partners for automated record clearance.

The utilization of OKRs enabled ongoing strategy discussions, enabling the company to implement this strategy effectively across various teams, such as marketing, finance, and outreach. With such OKR alignment, for instance, they achieved an average of 350 applications per week over four weeks by the conclusion of a specific quarter.

It is important to note that goals frequently change legislation and technology progress. Fortunately, the organization successfully capitalized on political momentum while creating Clear My Record and utilizing OKRs to shift away from its initial hypothesis.

Since 2009, Code for America has been able to make significant changes to a system that was once considered irreparable. This was made possible through a series of ambitious yet attainable OKRs, which have allowed the team to bring attention to what truly matters.

Why do OKR experts suggest a balance between OKR cascading and bottom-up alignment?

A completely rigid OKR cascading in your organization can hinder your team’s creativity and motivation to work toward their cascaded respective OKRs. Let’s understand how, by creating a balance between cascading and bottom-up goals, you can help your team perform better.

Why does OKR cascading may not work for many teams?

Picture this, you’ve got your big goals coming from the top, and they’re supposed to trickle down smoothly to your team. Sounds good, right? 

But sometimes, it just doesn’t quite work out that way. One big shortcoming is that those goals might lose their meaning or relevance as they pass down the chain. 

If your team doesn’t fully understand or buy into those goals, it can lead to confusion and a lack of motivation. Another challenge is that the OKR cascade process can be slow and rigid, making it tough to adapt to changes or new insights along the way.

So, while the OKR cascade can be a useful tool, it’s important to be aware of these shortcomings and find ways to overcome them. 

Which organizations can benefit from cascading?

Let us understand with an example. Your team’s got some big goals set by the higher-ups, and they are cascading down smoothly to everyone.

Well, there are specific conditions where this approach might actually work better than a bottom-up one. For instance, if your organization has a clear vision and strategy set by senior leadership, cascading can help ensure everyone’s on the same page and working towards the same goals. 

Plus, if your team’s tasks and responsibilities align with those higher-level objectives, cascading can help keep everyone focused and moving in the right direction. So, while a bottom-up approach has its perks, there are times when OKR cascading might be the way to go. 

Why a mix of OKR cascading and a bottom-down approach can be the best goal-setting?

When goals come from the top down, it helps keep everyone aligned with the organization’s overall vision and strategy. It’s like setting the North Star that guides everyone’s efforts in the right direction. 

But here’s where it gets interesting: when you also allow for bottom-up input, it empowers teams to contribute their ideas and insights. This can lead to more innovative solutions and a stronger sense of ownership over the goals. 

Plus, it ensures that goals aren’t just handed down from above without considering what’s actually feasible and meaningful for the teams on the ground. For example, let’s say your company’s top goal is to improve customer satisfaction. 

With a top-down approach, senior leadership might set a key result to increase customer ratings by 10%. However, with a bottom-up approach, teams could provide input on specific initiatives they believe will have the biggest impact, like implementing a new feedback system or enhancing customer support resources. 

So, by combining top-down direction with bottom-up input, you create a powerful synergy that drives success for the whole organization.

So, how do we balance OKR cascading and bottom-up alignment

It’s all about finding that perfect harmony between top-down goals and input from your team. Here, you’ll explore some simple steps to help you strike that balance.

1. Start with clear top-level objectives: Ensure that your organization’s overall goals are well-defined and communicated to everyone.
2. Encourage bottom-up input: Invite teams and individuals to share ideas and insights when setting OKRs. This helps ensure that goals are relevant and achievable at every level.
3. Align objectives with organizational priorities: Make sure that each team’s objectives directly support the overarching goals of the organization.
4. Encourage open communication: Create a culture of transparency and collaboration where teams feel comfortable sharing feedback and discussing their OKRs.
5. Regularly review and adjust: Schedule regular check-ins to review progress on OKRs and make any necessary adjustments based on changing circumstances or new insights.

Conclusion

By now, you’ve hopefully gained valuable insights into OKR cascading and its potential to streamline your team’s efforts toward achieving shared goals. Remember, in most cases, cascading should not be a top-down exercise but a collaborative journey where every voice is heard and valued.

It’s about transparency, encouraging participation, and celebrating progress. Encourage your team to contribute their unique perspectives, adapt as needed throughout the cycle, and celebrate successes.

Now, get ready to implement these effective strategies and witness the benefits of OKR cascading for your teams. And if you need help cascading OKRs, you can take the help of our OKR consultants (it’s our expertise!)

Frequently asked questions

1. How can we ensure transparency and buy-in from all levels of the organization during OKR cascading?

It requires clear communication, open feedback channels, and celebrating successes. Regularly share company OKRs, explain the “why” behind them, and involve all levels in discussions. Encourage open communication and actively listen to feedback throughout the process. Finally, highlight and celebrate achievements at all levels to promote a sense of ownership and engagement.

2. How can I ensure my team understands how their OKRs contribute to the team’s goals during cascading?

Facilitating interactive workshops, utilizing visualizations, and scheduling regular check-ins can help here. During workshops, discuss top-level OKRs and collaboratively develop team OKRs that directly contribute. Utilize visuals like mind maps to illustrate the connections between individual, team, and company OKRs. Finally, schedule regular team OKR meetings to discuss progress, address roadblocks, and ensure everyone remains aligned.

3. How can we prevent OKR cascading from becoming a bureaucratic exercise and ensure it drives real results for the business?

Focus on quality over quantity, streamline processes, and conduct regular reviews. Prioritize a few ambitious yet achievable OKRs instead of a long list of generic ones. Utilize digital tools and avoid unnecessary administrative burdens. Finally, regular assessments will be conducted to evaluate the effectiveness of the OKR system and identify areas for simplification.

4. What steps can we take to prevent OKR cascading from becoming a rigid, top-down process that stifles creativity?

Encourage bottom-up input, adaptability, and a focus on outcomes, not methods. Allow teams to suggest adjustments to top-down OKRs based on their expertise. Be flexible and allow for adjustments to OKRs throughout the cycle as circumstances change. Finally, focus on achieving desired outcomes instead of micromanaging specific team procedures.

5. How much control will I have over my OKRs in cascading?

Ideally, you should have a collaborative setting with employee and manager input. But in certain situations, like a very focused and critical company mission, the OKR cascading should be pretty rigid with less control.

6. What is the difference between cascading and aligned OKRs?

Cascading is a top-down approach that directly breaks down company objectives into smaller, more specific objectives for departments and individuals. Aligned OKRs are set independently for individuals and teams but align with the broader company vision and objectives, emphasizing collaboration and shared purpose. Successful OKR implementation often requires a blend of both approaches.