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What Is A Cascading Strategy? 3 Critical Steps To Take For Strategic Alignment
These three steps will help you cascade your strategy throughout your organization.
If you’ve recently completed your organization’s strategic plan, aligning every division and department around that plan—i.e., cascading your strategy throughout the organization—is your next step.
What is a Cascading Strategy?
A cascading strategy is when you divide your organization's overall strategy throughout your different departments. From there, you set up a support chain train throughout your entire organization that will ensure you are meeting your strategic goals. In order to do this successfully, there are three critical steps you need to take.
1. Determine how much strategic alignment should be direct and how much should be indirect.
Direct alignment is when everyone in your company is working toward the same measures and goals. In other words, the element you want to align will take root in all of your divisions and departments. Every organization typically has a handful of measures and goals (typically no more than 10) that should directly align to your strategy.
For instance, you may decide one of your measures is to create a team-based culture—and this is something every division can get behind. Creating direct alignment is a great tool for team-building, motivation, and good communication.
Additionally, if you want to get 10% revenue growth for your organization, you need to ensure that every department has a revenue goal that helps to add up to the overall 10% growth your organization is looking for.
Indirect alignment—also called “contribution” alignment—is a big-picture goal that everyone in every department contributes to but in their own way. Consider these examples:
- You may have a goal for 50% of your sales to come from products that have been developed in the last three years. In this case, every department—from marketing, to product development, to operations, to manufacturing—would be contributing to this aspect of the strategy but in their own specific ways.
- Your higher education institution is focused on preparing students for the real world—but everyone across the university will focus on a different aspect of this prep (from academics, to counseling, to sports and more).
- You may want to cut waste across your company. In order to do so, you could have groups focused on a number of different methods, including cutting energy consumption, lowering the defect rate, sourcing better packing materials, and more. All departments will cut waste but in different ways.
2. Determine what to do about goals that don’t align to your strategy.
You’re likely to run into some unique outliers during this process. These goals, at first glance, do not align with your strategy—but you may be wondering if you can still use them.
When To Use Outlier Goals
You should use outlier goals if a particular division or department does something unique that doesn’t fit in with the overall strategy. For example, if you have a regulatory requirement you need to adhere to, or if your department does something that can’t be boxed in with everyone else’s strategy (i.e. mergers and acquisitions).
When Not To Use Outlier Goals
There are a few times when you should not use outlier goals: for instance, if someone is trying to bully their pet project into your strategy or the person controlling finances has their sights set on a project that does not align. This is a good opportunity to step away from the activity, note that it’s taking up valuable resources and doesn’t fit strategically, and reevaluate whether or not it’s justifiable.
3. Decide who gets to make cascading strategy decisions.
At this point, it’s time to determine what your approach should be to executing on your strategy. There are usually two ways of doing this: from the bottom up or from the top down—and both have their merits, but at different times.
Top down: Starting at the top of an organization is the recommended way to build a cascading strategy, because you can more easily determine your direct and indirect alignment.
Bottom up: Starting at the bottom and building your strategy from the field to the front office is bound to be fraught with issues, too many iterations, and frustration. But executing on a strategy that is already determined works well from the bottom up. For example, every department can take a finished strategy and determine how to align, achieve, and accomplish it in their own unique ways.
You’ve got your cascading strategy down—don’t forget about reporting!
Now that you’ve gone through a strategic planning process, you need to be able to report regularly on your strategy. This free guide is a great place to start, as it defines a process for managing your strategic plan. You need to think through roles and responsibilities, a reporting calendar, and productivity tools—and with this document, you can do it all in one place. Good luck!