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When you heard your CEO's ambition for the company, you likely felt a little overwhelmed. After all, how could your organization's grand statements of vision and strategy possibly translate into your day-to-day work?
The challenge may seem like a big ask, but OGSM can help you and your team make the leap from idea to reality in a very practical way.
OGSM stands for objective, goals, strategies, and measures. It's a straightforward tool you can use to help you put your corporate vision or strategy into action. You can use it to map out your organizational, team or personal goals, and to turn ideas into concrete activities.
In this article, we'll explore OGSM further, and how you can apply it.
Note:
OGSM will only take you so far with creating an overall, top-level strategy. To gain a deeper understanding of strategic planning tools and approaches, check out our introduction to strategy and the resources it links to.
What Is an OGSM Framework?
OGSM is a business-planning framework that helps organizations link their long-term visions and strategies to short- and medium-term goals, actions and measures. It can help you to monitor progress toward your goals, and maintain focus along the way.
It is believed to have been developed in the 1950s by Japanese car manufacturers, building on Peter Drucker's idea of Management by Objectives. Over time, OGSM has been embraced by a range of Fortune 500 companies, including Procter & Gamble® and Coca-Cola®.
You can apply an OGSM framework to your organization, department or team, or even use it to manage your personal goals.
How to Build an OGSM Framework
The way that you use OGSM will depend on a range of factors, such as your business model, your organization's structure and culture, and the way you make decisions.
You can apply it by following these four steps:
1. Set Out Your Objective
First, think about your main objective. To do this you need to gain a full understanding of your organization's strategy. What does it want to achieve? And how, at a high level, does it expect to do this? (For this article, we're assuming that this strategy development work has already been done.)
From this, you need to create a very clear, concise statement of your objective. This needs to be more than a vague "I want us to be the best." It should be a statement to focus your thinking, it should be emotionally attractive, and it should briefly state how you're going to do what you want to do.
For example, imagine you're a manager in a large automotive manufacturer. Your objective statement might be, "To become the world leader in electric van manufacture." You could expand on this by adding, "...through developing cutting-edge battery technology, high-performance motors, and an innovative workforce…"
You might then extend this further by saying, "...and reaching commercial markets that other manufacturers are not addressing."
Tip:
Any work on OGSM will be useless if you don't take people along with you. Make sure that you bring together all key stakeholders, and develop your objectives, goals, strategies, and measures as a team.
2. Choose Your Goals
Once you have your objective in place, set out quantitative results of what success will look like. In other words, what needs to be done to ensure you meet your objective?
These are your goals, and you'll typically need to set three or four of them to describe success. Be sure to make them SMART – specific, measurable, attainable, relevant, and timebound.
To return to our example, your goals might be:
- Within the next 10 months, develop a battery pack capable of giving a 10,000 lb vehicle a range of 650 miles.
- Within the next 10 months, develop a motor capable of delivering 400 horsepower and 400 pound-feet of torque.
- Within the next 12 months, integrate these into a standard van body and demonstrate a production-ready prototype.
- Within the next 12 months, develop a fully-costed proposal for manufacturing the vehicle at scale.
Tip:
It is important to use clear language in your framework. This will help your team members understand what you're proposing, encourage them to offer suggestions for improvements, and increase their buy-in.
3. Develop Your Strategies
When you've established your objectives and goals, your next step is to outline how you will achieve them. These are your strategies, and you should aim to identify three to five that will ensure you reach your goals.
Sticking with our fictional automotive manufacturer, your strategies might be:
- Setting up a well-resourced, dynamic HR team that is capable of running an accelerated recruitment program for bringing expert engineers on board.
- Recruiting engineers with strong experience of developing and integrating specialist electric vehicle components.
- Establishing a development facility at existing research or manufacturing sites.
- Developing a fully-costed business plan for manufacturing and marketing the vehicle.
Tip:
Although the "S" in OGSM stands for strategies, be careful not to confuse its use with the general usage of strategy that describes the development of your organization's top-level plan.
4. Decide on Your Measures
How you measure progress depends on the strategies you are trying to deliver. But, in all cases, it's good to bear the following questions in mind when developing them:
- Are our strategies working?
- Are we going to meet our goals?
- Can we realistically achieve our objectives and vision within the expected timeframe?
In their book on using OGSM to deliver business strategy, Marc Van Eck, Ellen Leenhouts and Judith Tielen suggest using dashboards to visualize progress on quantitative measures, and action plans to measure step-by-step progress toward your strategies. [1]
They also suggest bringing the OGSM elements together into a "one-page business plan," which quickly and concisely communicates the plan to everyone involved.
Tip:
Related tools include VMOST Analysis (which looks at aligning your vision, mission, objectives, strategies, and tactics) and the Hoshin Planning System (which encourages better strategic planning by getting people and organizations to focus on their KPIs). The Balanced Scorecard is another popular tool, commonly used for measuring strategy implementation.
Key Points
An OGSM framework is a business planning tool that helps organizations, teams and individuals define and link their long-term visions to short- and medium-term goals and activities. The acronym stands for:
- Objective – a clearly written, short statement of what the organization wants to achieve.
- Goals – describes what success should look like.
- Strategies – sets out how you will achieve your goals. (Not to be confused with organizational strategy).
- Measures – how you will monitor the delivery of your strategies.
References[1] Van Eck, M. and Leenhouts, E. (2014). "The 1 Page Business Strategy," Harlow: Pearson.
Trademark Information
"Procter & Gamble" is a registered trademark of The Procter & Gamble Company (see
www.pg.com); and "Coca-Cola" is a registered trademark of The Coca-Cola Company (see
www.coca-cola.com).
