HR PERSPECTIVE: Strategy must be linked to sound performance management system

IT’S not enough to develop a strategy and assume success will follow. Organisations must ensure that the strategy is deeply integrated with a sound performance management system. Without this integration, even the most well-conceived strategic plans are likely to falter.

As businesses strive to align short-term operations with long-term goals, a robust performance management system ensures that everyone in the organisation, from the C-suite to the frontline, understands their role in executing the strategy. Failing to cascade this strategy across all levels and roles significantly increases the likelihood of failure.
Well-known business strategy authors Robert S. Kaplan and David P. Norton, creators of the Balanced Scorecard, emphasise that strategy without execution is merely a plan. For a strategy to succeed, it must translate into tangible, actionable tasks for every part of the organisation. A strategy that isn’t linked to performance management lacks the accountability and metrics necessary to drive execution. Without a way to measure and track progress, leadership is essentially navigating blindly.
In contrast, performance management systems help organisations monitor progress, identify bottlenecks, and ensure that all employees’ efforts are aligned with the overall objectives. By regularly reviewing performance in the context of strategic goals, companies can adjust course in real time, ensuring that they remain on track. An estimated 90 percent of organisations fail to implement their strategies often because organisations fail to link strategy with performance management.
Importance of cascading strategy
Cascading strategy refers to the process of breaking down high-level strategic objectives into actionable goals for each department, team, and individual. It ensures that strategic priorities are clearly communicated and embedded into daily operations across the organisation. Research has shown that companies that effectively cascade strategy are more likely to achieve alignment between their employees’ efforts and organisational goals, thereby driving superior performance.

Human resources expert, Memory Nguwi

However, cascading is more than just a communication exercise — it’s about creating ownership. By translating strategic goals into specific, measurable objectives at every level of the company, employees understand their role in achieving success. This alignment helps departments and individuals focus their efforts on what truly matters to the business.
The process of cascading a strategy can be complex, but with a structured approach, it becomes much easier to align the entire organisation around shared objectives. Below are practical steps to cascade strategy effectively:
1. Develop clear, actionable strategic objectives: The foundation of cascading strategy starts at the top with clear and actionable strategic objectives. These objectives should reflect the company’s mission, vision, and long-term aspirations. Strategic objectives should be specific and measurable to enable tracking and evaluation. Vague goals such as “increase market share” are ineffective unless broken down into targets such as “increase market share by 10 percent within one year through product innovation and customer acquisition strategies.”
2. Translate objectives into departmental goals: Once strategic objectives are set at the executive level, they need to be translated into goals for each department. Each department’s objectives should support the organisation’s overall strategy while considering its unique role. For example, if the strategy is to improve customer satisfaction, the marketing department may focus on customer communication while the product development team works on user-friendly design improvements.
3. Link individual performance metrics to strategy: At the individual level, each employee should have key performance indicators (KPIs) tied to strategic objectives. The most effective way to ensure this linkage is through a performance management system that integrates KPIs with broader company goals. Each employee must understand how their daily tasks contribute to the organisation’s overall strategy.
For example, a sales representative’s KPIs might include achieving a certain percentage of sales growth, which directly supports the organizational goal of increasing revenue. A project manager’s KPIs might focus on delivering projects on time and within budget, which aligns with the broader goal of operational efficiency.
4. Ensure continuous communication and feedback: Clear and continuous communication is critical to a successful cascading strategy. Employees must not only be informed about strategic goals but also reminded of them regularly. This requires leadership to communicate frequently and in a way that connects employees to the overarching objectives. One study found that many strategic failures are due to a lack of employee understanding of the strategy. Leaders should use multiple channels, including meetings, emails, and digital platforms, to communicate strategic goals.
Additionally, performance management should incorporate continuous feedback rather than limiting performance evaluations to an annual review. Feedback allows employees to adjust their efforts throughout the year and remain aligned with the strategy.
5. Use technology to support the process: Today, organisations have access to technology that can facilitate the cascading of strategy and help manage performance effectively. Tools like performance dashboards and integrated performance management systems allow organisations to track the performance of teams and individuals against strategic goals in real time. This visibility enables leaders to make data-driven decisions and course-correct as needed.
Furthermore, these tools help standardise performance metrics across departments, reducing confusion and ensuring that everyone is measured against the same strategic goals.
6. Foster a culture of accountability and ownership: Creating a culture of accountability is crucial to linking strategy and performance management. Every employee should feel responsible for achieving their KPIs and contributing to the overall strategy. Leadership’s commitment to holding individuals and teams accountable for their performance and celebrating successes when strategic goals are achieved cultivates this culture.

To ensure that strategies are executed effectively, organisations must cascade their strategic objectives throughout all levels and roles, ensuring that every employee is aligned with and accountable for the strategy. By developing clear objectives, translating them into departmental and individual goals, leveraging technology, and fostering a culture of accountability, organisations can ensure that their strategy is not only well-conceived but also executed to achieve meaningful results.