The company-wide vision of an organization is usually ambitious (as it should be), but grandiose strategic plans often fail to connect with day-to-day objectives. You might know exactly what you want to achieve, but without any ground-level execution, real success will remain out of reach.
An OGSM framework helps you bridge that gap. As a strategy tool, it maps out company strategies and then connects business goals to concrete daily activities—activities that deliver results.
In this article, we will cover the key elements of the OGSM model, how to implement it, and how to track it. You’ll also learn about its advantages and possible limitations that you should be aware of. Read on to learn how you can use the OGSM to bring your strategy into reality.
- The OGSM strategic planning model helps organizations connect future strategic aspirations to the daily activities of the company.
- The four key elements of the OGSM model are objectives, goals, strategies, and measures.
- Suitable for medium-sized to large organizations undergoing transformation and aiming to grow.
- Pros: OGSM is an easy-to-use, strategic planning framework that can help you communicate strategic priorities across the organization.
- Cons: The OGSM model can focus too much on long-term strategy and may lack transparency without the right performance management systems in place.
What Is an OGSM Model?
OGSM is a strategic planning framework that links short-term actions with long-term goals. It extends Peter Drucker’s idea of management by objective (a concept discussed in his book Practice of Management). As an acronym, OGSM stands for objectives, goals, strategies, and measures.
Here are four core elements of the OGSM model:
- Objective: What do you want to achieve?
- Goals: The quantitative translations of objectives into high-level metrics. How are you going to measure if you achieved the objective?
- Strategies: How are you going to hit goals and achieve your objective?
- Measures: How are you going to measure if your strategies are working?
What Are the Advantages Of OGSM?
As a strategy tool, the OGSM model provides several advantages:
- Offers a systematic approach to annual strategic planning: You get a step-by-step process that takes you from high-level objectives all the way down to operational and tactical planning.
- Provides strategic clarity: With a readable strategic business plan, you can easily communicate the company's strategic priorities. This is important, so your team has a clear understanding of direction and how they can contribute to the company’s mission. That aids company-wide motivation and the ultimate achievement of your organization’s long-term vision.
- Connects organizational goals to activities: The layered and connected approach of the OGSM model creates direct links between your organization's overall objectives and the actions accomplished by the boots on the ground.
- Encourages company-wide buy-in: A shared explanation of the organization's strategic direction fosters transparency and encourages teamwork. Employees can understand and interpret the purpose of their work, offering a sense of positive entitlement and usefulness.
- Measures and depicts tangible progress: OGSM model emphasizes the measurement and alignment of Key Performance Indicators (KPIs) in the context of strategic objectives. This vastly increases the likelihood that an objective will be accomplished. Accountability is an inherent side-effect of the OGSM Model.
How To Implement OGSM? (In 7 Steps)
You can build an effective OGSM model for your company by following the steps listed below. We've decided to take you through a step-by-step process based on the book The 1 Page Business Strategy. Unlike the original OGSM model, the authors of this book include the governance part of a strategic plan, which is essential for its successful execution.
1. Identify your organization’s present state
Conduct external and internal research to find out your company and the market’s current state. The more information and insight you have about the company’s strengths and weaknesses, the more informed your decision-making can become. You determine the limits and possible opportunities associated with the company, and that serves as the basis for an effective strategy development.
💡Tip: Use strategy analysis tools such as GAP analysis, SWOT analysis, and PESTLE analysis to define the challenge and get a full overview of internal and external factors that could affect your company’s success.
2. Create an objective
Objectives state a specific vision of the future that defines the company’s strategic direction. For your strategy to work, you need to be clear and focused on what you want to achieve.
Your objective will decide the long-term direction of the company and set the stage for all future strategic planning.
Characteristics of a great objective statement:
- Clear and concise
- Time-bound (depending on your planning cycle)
- Resonates and engages your target audience
- Based on business reality
- Aims beyond the present state of the business
Here are two examples of a good objective:
- We will become a market leader in the beverage industry by focusing on new products, innovative marketing, and meaningful relationships with our stakeholders to accomplish industry-leading profitability by 2025.
- We will become a leader in sustainable mobility by 2025 by focusing on high-quality products, innovation, and enhanced technology to achieve profitable growth.
💡Tip: Stick to one objective per OGSM plan and avoid adding every possible objective that comes to your mind.
