New software tracks how companies execute strategy

In new jobs after graduating from university, Eric Perriard and Tom Wright found their employers could articulate grandiose strategies for their businesses. But there was little connection to how the average employee could help out.

Perriard, who worked in human resources for a manufacturing company, and Wright, in banking, found that HR systems were fine for performing technical tasks related to employees. But HR software couldn’t track if a company’s broad strategy was on the mark throughout the year and how employees felt they fit into the big picture and performed.

“There is nothing to cascade the strategy down to people — to really translate the CEO’s or organization’s missions to every person down from middle management to the people in the field,” Perriard said.

Perriard and Wright’s company, Sydney-based Responsis, has built a cloud-based web service called Cascade. For employees, Cascade keeps them in tune with how they can help the goals of the organization, and for management, ensure everyone’s work remains aligned with the company’s strategy.

There are other products, such as SAP’s Successfactors, that try to tackle this problem. Perriard said Sucessfactors focuses on appraisal and people management, but doesn’t help to solve issues around executing company strategies.

Cascade is Web-based dashboard. An employee, for example, can see the company’s broad goals and then more specific ones in their business unit. They can define their own goals, which fit into a neat, visual hierarchy in Cascade.

A company’s chief strategy officer — an increasingly fashionable title in organizations — can see diagrams of employees and which ones are working on tasks that fit into the overall vision. Cascade creates a percentage that shows how strategically aligned an organization is, or the “overall cascade” in which strategic themes are filtering throughout a company.

Perriard said Cascade isn’t an HR system, but it certainly can be used by HR. Wright said interest has typically come from managing directors, strategy officers and CFOs because they’re the people that come up with the strategies.

“They want it so they have can visibility — so that they can say, ‘I took the time to create this particular strategy, now I want to know how is that being implemented right down to the front line’,” Wright said.

Cascade is intended to help companies catch when things start to go astray. A company may kick off the year with a new set of strategies but actually only figure out in August or September that they’re not going to meet, say, a revenue goal until it is too late to change.

Cascade isn’t designed for bosses to micro-manage people. It’s also not a project management tool. Employees would likely update their work and goals once a month or so in Cascade, while management would keep a closer eye on how groups of people are working towards the strategy.

“You can immediately see in a very visual way how aligned your organization is,” Wright said. “Within the first month or so, you will have a very good indicator of whether or not you are going to succeed.”

In true startup fashion, Perriard and Wright coded the first iteration of Cascade, which was released in February. Now they have a lead developer and are both moving toward the business side.

Cascade is hosted on Amazon’s cloud infrastructure in Australia. Since Cascade handles very sensitive data, the data is encrypted using 256-bit AES (Advanced Encryption Standard). To assuage concerns with using cloud storage, Cascade consulted Israeli cryptography experts to implement partial homomorphic encryption.

Encrypted data is descrambled with a key, and management of those keys poses a great security responsibility. Cascade’s implementation allows the data to be decrypted with a still-encrypted key, Wright said.

It requires a lot of CPU power, but it means a third party does not have to be trusted with the key. If Cascade was compromised, attackers would only get encrypted data and an encrypted key, which would be useless, Wright said.

The system “allows what everyone thought was impossible,” Perriard said. “It allows you to have the most encrypted data at rest without a third party. So it’s brilliant. You save costs, and you have the most secure data at rest.”

In what may be a rarity in the startup world, Cascade actually turned down a venture capital offer of investment. They didn’t even know what their company was worth, Wright said.

“I think from our perspective, we agree it was the right thing to turn it down,” Wright said.

“We took the radical, opposite approach, which was literally: everything we don’t know how to do, we have to learn it. Tom had to learn some graphic skills, I had to do some video editing,” Perriard said. Everything that was too much of an investment to learn, we outsourced it.”

That outsourcing included the drawing of meerkats, which grace their Responsis logo, and the homomorphic encryption technology, Wright said.

Aside from themselves, they just have two full-time employees. A 60-person contract team helps with support. They’ve also landed customers, including from UNICEF Australia and a major player in the credit card business. To allow them to continue without VC funding, Cascade charges $120 per user per year, paid one year in advance.