What is Cascading Strategy?
Cascading strategy is the process in which you disseminate your organization’s overarching strategy throughout the organization and create supporting strategies throughout the entire value chain of activities in the enterprise to ensure that execution occurs.
If you are setting a business unit strategy, this is a process in which you disseminate the strategy to those who will operationalize the strategy. You should also have strategy cascading up to enable senior leaders within an organization to help them craft and capitalize on strategic opportunities or mitigate threats and manage risks.
The cascading process is meant to align every action within the organization with the strategic direction of the organization as a whole. Employing a cascading strategy throughout your organization will align executive goals with the actions of frontline leaders. Besides influencing everyday job duties, it can require modifications in a variety of areas including:
- Purpose and mission
- Core competencies and capabilities
- Asset allocation
- Resource allocation
- Organizational structures and systems
- Values and beliefs
- Talent acquisition and development
If your organization only has a few levels, it may be relatively simple to cascade your strategic objectives to frontline people. However, large organizations may need to invest more time and energy to align all teams and functions. To put it simply, a cascading strategy gets everyone on the same page and working toward the same ultimate goals.
After executives have chosen a strategic direction for the organization, they pick several objectives that will express that strategy, along with metrics and key performance indicators to measure progress.
The process of cascading your objectives enables you to break large goals into sub-objectives and distribute them to leaders and teams at the next level. They, in turn, break objectives into plans and tactics until the smallest, most actionable goals penetrate the entire organization. In short, everyone needs to know how they fit and why they matter.
Strategic leaders communicate the cascading strategy to employees and make sure their team members at all levels understand the organizational strategy and objectives they’re contributing to. Managers should be encouraged to set performance metrics, implement accountability systems, and coach to achieve strategic results.
Employees’ individual goals should directly support the organization’s strategic priorities. Employees who have a line of sight and know the organization’s strategic intentions are in a great position to contribute to the continuous transformation of the business. Engaging people in the execution of the enterprise strategy is a great way for employees to take greater ownership and pride in their work and company.
You can send out a simple strategic narrative and hold briefing sessions, then employees can craft their own goals to support the organization’s strategic plan. They’ll use their understanding of what is relevant for their roles, as well as receive feedback and guidance from their managers.
Cascading Strategy Deployment
The deployment of a cascading process consists of three phases:
1. Discovery Phase:
The discovery phase involves gathering data to understand the organization’s current situation and priorities as well as its strengths, limitations and vulnerabilities. In this phase, you will discover the importance of cascading goals in your organization.
2. Alignment Phase:
Phase two is the actual alignment meeting where members of the leadership team discuss insights from the discovery phase and pinpoint and prioritize strategic opportunities for improvement. In this phase, the strategy cascade framework is developed.
3. Execution Phase:
The third phase focuses on strategy execution, how it is sustained, how adjustments are made, and how progress is reviewed and evaluated. In this phase, you will want to focus on cascading your strategy to employees and ensuring your strategy has made it to everyone in the organization.
Three Tips To Deploying a Cascading Strategy Throughout an Organization
As you are cascading your strategy, you’ll need to make three important decisions to improve the process:
1. Distinguish Between Direct Alignment and Indirect Alignment
Direct alignment is expressed by objectives that every team and individual will work toward in approximately the same way. For example, if you were to choose a revenue goal, each business unit would be responsible for a portion of that goal.
Indirect alignment is seen in objectives that different business units may contribute to in very unique ways. If you wanted to reduce corporate waste, for example, each group would formulate a customized plan of action to contribute in their own unique way, based on the resources and expertise within their control.
2. Define How Cascading Strategy Decisions Are Made
Define the body of senior leaders who will make decisions about strategy and how the deployment and cascading strategy process will unfold, and communicate it to your team. You’ll want senior executives to make decisions based on the strategy cascade framework and prioritize the future direction for the enterprise, then encourage frontline leaders and their teams to create their own unique plans.
3. Address Outlying Goals
Set up a policy to address goals that don’t seem to align with the enterprise strategy. The policy should allow unusual goals for groups that need them, such as a Mergers and Acquisitions department. But keep in mind that you can’t be all things to all people. Strategy is about choices and staying focused. Sometimes leaders have to say “no” to good ideas that simply don’t fit at this point in time.