Cascade Strategy Execution Platform supports a number of different frameworks, the OGSM being one of these. See how you can implement the OGSM in Cascade for faster results.
3. Set and align a number of goals to your objectives
The next step is to set clear, measurable goals that translate your objectives into quantifiable metrics. Hold a brainstorming session with all of your employees and team members. Their ideas will help you make sure that your goals are realistic and attainable. Use the SMART method to set effective goals. SMART is a well-known method that makes sure your goals are:
- Specific: Goals should be clear and easy to understand
- Measurable: Goals should be quantifiable and trackable
- Attainable: Goals should be ambitious but not unrealistic so they don’t de-motivate your teams
- Relevant: Goals should be connected to business’s reality and industry
- Time-based: Goals should be set within a time frame
Choose three to six goals that are actionable. Unlike your objectives, your goals should be short-term targets that define progress within a set time frame.
- Gross profit
- Market share
💡Tip: Goal-setting should not be a top-down process. This can cause resources to be misallocated or spread too thin, workflow problems, and even competition between departments. Get input from key stakeholders and gain buy-in for the new direction.
4. Define strategies that are relevant to meet your objective
Your strategies explain how you plan to achieve your objective.
Going back to strategy definition, this section should clearly communicate your strategic choices—define in detail what you will do. In addition to what you will say NO to. These choices will guide all decisions, actions, and resource allocation.
Examples might include which products to develop, cost reduction strategies, customer acquisition methods, and employee retention and engagement practices. Coca-Cola has listed a number of marketing strategies that would help them reach their goal of getting more customers. These include:
- Leveraging data insights for better asset allocation
- Experimenting with global execution
- Accessing the best creative talents
💡Tip: Focus is key. Choose three to five strategies and prioritize those that give you the biggest chance to succeed. If you are choosing between multiple strategic choices, consider using a risk assessment matrix to assess the risk that comes with each decision.
5. Set measures and define the action plan for each strategy
The next step in creating the OGSM plan is to define measures and an action plan for each strategy.
This is where the authors of the book The 1 Page Business Strategy added a twist to the original OGSM model. They split measures into two elements:
- An action plan should include specific projects or initiatives to address performance gaps and outline what needs to be done to execute each strategy. Each action plan should have an owner and deadlines.
- Dashboards give you an overview of performance and answer if your plan is still on track. This is where you track key measures and get data to inform your decision-making process.
Measures are quantitative metrics that are used to set clear benchmarks and evaluate how well your team is doing. This will help you understand the efficiency of the strategies.
Remember, measures are not the same as goals. Measures are linked to specific strategies and measure specific areas of the organization. On the contrary, goals represent more overarching financial metrics that share the big picture.
A strategy should have no more than three measures. As the organization executes, measures help track progress and make decisions about whether strategies need to be adapted or eliminated.
- Customer satisfaction (NPS score)
- % of sales growth by product category or market
- Manufacturing efficiency (OEE)
- Logistics claims
- Production downtime
- Employee retention rate
- Improve customer support quality by increasing product and technical knowledge
- Reduce scrap costs by conducting regular audits of material sources
- Increase uptime by developing operators' skills to routinely maintain equipment and proactively identify possible problems
- Run an employee satisfaction survey twice a year
Each measure and action should have a person who is in charge of keeping track of progress and reporting on it regularly. Regular reviews will establish accountability and maintain execution momentum.
💡Tip: Real-time and accurate data are crucial for effective strategy execution. In Cascade, for example, you can set up strategy dashboards to see how key strategies are coming along. This will help you quickly identify underperforming areas and take corrective action before the problem gets worse.
6. Align and execute your OGSM plan
A high-level OGSM plan needs to be linked with the goals and strategies of each function or organization level. During the cascading process, objectives and goals shouldn't change. It sounds like an easy task, but one survey from Gartner shows that two-thirds of an organization’s functions are misaligned with business strategy.
Each business division or department should have its own strategies, measures, and action plans to help reach the company’s objectives and goals. Strategic alignment is important to make sure that everyone is rowing in the same direction and to avoid blind spots where resources are being wasted.
An example of a company-level plan aligned with sub-plans across the organization in Cascade
💡Tip: It's better to overcommunicate your strategy than to keep it locked away in a spreadsheet. Your departments and team members need to know what's going on so they can make decisions that are in line with the company’s strategic priorities. Using Cascade, you can keep your strategic plan in one place where everyone has real-time access to the necessary information.
