How to cascade OKR's
Cascading OKRs is a top-down driven approach allowing companies to ensure that all (or select) parts of the organisation drives in the specific direction set by management. In his seminal work “Measure What Matters” John Doerr explains that cascading OKRs makes “an operation more coherent”, which means that top level decision-makers set the strategic direction and that teams and departments further down in the company adopt OKRs based on the OKRs defined higher up in the organisation.
Cascading OKRs through different levels of the organisation thus enables management teams to ensure complete alignment between what individual teams and departments are doing on a daily basis and the overarching strategic direction of the company. John Doerr uses the following example of cascading OKRs at an electric car dealership to provide additional guidance:
Management level OKR
O: Become the leading electric car dealership in the region.
KR1: Makeup 60 percent of all-electric car sales in the region.
KR2: Reach 90 percent in customer satisfaction for servicing and maintenance operations.
Sales Manager OKR
O: Make up 60 percent of all-electric car sales in the region. (same as Management’s KR1)
KR1: Hire 2 new sales associates.
KR2: Increase the number of cars sold by 55 percent over the last year.
Sales Associate’s OKR
O: Increase the number of cars sold by 55 percent over the last year. (same as Sales Manager’s KR2)
KR1: Speak to at least 50 potential customers a month.
KR2: Successfully close at least 12 sales a month.
By: Johan Flodgren