Cascading vs. aligning OKRs: best approach and examples

A common question we get during onboarding calls is how to cascade OKRs, and our answer is always the same: don't do it.

And we're not the only ones saying that. It's an opinion shared by OKRs experts like Christina Wodtke or Felipe Castro. This post will show why cascading OKRs is dangerous, and how a simple change can make the whole thing easier.

(PS: if you're looking for a tool that makes OKR aligment 10x easier, we have something for you!)

First: what do we call cascading?

Many people have read the book Measure What Matters which had an appealing OKRs example. In a cascading model, the Key Results flow downwards to become the new Objectives of the level below.

Here's what your top-level OKRs might look like 👇

Objective: Launch our offer in the European market

• KR1: 30% of new sales come from Europe
• KR2: 50% of our press coverage is from EU publications

Now that you have your top plan, you can turn to your Sales and PR teams to trickle down the key results. KRs become the new Objectives, which ensures continuity in the OKRs plans.

The Sales OKRs become 👇

Objective: 30% of new sales come from Europe

• KR1: Recruit 3 sales associates in Europe
• KR2: 50% of new SQLs are in the European region

And the PR OKRs become 👇

Objective: 50% of our press coverage is from EU publications

• KR1: Secure 12 press articles in Europe
• KR2: Increase EU influencers from 20% to 50%

We end up with a beautiful chart that makes a lot of sense when you look at it. Each sub-level team has clear goals that contribute to the parent OKRs. This is where the appeal for cascading comes from.

The issue is that this model needs a certain kind of organization to work:

• Top-down management style
• Waterfall execution

The cascading example in the book Measure What Matters was about Intel in the 70s. Many things have changed since then. Orgs are now embracing a more flexible approach to management with smaller teams that have more ownership.

If you want to have empowered teams, cascading OKRs will hurt, rather than help, your culture.

Why cascading OKRs fails

There are 3 main reasons why a cascading model doesn't work in agile markets:

• It assumes your strategy is perfect.
• It's expensive and slow to move.
• It leaves many teams on the sideline.

It assumes your strategy is perfect

Let's take our example above. The top company Objective is to have a presence in Europe, and one of the KR is to get more press coverage. But, what if getting press was useless? In a cascading model, it would mean that every single OKRs trickling down below would be wrong.

In the real world, it's really hard to get strategy right, and even if it's right today, there's a significant chance that it will have to be amended in a few weeks (see Covid). A strict cascading of OKRs introduces a lot of risks due to the waterfall nature of the goals.

It may work for simplistic situations, but it's unlikely to scale as every change in the KRs means having to rebuild the entire OKRs tree.

It's expensive and slow to move

Cascading OKRs means that teams at a level N can only write their OKRs if OKRs at the level N-1 are written. That means a lot of waiting around.

And, once again, it means having to rebuild the entire OKRs tree if one of the top-level Key Results is changed (this will happen, trust me).

It leaves many teams on the sideline

Support or Design teams will have a hard time using a sales target or press coverage ratio as an Objective. But, they'll need to attach themselves to something to cascade their OKRs. In practice, this means that either

• teams shoehorn their goals in questionable ways, or
• leadership adds more OKRs at the top.

You either lose clarity or lose focus.

I'm urging teams to abandon the cascading model. But, that does not mean that you have to give up on alignment.

How to align teams instead

The difference between cascading and aligning OKRs is subtle, but it will have a huge impact. Cascading teams try to connect everything to a parent KR. Aligning teams simply need to respect the intent of the parent OKRs.

If we go back to our European expansion use case, it's pretty clear that the intent is to make a dent in the European market. The KRs are here to give a sense of scale, but tackling a new market does not stop at press and sales meetings. It may require product changes to support locales and different languages. It may involve some compliance work, or even building a new data center in Europe.

So, what should we do for teams that can directly link to the top-level Key Results?

We don't have to set a top-level KR for each of the functions in the organization. We can simply ask people to create their own OKRs, while respecting the intent of the top-level plan (which is why it's important to have clear Objectives!).

Some teams may choose to re-use the top-level Key Results as their Objectives, and that's okay! But other teams may decide to amend their OKRs for clarity, and that's also good.

A real-life version of the diagram above would look like this screenshot take from Tability. Each team has their own plan, and you can read the different OKRs to see where they align and where things need to be adjusted.

Here are a few tips to help with alignment:

• Top-level OKRs act as the company North Star: team aligns with the top-level OKRs first, and their N+1 OKRs second.
• Objectives before Key Results: it's more important to understand why you're tracking a specific Key Result, than to obsess about the exact target value.
• Re-use Objectives if possible: a simple trick to keep teams aligned is to have the same Objectives and different KRs depending on the team.
• Empower your teams: Teams shouldn't have to wait for their N+1 OKRs to start on their plans. They can adjust their focus later, but goal-setting can start once the top-level OKRs are defined.

The aligning model will simplify goal-setting and make your strategy more agile. It's also an easy way to let more teams contribute: the KRs might not be relevant to them, but they can quite often help with the Objectives.

Semantic focus rather than rigid networks

Asking your team to reduce their strategy to a complete network graph will generate a lot of frustration. But, making sure that everyone shares the same focus is absolutely attainable. The key is to replace complexity with more frequent conversations. Have weekly OKRs reviews. Share monthly company-wide updates on top-line OKRs. Make sure that keeping track of progress is easy, and that teams can adjust their strategy in a few clicks.

OKRs graphs don't make your teams more focused. Repeated conversations about the goals do.

Aligning OKRs in practice

It's great to have the theory, but what does aligning OKRs look in practice?

Great OKRs software should enable teams to move quickly with focus, and avoid wasting time setting things up together.

In this 5min demo below you'll see how Tability can help you:

• Create a new OKRs plan that aligns with a parent.
• Get a real-time overview of all company OKRs (similar to the picture above).
• Still provide support for deep-linking with a parent KR and replicate the benefits of a cascading model.

Hope you'll enjoy the video in spite of the French accent! (and please leave feedback and questions in the video!)

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