I’m often asked if there is an optimal time period or timeline for which to use the OGSM methodology. Does OGSM only work for long-term strategies or also for shorter term business plans? Let’s explore this question.
The OGSM methodology is in my experience best suited for 3-5 year strategic plans and annual operating plans with a 1-year time frame. Because of its versatility however, the OGSM methodology can also be applied for strategic plans or project plans of any other time frame.
In this article, we’ll explore different aspects of time in regards to OGSM. Read on to find out whether the OGSM methodology applies well for your business plan or project plan.
Strategic time horizons for OGSM
OGSM stands for Objectives, Goals, Strategies, and Measures and is a one-page strategic planning methodology. OGSM connects ‘what’ you want to achieve with ‘how’ you are going to achieve it. And although the OGSM methodology is relatively simple, it’s worth investing the time to think through each component thoroughly. That’s why this structured approach is best suited for strategic plans or annual operating plans that don’t change on a monthly or weekly basis.
In my almost 10 years of experience in working with the OGSM methodology I have found that the OGSM approach works best for strategic plans with time horizons of 3-5 years or for annual operating plans with a time horizon of 1 year.
Personally, I have most often applied the OGSM methodology for annual operating plans in my businesses.
The structure of the OGSM methodology excellently lends itself to formulating the objective for a fiscal year and breaking it down into measurable goals (the ‘what’). The strategies then define the key business priorities or key initiatives during the year to deliver the objective and goals (the ‘how’). Finally the measures describe in quantifiable terms the key performance indicators and actions for each strategy.
The approach works the same way for strategic plans of longer time horizons such as for 3-5 years. The difference is that the objective and the goals then define the destination to be reached after 3-5 years. And the strategies and measures describe the key initiatives and actions over the 3-5 year time horizon.
Here’s an example what the objective and goals for an annual operating plan may look like (1-year time horizon).
1-Year Business Plan Example
Objective
Rapidly expand the business this year by reaching new customers with our new products
Goals
– Increase sales by 15% – Develop 20 new customers – Launch 5 new products
And here’s an example what the objective and goals for a longer term strategic plan may look like (3-5 year time horizon).
3-5 Year Strategic Plan Example
Objective
Become the recognized industry leader by developing innovative products and value-added services
Goals
– Achieve 30% market share – >60% of customers name us as “industry leader” – 20% of sales from new products – >30% sales from services
If you’d like to see a complete OGSM example and read the fictional story of how Tony’s Pizza created an OGSM for their business transformation, please click here.
As stated before, the OGSM approach can be applied to any project or business plan of shorter or longer time horizons as well. The key point is to align the objective and goals and the strategies and measures with the chosen time horizon.
What’s the review timeline for OGSM?
The OGSM should be reviewed regularly to make sure you are on track to achieving your goals and the ultimate objective. How often such reviews should take place depends on your time horizon.
When applying the OGSM methodology to 3-5 year strategic plans, the OGSM should be reviewed quarterly or at least twice per year. Conduct the review bottom-up, beginning with the measures and then the strategies. Finally confirm that you are on track to achieving your goals and objective.
A thorough review meeting with your team may last 2-3 hours depending on how deep you go into discussion and how well you prepare up front. I’ve done quite well with a 3-hour morning session once per quarter. Those review meetings were scheduled way in advance and everyone knew when they were coming and what had to be prepared. This made the reviews very efficient and the discussions targeted towards keeping the OGSM on track.
Annual Operating Plans on the other hand should be reviewed on a monthly basis. As the time horizon is significantly shorter, more frequent reviews are needed to ensure the plan remains on track. In addition to brief monthly reviews of the OGSM measures that “need attention” or are “at risk”, consider conducting quarterly more in-depth reviews of the 1-year OGSM.
Reviewing the OGSM regularly allows you to identify early on when initiatives need attention or when you are getting off track. Use the regular reviews to make necessary adjustments in a timely fashion by defining countermeasures and when needed redeploying resources.
When should I begin creating the OGSM?
Well, the short answer is anytime. The longer answer depends on your strategic time horizon.
3-5 Year Strategic Plans
If you are using the OGSM methodology to guide your 3-5 year strategic planning process, then you can of course begin this process anytime you determine that your business needs to review its strategy.
In larger or longer-running businesses you should review your strategic plan at least once every 3-5 years or whenever substantial changes in your industry or market place can be observed.
When you decide to overhaul your business strategy, consider doing your strategic review in the middle of your fiscal year. Find a time when you are undisturbed by shorter term actions such as budget setting or annual operating planning. This will allow you the time and the mental space to take a step back and think big.
1-Year Annual Operating Plans
If you are applying the OGSM methodology for your Annual Operating Plan or a 1-year business plan, then I’d recommend beginning the process right around your budget setting period.
By aligning the budgeting process and the OGSM creation, you are defining your business goals and your key initiatives in one go. I.e. you are defining ‘what’ you want to achieve and ‘how’ you are going to achieve it. This is exactly where OGSM is most powerful.
Unfortunately, in many large corporations the budgeting process runs independently from the discussion of business priorities. Budgets are typically set first (often top down), and then months later the business tries to figure out how to achieve the targets.
I usually begin the annual planning process in late September and invite my team to join the process. We set objective and financial goals first and then break them down into the key strategies and initiatives and set meaningful quantifiable measures. These become the topline and cost budgets. The OGSM and the financial targets are then cascaded throughout the business into the various functions and teams.
