Elegance in Goal Setting
Here's how cascading goals work. Let's imagine that we have a small company where I'm the president (obviously). Our current yearly operational expenses (OPEX) are $100 (we're a small but proud company). We have a goal this year of reducing OPEX by 10% ($10), all of which is under the leadership of our VP of operations (let's call her Priya). We also have a revenue goal (not surprising) but we'll get to Marvin (sales VP) in a moment.
Priya's operations team includes a director of customer service (Ben) and a director of facilities (Michelle). Michelle's facilities team contributes $20 (20%) to the overall $100, so they own 20% of the goal and so are responsible for reducing OPEX by $2. Ben's team owns the lion's share of OPEX with the remaining 80% so he and his team need to reduce by $8.
The math is obviously over simplified here, but notice that the entire first level goal (10% reduction or $10) is accounted for (pun intended) in the second level goals. That's the cascade part. Think of a waterfall...even though it falls in different places, ALL the water from the highest level falls to the second level. Then, even though it falls in different places, all of THAT water falls to the third level, and so on. The result (in the waterfall) is several small pools that capture all the water that came from the top. The result (in my fake organization) is that all parts of the goal (in this case OPEX reduction) is assigned to someone. This design prevents the use of hope as a plan for improvement.
Let's continue because there's something else cool here. Ben's customer service team now has a goal to reduce the yearly OPEX by $8. Ben has a customer service team for each of four product lines and evenly distributes the goals there (another approach, as we've done already, would be to assign goals according to each product line's relative contribution). So each of Ben's managers are responsible for $2 in reduction. Each of those managers now has a clear goal from which they can develop individual goals for their teams. The very cool result is that each employee will have a goal that aligns clearly to the organizational goal. One of the most demotivating experiences an employee can have is working hard and not knowing what difference their work makes.
This is the cascading goal structure for OPEX. In this fake company we would also have a similar goal of sales increases. In that example, Marvin (sales VP) may plan to improve sales exclusively through the launch of a new product, which means the goal for other products is to sell at least as much as last year (although better is always better).
What I've described here is a top-down cascade, but (defying gravity) it's also quite possible to construct a bottom-up structure. In that example, employees (or small teams) sign up for an improvement, then their leaders sign up for an improvement, and so on. This is less likely (in my experience) to result in an organization-wide cascading goal structure, but it DOES allow an individual team to sign up for a contributing goal based on their relative contribution.
You already know that setting goals makes it much more likely that you'll reach them. Cascading goals makes it much more likely that all the goals support each other.