When she was the director of operations for a retail cosmetics chain in Nigeria, Tundun Aderibigbe, FCMA, CGMA, was given a straightforward mission: increase sales. She researched the company's sales, assembled detailed presentations, and shared her insights in meetings with the managers of the Lagos-based company's 26 stores.
But to her surprise, her message didn't seem to work. "You could tell they were bored," she recalled. "They weren't unpleasant. They weren't trying to not do their jobs. They just didn't understand what these charts meant."
It's an example of a common problem that was highlighted in the report Reimagining Performance Management from AICPA & CIMA and the World Business Council for Sustainable Development.
One section of the report focuses on the practice of "cascading" goals, in which leaders like Aderibigbe, who now has separate CFO and audit and advisory roles, are tasked with translating overarching corporate goals into objectives for individual team members.
Cascading can be a powerful strategy to ensure that individual employees are supporting the company's mission — but it's also a highly "fallible" process that depends on the actions of executives, managers, and employees, the report concluded (see the sidebar, "How to Address Goal-Cascading Pitfalls").
"It's one thing to come up with a strategic plan. A lot of companies go through that process," said Atif Ansari, CPA (Canada), ACMA, CGMA, who runs Ansid, a fractional CFO consulting business in Canada.
"Where it differentiates a company," he continued, "is how the management team executes that vision: How do you then take that strategy, turn it into actionable initiatives, and then cascade that through the organisation to make sure the strategy gets executed?"
Here's how Aderibigbe, Ansari, and other financial leaders have learned to set clear plans and translate company objectives for their teams.
Turning a top-down message into frontline strategy
After her initial messages failed to resonate, Aderibigbe tried a new approach to cascade the company's sales goals. Instead of delivering messages directly from the top, she decided to work in the opposite direction.
"The first goal was selling more. And then, the second goal was for them to understand what strategies work," she said.
Over several months, she visited all the company's stores. "I realised they do want to work, they do want to deliver," she said. The problem was that many frontline managers didn't understand how they fitted into the company's overall strategies.
"I got to experience a day in every one of their lives. I then found I began to understand their language a little bit more," she said. "I wanted to succeed at helping them, and they wanted to learn."
As she visited, she explained why it was important for managers to think more deeply about their sales strategies and participate in the performance-management process.
"You have to sell it: 'This is how I put on the lights. This is how I make sure that the store is pretty. This is how I make sure that you're ready to serve the clients,'" Aderibigbe said.
Soon enough, managers began calling her for help and advice. An intimidating corporate goal — "increase sales" — had become a tangible set of tactics and strategies for individual employees.
"When you help people discover strengths they didn't have, they trust you more. They listen to you more. They seek you out more," Aderibigbe explained. "As a leader, everything has to be about helping people to be more [of] what they want to be."
Demonstrating the individual's role
Aderibigbe demonstrated an approach that others say is crucial to goal cascading and alignment: She helped people understand how their actions contributed to a larger goal.
"It's about setting priorities with the team, involving frontline staff in the process, to make sure that what you're doing today — day in and day out — is going to serve the business well," Ansari said.
When people understand the organisation's higher goals, they gain more agency, and they can spot problems or opportunities that might be invisible to higher leadership.
"The team — they're seeing things every day, and they can come back and provide their input to [the plans set by leadership]," Ansari said. "They're trusted with broader goals that are aligned, but on a day-to-day basis ... they're able to function independently. It's not a micromanaging approach."
Aramide Balogun, ACMA, CGMA, a controller for Microsoft in West and North Africa, said she also focuses on individual contributions to the group.
She tries to help her team understand "that the whole performance-management process is not necessarily about driving individual results. It's rather about driving impacts within the team and within the business," she said.
"It's beyond me as a person. If my team does well but we fail at an organisational level, we all failed, in a way." Her goal, she said, is to help people understand how they will benefit when the organisation succeeds.
In contrast, when individuals aren't invested in organisational goals, they may instead pursue individual priorities, such as boosting their own sales numbers. In some cases, they may even believe that prioritising a team goal will hurt their individual chances of a promotion.
"There is a genuine trend now for people to have a situation and first ask, 'How does this affect me?' It then becomes provincial and protectionist decision-making," said Earl Furfine, CPA (inactive)/CITP, CGMA, a vice-president at IBM.
Aderibigbe has a simple solution to conflicts of individual and corporate priorities: "Call it out," she said. "It just makes it easier. Everybody puts their cards on the table."
She recalled the case of a manager who wanted to keep selling a product that fared poorly in other stores. Aderibigbe explained the overarching need to consolidate product lines and worked with the employee to identify alternative products.
"It ended up building more trust," she said.
Of course, the success of the goal-setting process ultimately depends on whether the right goals are being set and how they're communicated.
Especially in larger organisations, the goal-sharing process can become "opaque — with clarity diminishing" as goals are passed down through the hierarchy, according to the report.
Hada Chang, CPA, CGMA, said that he encountered just such a problem at a previous job when a miscommunication between higher-up leaders led to wasted effort.
"I spent too much time on details, but I didn't actually need to. I did much, much more extra work," he said.
Years later, Chang was determined to avoid those kinds of errors at his job with Bain & Co. in South Korea, where he was assigned a role moving accounting work to a shared-services centre in India.
To ensure that he was fulfilling expectations, he focused on key questions throughout the complex project: "What is the outcome? Why are we doing what we are doing?"
