Top-Down OKRs (Cascading)

Top-Down OKRs (Cascading)

An effective goal-setting system will bring teams together around shared goals. Let’s take a deeper look at the OKR Superpower of Alignment.

Alignment happens in two ways. cascading and laddering. Cascading goals flow down from the top of an organization. Laddering goals work their way up, from bottom to top. In a well-run OKR process, roughly half of your organization’s OKRs should come from each of these baskets.

Cascading begins as soon as you communicate your top-level OKRs. In a typical cascade, a team or owner will inherit a KR and then make it one of their Objectives. Then the team will craft Key Results for that new Objective. Those KRs will have owners, too, and some of them will continue to cascade down to the deepest layers of your organization.

Though Objectives typically cascade to direct reports, they can also flow to any team in the organization. That’s why a good cascade looks more like a network, not an org chart.

OKR example: Cascading

Let’s look at an example of cascading. An educational software company has an

Objective: Provide 1:1 tutoring to every child.

They measure success with these three Key Results:

KR1: Ensure tutoring is accessible to anyone on desktop or mobile device.
KR2: The wait times for a tutor are less than 5 minutes.
KR3: It’s got to cost less than $50 for an hour session

Each of these KRs are assigned an owner. In this case – the second Key Result of reducing wait times to less than five minutes – it’s cascaded to the team that manages the tutors. They use the top-level KR as their Objective, so what we have now is:

Objective: Wait times are less than 5 minutes.

They then support this O by adding their own KRs:
KR1: Expand network of tutors from 500 to 1,500.
KR2: Majority of our tutors are active more than 3 times a week.
KR3: Tutors maintain a 4.5 star or higher ranking.

The team has picked these KRs for a few reasons. They know that when the wait time for a tutor takes longer than 5 minutes, students log out. And wait times are almost 10 minutes or more. They also know the key to reducing wait times is by having a larger network of tutors. But reducing wait times isn’t the only thing that matters. That’s why they add a quality KR for ratings. It’s important that quality stays high as they rapidly expand their tutor network.

So while the Objective is top-down, the metrics of success – the KRs – are bottom-up. That’s how cascading ensures that top-level goals are adopted throughout the organization.

With these KRs to guide their work, the tutoring team can now create action plans for recruitment and training. Notice in the example above, we followed an important rule for cascading an Objective:

Do not write a team’s Key Results for them. That’s micromanaging. Instead, work together on them. As John Doerr likes to say, “Innovation tends to dwell less at the center of an organization than at its edges. The most powerful OKRs typically stem from insights outside the C-suite.”

One classic example is Intel’s Operation Crush. In Measure What Matters, we share how they used OKRs to beat Motorola in the microprocessor market. That entire operation stemmed from a single memo.

Better yet, let’s have John tell the story.