What is OGSM?

OGSM, an acronym for objectives, goals, strategies, and measures, is a strategic planning model that links short-term efforts with long-term goals. An OGSM framework helps business owners define their goals and determine how to get there. This method breaks down your visions into broad objectives, measurable and fixed goals, strategies to guide your actions, and measures to monitor your progress. Here’s how it works:

• Objectives: Determine what you’d like your company to achieve in the future.
• Goals: Set measurable short-term goals that can help accomplish your objectives.
• Strategies: Identify strategies for reaching your goals.
• Measures: Measure results to see if your strategies are working.

Two of the best OGSM examples of Fortune 500 companies successfully implementing this framework include Procter & Gamble® and Coca-Cola®.

Please note that none of the companies, institutions, or organizations mentioned in this article are affiliated with Indeed.

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OKR versus OGSM

The OKR (Objectives and Key Results) plan and the OGSM model are both strategic frameworks that can create alignment with future objectives and day-to-day operations. Their main difference is that the OKR model focuses on smaller, meaningful initiatives and their results and is typically a quarterly plan. Conversely, the OGSM model maintains focus on top-level strategies and is a continuous plan over an extended period, sometimes years.

Advantages of OGSM

Organizations can see several advantages when they implement an OGSM framework, such as:

• Linking organizational goals to objectives: The connected and layered approach of the OGSM framework offers visual progress as you accomplish goals linked directly to your organization’s objectives.

• Strategic clarity: Seamlessly communicate your strategic priorities with a comprehensible business plan. With clear direction, your team can better contribute to your overall company mission. This strategy can boost company-wide motivation and help achieve long-term objectives.

• Providing a step-by-step process for strategic planning : The OGSM framework can systematically take you from your tactical and operational planning to your higher-level objectives.

• Measuring and revealing tangible progress: Accountability is an innate side-effect of OGSM. This model focuses on aligning and measuring KPIs (key performance indicators) as strategic objectives, increasing the probability of completing company objectives.

• Motivating organization-wide buy-in: Employees feel more valued and important when they know their actions are vital to achieving goals. A shared explanation of the company’s strategic plans and regular updates can foster transparency, collaboration, and teamwork.

Disadvantages of OGSM

You may find that the OGSM framework has some limitations, such as:

• Measuring progress: Without the right software, like a performance management system, multiple disconnected documents can make maintaining a comprehensive progress overview challenging.

• Confusing structure and terminology: The design of the OGSM model differs from other strategic planning models and can be initially difficult to understand.

• Lack of adaptability: The OGSM framework isn’t as flexible as other strategy models because its main focus is the future. It may not adjust quickly enough to some market changes or volatility.

• Not detail-oriented: Because of its broad oversight of the plan, there’s some risk that the OGSM model may not capture all details, leading to measurement issues.

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Implementing the OGSM model

The following steps can help you build and execute an effective OGSM model for your organization:

1. Identify your company’s present state

Conduct internal and external research on the state of your organization’s market. The insights you gain regarding your company’s strengths and weaknesses can help determine your opportunities and limits—serving as the foundation for developing an effective strategic plan. Strategy analysis tools can make this process less challenging.

2. Create a clear objective

Your objective defines your company’s strategic direction using a specific vision for the future. Being clear, focused, and as transparent as possible regarding your goals can help your company succeed. Your objectives serve as a forecast for your company’s long-term direction and set precedence for future strategic planning.

Here are some characteristics and an example of an objective statement:

• targets beyond the current state of the business
• has time limitations and deadlines
• is reality-based
• is clear and concise
• engages your target audience

Example: We will become a leading brand in the hospitality industry by focusing on innovative marketing, new products, and meaningful relationships with our partners, investors, and colleagues to achieve industry-leading profitability by 2026.

3. Set goals and align them to objectives

Include your employees and team members in a brainstorming session to help set clear and measurable goals to translate your objectives into quantifiable metrics. Involving all personnel can ensure realistic, attainable goals. The SMART method can help your goals be:

• specific: clear, concise and easy to understand
• measurable: quantifiable and trackable
• attainable: realistic and within reach to avoid discouragement
• relevant: linked to your organization’s reality and industry
• time-based: set within a reasonable deadline

Aim for three to six actionable short-term goals that define progress within a predetermined time. Some common examples of short-term company goals are:

• EBITDA—Earnings Before Interest, Taxes, Depreciation and Amortization
• gross profit
• market share
• revenue

4. Detail relevant strategies to achieve objectives

Your strategies help you build plans to achieve goals and meet objectives. Clearly communicate and explain your plans in detail, including your actions, decisions, and resource allocation. Focus on three to five strategies, prioritizing the ones with the best chances of success. Some examples can include:

• Employee engagement and retention practices
• Cost reduction methods
• Customer acquisition methods

5. Set measures and explain action plans

Your action plan can include specific initiatives or projects that addressperformance gaps and explain how to execute each strategy. Digital performance management dashboards can provide performance overviews and show how your plans are progressing. This data can help track key measures and influence your decision-making process.

Quantitative metrics can help you establish clear benchmarks to evaluate team progress. They’re linked to strategies and measure specific areas of the company. These should not be confused with goals, which are representative of overarching financial metrics sharing the larger picture with vision and objectives. As your team executes your plan, your measures track progress and help determine whether to adjust, adapt, or eliminate steps.

Real-time execution can be crucial in identifying underperforming areas and enables you to take immediate corrective action before problems worsen—you can also allocate more resources to areas performing better than anticipated. It can be beneficial to have one person regularly keeping track and reporting on the progress of each measure and action plan. This strategy can maintain accountability and proper execution.

Here are some examples of measures:

• employee retention rate
• logistics claims
• percentage of sales growth by market or product category
• production downtime
• customer loyalty scores (NPS)

Below are examples of action plans:

• Reduce downtime by developing operators’ skills to proactively identify potential problems and provide routine maintenance on equipment.
• Improve the quality of customer support by increasing technical and product knowledge.
• Issue employee satisfaction surveys every six months.
• Reduce scrap costs by performing regular audits of material sources.

6. Align and implement your OGSM plan

Aligning your goals and strategies is an important step in developing high-level OGSM plans. Each department or business division has its own set of strategies, action plans, and measures to help achieve company objectives. Strategic alignment can be crucial for success when everyone works towards the organization’s objective with the same vision.

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How to measure the progress of your OGSM model

Adopting a new strategic plan takes time, and you likely won’t know how your strategies perform without an extensive review. The OGSM methodology has strategies, measures, and action plans at every level of your organization that require constant monitoring. It’s possible to keep track of your OGSM plan through spreadsheets and other documents, but this method can be error-prone and time-consuming. Even small businesses have multiple OGSM documents for each department; aligning them and identifying links can be difficult. Incorporating a performance management system can help you reach long-term success and ensure your OGSM model works to its capabilities.

Performance management software keeps track of progress, cultivates transparency, and supports continuous improvement through:

• Regular company-wide reporting and tracking
• Weekly progress reports and reviews from action owners
• Annual or bi-annual strategic reviews with executive and leadership teams
• Consistent progress reports from managers to teams
• Quarterly or monthly review meetings with strategy owners.