Similarly, Ansari likes to ensure alignment by drawing "strategy maps", where all the team's objectives are listed and directly linked back to the overall business strategy.
Aderibigbe also said that goals can be inadvertently changed during a cascade — for example, a manager might understand "lower cost" to mean "lower quality". To keep goals aligned, she phrases goals in a way that encourages managers to think about multiple options.
"You can't just say, 'We must cut costs.' You say, 'How can this be more cost-effective or achieve more with less?'" she explained. "The language helps to reduce corruption [of goals]."
Choosing the right priorities
A common theme emerges amongst financial leaders: Decision-makers at every level must choose a manageable number of priorities.
In her role at Microsoft, Balogun is responsible each year for cascading a set of goals from her CFO to several collaborators across 14 legal entities in 13 countries. Recently, for example, those goals have included creating business continuity plans for remote operations.
As she and her manager discuss priorities for the complex organisation, they consider a series of questions: "Is this the right time? Is it an activity that can wait? How important, how urgent is it? How likely is it to impact business disruption? How likely is it to impact business enablement?"
Those choices are important.
Aderibigbe said: "As a leader, if you put too much on people, you get nothing — absolutely nothing." She suggested choosing five or six immediate priorities, with input from the team.
Experts interviewed for this article said goals should be specific and attainable and should include a menu of ways to accomplish them.
Staying on track
Once Balogun has selected goals with her manager, she helps to broadcast them widely through the organisation.
"We typically have a call, a very open call, where the goals are broadcast. Everyone's aware, and you can ask questions," she said.
Ansari said, "Those kinds of broad communications are important because team members should understand the goals of others and how they might interact, not just their own goals."
Later, Balogun answers questions from individual team members to ensure they understand their goals — and then she keeps checking in with weekly or biweekly meetings.
"We're able to correct, we're able to clarify, we're able to raise our hands up and identify potential blockers very early in the process ... as opposed to finding out later that they were unable to complete their goal due to an issue you could have solved months ago," she said.
At IBM, Furfine heads US federal sales and has been tasked with leading a sales strategy transformation. He ensures synchronicity by holding regular one-on-one meetings with people at most levels of his 65-person organisation and has an open-door policy for anyone in the organisation who wishes to speak with him.
"I basically have about 30 or 40 meetings a month, sometimes only ten or 15 minutes," said Furfine, who stressed that he was speaking for himself and not for IBM.
The meetings can reveal to him when a team's goals have drifted. Conversely, they also allow lower-level employees to share obstacles and see their place in the grand strategy.
"If you don't build this circle of trust where people can tell you really what's on [their] mind, you end up getting lip service," he added.
While strategic goals tend to focus on the company itself, their success ultimately depends upon individual employees.
Facing a list of goals can feel intimidating, or even impossible, for inexperienced employees. When one of Chang's direct reports shared those feelings, he offered this advice: "We are human. We are not computers."
Then, he encouraged the employee to break down those big, overarching goals into timelines and milestones — and he explained how fulfilling the goals would benefit his employee.
"Once you accomplish this, it will help you to develop your career," he said. "It will not be as complicated as you think."
At IBM, Furfine stresses that he is there to support his team, but he trusts them to find the right way to achieve their goals.
"I surround myself with really smart, hard-working people, and I empower them to do the job that needs to be done," he said. "I don't tell them what to do, exactly how to do [it], but I tell them I'm there to clear obstacles."
After a few cycles of goal setting and achievement, he said, people begin to trust the system and see benefits to their career. Ansari said that the corporate goal-setting process must ultimately focus on individual growth, too.
"When it comes to individuals, those eight to ten objectives have to include personal development — how the organisation is going to help them achieve their personal goals as well," he said.
"There has to be that balance for individuals as well as business needs."
How to address goal-cascading pitfalls
The goal-cascading process can be derailed by personal biases and other issues along the chain of command, according to the experts interviewed for this article and the report Reimagining Performance Management from AICPA & CIMA and the World Business Council for Sustainable Development. Here's how to address key issues.
It's tempting for managers to focus their efforts on their own areas of expertise. This may lead them to ignore or change goals that force them into new territory. Addressing this bias may require establishing a sense of safety by assuring the employee there is room for error; suggesting ways for the person to improve their skills in a given area; and underlining the importance of a particular goal to the success of the business.
Complying with corporate goals often comes with trade-offs for managers and employees. For example, a corporate goal of making a more efficient retail product line-up might require store managers to drop some of the products they prefer. Leaders can respond by assuring these employees that the change won't affect their chances of a promotion or salary increase; sharing detailed information that shows why the change will benefit the company; and working with employees to create new strategies.
Differing interpretations of strategy and goals
Especially in a large organisation, the original intent of a goal can be lost in translation. There also may be debates over the best way to achieve a goal. Leaders can avoid confusion by providing specific strategies and tools to achieve goals. They also can engage with employees throughout the organisation, including through "skip level" meetings with lower-level staff, to ensure that everyone shares the same understanding of the company's goals.
Lack of transparency and efficiency in the cascade process
The cascade process is meant to create "line of sight" between the work of individuals and an overall strategy — but it can become cumbersome and confusing as goals are passed from level to level of the organisation. To improve transparency and efficiency, the experts interviewed for this article suggested that businesses create and share documents that clearly "map" the overall strategy and demonstrate how each individual's goals are linked to the pillars of that strategy. An open and receptive culture also will allow staff to ask questions and highlight potential inefficiencies.
Andrew Kenney is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.
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