Wondering if your company is OKR ready?
Why Fixed And Cascading Objectives Limit Team Performance?
Organizations have been following a top-down management approach for a long-time. They give direct commands or goals that flow down the organization through a fixed team structure. It takes time, and there is little scope for agility in the organization. Today, businesses must be flexible and quickly respond to market forces.
About 45% of businesses plan to restructure their organizations to support collaboration.
There is a better way to manage goals and people in a business. When the OKR framework was introduced to young Google founders Larry and Sergey, they were excited about how it could help them grow Google effectively and collectively as a unified team.
OKRs allow you to be agile as an organization with the help of goals that connect everyone to the business-aligned top-level objectives. This means people collaborate more and know how to work to achieve organizational objectives.
What do the top-down cascading goals look like?
In top-down goal setting, high-level goals are set at the top of an organization and then broken down into smaller, specific goals assigned to lower-level employees. The idea is that the high-level goals are “cascaded” down through the organization, with each level of the organization taking on its own specific goals that contribute to the overall achievement of the high-level goals.
This approach to goal setting can effectively ensure that all levels of the organization are working towards common goals and that everyone understands how their work contributes to the organization’s overall objectives.
However, it can also be limiting, as it may not consider the perspectives and ideas of lower-level employees and may not allow for flexibility in achieving the goals. Employees cannot change their ways of working by aligning with the top-level and team-level objectives.
Some organizations are adopting more collaborative approaches to goal setting that involve input from employees at all levels of the organization.
Why are top-down goals limiting, and a bottom-up approach better?
Public and highly-aligned goals are more likely to be achieved by people. The OKR framework aids you in linking the daily work of your employees with critical organizational objectives. You need to be careful and discuss well with all the leaders in your company while developing the OKRs for the company and teams.
To be agile
Being agile means pivoting and changing your plan according to the changing dynamics of business. A lot of companies suffer or just die in the process of significant changes in the markets. They fail to do better prioritization and execute the business strategy effectively. Purely top-down cascaded goals are slow to implement.
A fixed set of goals are limiting for the team. Frontline employees are the ones that do the routine work. They know their work better than the leaders. You must consider the opinions of the employees for setting team-level OKRs. Include them in the team meetings to brainstorm and discuss KRs that are highly relevant and aligned with organizational objectives. Doing this will help you create effective goals for everyone faster.
When you’re told to do what your manager says, you lose the independence to take risks and try new ideas to execute solutions. Vertically flowing goals are not effective today as our surroundings and markets become more unpredictable. You have to be creative in your planning and execution to counter the negative forces affecting your business.
You must empower employees at all levels to make decisions and take ownership of their work. Encourage employees to take calculated risks and try new approaches, and provide a safe environment for them to do so. Moreover, when you let your employees align with the top-level objectives by allowing them to decide some of their KRs, it helps to foster a sense of ownership and accountability.
To facilitate cross-functional alignment and collaboration
When you specify the employees’ work, they do not take the initiatives to reach out to other departments and solve a common business or team-level problem.
You must ensure that team members understand the goals and objectives of the project and how their work fits into the bigger picture. This can be done by inviting them to develop their KRs and understand their job roles better by aligning with the business-level objectives.
Embrace practices that encourage team members to work together, support each other, and recognize and reward team efforts.
To get more input from frontline people
Your employees are the ones that keep the engine of the business running. You must ask your frontline workers for their ideas; they have some valuable insights for the company. For example, your sales team members are the first to know about changing customer behavior.
You shut down the flow of employee ideas and suggestions when you set rigid goals for them. Apart from creating a culture of open communication, you must ensure that you involve employees in some decision-making processes and encourage them to contribute their ideas and perspectives. Invite them to team-level goal-setting meetings and consider their suggestions to build impactful OKRs for the team and organization.
To execute in a flexible manner
The top-down way of assigning goals limits the flexibility among the team. You take a lot of time to create cascading goals. It hurts the business when you need to change your strategy mid-year or quarter based on your goal-setting cycle.
When you take the bottom-up approach to establish and implementing OKRs, you boost accountability and alignment among your team. People feel a sense of ownership for their KRs and do the needful to plan and execute accordingly.
The OKR framework can boost your team’s performance and engagement. If you are new to this framework, take the help of OKR strategists and experts.
We have the experience to help startups and companies establish their OKRs for the first time and guide them in the execution plan.
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1. Can OKRs work effectively with fixed and top-down goals management?
You may want to continue using top-down goals-setting, but business changes with time. It’s better to embrace the change and be flexible and agile in your approach. Fixed and cascading goals limit flexibility, but OKRs are flexible.
2. What should be the ratio of top-down to bottom-up created OKRs?
There’s no standard formula for this. You have to analyze your business situation and discuss it with the team. Do what’s best for your team and the organization. Ideally, you must allow your people to create some bottom-up OKRs. For further guidance, ask our experts.