📚Recommended reading: 3 Steps To Launch and Communicate Your Strategy
How To Measure And Review Progress With OGSM?
A new strategic direction takes time to adopt, and you can only optimize low-performing strategies after an extensive review. A one-time setup is easy to forget, but your OGSM methodology needs to be constantly monitored and carried out at all levels of the company.
To make sure your OGSM plan works in the long run, you need an effective performance management system that cultivates transparency, keeps track of progress, and supports continuous improvement. This can include activities such as:
- Weekly reviews and progress reports from action owners
- Monthly or quarterly review meetings with the strategy owners
- Biannual or annual strategic reviews with leadership/executive teams
- Regular communication from the organization's leadership on progress
- Regular communication on progress from managers to teams
- Regular tracking and reporting from team members to managers
An example of a company-level plan aligned with sub-plans across the organization in Cascade
💡Tip: You can use spreadsheets or other documents like Word or PowerPoint to keep track of your success. However, keeping an OGSM spreadsheet up-to-date can be time-consuming and error-prone. On top of that, it’s difficult to align multiple OGSM documents for each business division or department. Even small companies need multiple OGSM documents, and it’s difficult to track and identify links among them.
These pitfalls can be avoided with the right software. Using a strategy execution platform like Cascade, you can effortlessly build a high-level plan and link it to sub-plans. Your teams can track and report their progress, while you have a complete overview of what’s happening with your plan in one place.
OGSM vs OKR: What Is The Difference?
The OGSM model has significant overlap with the Objectives and Key Results (OKR) Framework. Both strategic frameworks create alignment between future aspirations and day-to-day operations.
But OKR places more focus on small, meaningful initiatives and their eventual results. Emphasis is given to links between activities and outcomes. OGSM stays focused on a top-level strategy that cascades company objectives down through different levels and time frames. Case in point: most OKRs occur quarterly, while an OGSM functions as a long-term, continuous plan over a span of years.
You can use both to create a top-down and bottom-up approach to strategy. OGSM will give an organization a full picture of the company's strategy, while OKRs will make sure that day-to-day operations are aligned with the strategy.
📚Recommended reading: OKRs: How To Avoid The Trap That Kills Performance
What Are the Disadvantages Of OGSM?
The OGSM model has a few possible limitations that you should be aware of:
- Lack of flexibility: Since the OGSM model’s aim is future-forward, the framework is not as adaptable as other competitive strategy models. Your OGSM framework may not be able to adjust to rapid market changes or volatility.
- Lack of granularity: OGSM maintains a view of the big picture. There is a risk that your strategies remain too broad and do not capture all the necessary details, leading to issues with measurement.
- Impersonal top-down approaches: If not managed appropriately, leadership can forget to include employees in the strategic planning process. That causes a disconnect between your high-level objectives and ground-level execution, the easiest way to lose company-wide buy-in.
- Lack of transparency: Difficult to maintain a high-level overview of OGSM progress if you keep plans in multiple and disconnected documents.
- Confusing terminology and structure: The OGSM model is structured differently than other strategic planning models, and it might be a bit challenging to understand at first.
📚Recommended reading: Strategic Planning Models: The 5 Best Strategy Models
Turn Your OGSM Plan Into Reality 🚀
With the OGSM model, organizations can set work activities that create desired, goal-aligned outputs. OGSM framework is a great choice if you want to summarize your strategy in a one-pager and share it with your employees. But if the plan is made without the right resources, structure, or performance management system (for example, if key stakeholders don’t have a say in it, the measurements aren't clear, or there's no way to track progress), the model can be hard to implement and cause employees to lose interest.
To counteract possible strategic drift, your organization should invest in the proper strategic tools. With the right OGSM implementation and strategy execution tools, your business plans can become achievable objectives.
FAQs about OGSM
What companies use OGSM?
OGSM has been adopted by some Fortune 500 companies, including Procter & Gamble and Coca-Cola. It’s suitable for companies and teams of all sizes.
What are the measures in OGSM?
Measures in OGSM are key performance indicators (KPIs) you’ll use to monitor the progress of each strategy.
What is the difference between goals and objectives?
In the OGSM model, an objective is a qualitative description of your long-term goal. Goals, on the other hand, are quantitative metrics that help you measure progress toward the target objective.