Cascading your strategy is part of the 8 framework.
When you cascade your company’s strategy, you break down the objectives into smaller chunks for the next organisational level. The process stops at the smallest unit level – often teams. In the end, the size of your organisation will define the size of the cascade.
MACRO ALIGNMENT
It is crucial to achieve macro alignment between all the objectives – horizontally and vertically – in your organisation. You can achieve better alignment by aiming for MECE – Mutually Exclusive and Collectively Exhaustive. This simply means that everything from the level below (strategy, initiatives, objectives, etc.) should add up exactly to the level above, without any overlaps. This may sound logical and easy, but practice shows that many companies have a difficult time linking levels correctly.
One of the reasons companies find it hard to get the macro alignment right is the complex matrix of responsibilities. Strategy Execution accountabilities are often blurred and spread across an organisation.
In large organisations, you can have up to 10 different parties involved, including corporate functions, functional lines, regional structures and countries. In addition, within each of these structures, responsibilities are often dispersed among human resources, finance, the strategy department and the various leadership teams.
When your macro alignment doesn’t seem to be working, start by taking a look at the complexity of the Strategy Execution accountabilities and reduce where possible.
MICRO ALIGNMENT
On a micro level, you need to balance your objectives across perspectives. The four traditional perspectives are: financial, customer, internal processes and people. But you can always add other dimensions as appropriate. The Balanced Scorecard is the best-known method.
In addition to the balancing act on the macro and micro levels, you need to select the right indicators – often called Key Performance Indicators or KPIs – to track the objectives and define appropriate targets.