We aim to have this re-iterative process completed by November to allow sufficient time for alignment and communication before the year begins and we begin execution of the plan.
Templates
Find tools & templates for OGSM and your strategic planning process here.
OGSM Examples
Find OGSM examples and inspirations for your own journey here.
How much time does it take to create an OGSM?
In my experience creating an OGSM for an annual operating plan or a longer term strategic plan can take anywhere between one day to several weeks or months. This depends on the strategic time horizon, the complexity of the business situation and the number of people involved in creating the OGSM.
Creating a first draft of the OGSM can easily be accomplished in a single day. It is the discussions, alignments and the cascading of the OGSM that can stretch over multiple weeks.
The most complex and time-consuming parts of the OGSM are in my experience the objective discussion and making choices about strategies and resource allocation. The discussion of goals and measures is relatively straight forward and follows the objective and the strategies, respectively.
When you plan to conduct an OGSM workshop or strategic planning meeting, worry less about the time it takes to create the OGSM. I’d recommend to focus on robust discussions about the internal and external situation of the business and what the objective and goals should be for the next year(s). Then make trade-offs about where to focus your resources to achieve your goals.
In summary, take the time that you need. Don’t rush the discussions or simply go through the motions. And especially avoid simply filling templates for the sake of filling the templates. The OGSM is a great way to guide or facilitate your discussions. But it is the quality of your discussion which determines the quality of your OGSM or business plan and the time it takes to create it.
Conclusion
The OGSM methodology is very versatile and can be applied to virtually any strategic plan, project plan, and corresponding time frame.
The most effective time horizon in my experience is to use the OGSM methodology for 3-5 year strategic plans or 1-year annual operating plans.
What is your experience with the OGSM methodology. What time horizon have you found to be most effective for OGSM? Drop us a line below. We would love to hear from you.
According to a recent survey(1) a staggering 67% of well-formulated strategies fail during execution. Let that sink in for a moment: two thirds of all strategies fail. With the following 11 secrets of successful strategy execution, your strategy won’t be among them.
Have a clear strategy
Cascade your strategy throughout the business
Communicate your strategy and appeal to your team’s heart and mind
Make execution the leaders’ top priority
Integrate strategy execution into your company culture
Create a dashboard to track your progress
Hold monthly check-ins
Review execution in-depth once per quarter
Communicate progress on execution and celebrate successes
Keep in touch with initiative leaders informally
Review your strategy once per year
Knowing these 11 secrets does not automatically guarantee strategy execution success. You do have to put in the work and actively drive execution. However, by living these 11 secrets, you are a giant step ahead. Read on for a detailed description of each of these secrets to execute your strategy successfully and deliver excellent results.
1. Have a clear strategy
Sure, having a strategy is key to executing it. The emphasis here however is on the word clear. Clarity about the business strategy is in my experience the number one success criteria for successful execution. And this is easier said than done.
It is mission critical that everyone in the business is clear about where the business is going and how it is going to get there – and how everyone in the business contributes to making sure it gets done.
Imagine your team is not clear about where you are going. Imagine your team is not clear how you are going to get there. Everyone might be working very hard but it may seem like a hamster in a wheel: a lot of effort, but little progress. Worse still, different teams may be working on projects that pull in opposing directions. Clarity about the destination and how to get there helps to align everyone’s efforts in the same direction.
When the strategy is not clear and the business is not aligned, execution will feel like sitting in a dragonboat in which the rowers are not synchronized. If you have ever sat in a dragonboat, you will immediately know what I mean.
Dragon boat rowing in sync
Although varying with the size of the dragonboat, there are typically 18-20 rowers in a boat sitting in 9-10 rows of 2. The rowers in a dragonboat aim to synchronize their rowing movements to the beat of a drum. The rowers move the paddle at the same time into the water, leaning back with a deep, long pull, and then taking the paddle out of the water, leaning forward to do the motion again. When all 18 rowers do this motion in exact synchrony, the boat effortlessly glides forward as if floating on top of the water. If the rowers are not in synchrony, the boat sits and drags deep in the water as if pulling a weight.
A clear and well aligned strategy is like the drum in a dragonboat. It synchronizes the organization and ensures it can glide forward towards its destination. When the strategy is not clear, each member of the business may “row” at their own speed and hamper progress towards the organization’s objective and goals.
Here are a few symptoms of unclear strategies
Too high level: the strategy may be defined in terms that are too broad and generic, which leaves too much room for interpretation. Make sure your strategy is defined in unambiguous, self-explanatory terms that apply directly to the situation of your business.
Strategies not broken down into connected activities: The strategy may outline a clear general direction, but the detailed initiatives and actions needed to move the business towards its goals are not clear.
No clear measures what success looks like or when it is reached: The strategy may outline an inspiring future with clear actions but the goals and metrics are not defined. The business may not know what milestones need to be reached by when.
Not clearly communicated: The strategy may be well defined and clearly discussed among the leadership team and the board of directors, but it may not be clearly communicated to the rest of the business.
Not clearly connected to people’s jobs: The strategy may be clearly defined, but people’s roles and responsibilities do not clearly align with what needs to be done to reach the future destination. Make sure that your team understands how each individual’s role aligns with the strategy and can contribute towards its achievement.
Check your strategy for clarity before finalizing and make sure it is understood by the entire organization.
2. Cascade your strategy throughout the business
Cascading your strategy throughout the business is the next important secret to execution success. A cascade is “something arranged or occurring in a series or in a succession of stages so that each stage derives from or acts upon the product of the preceding”(2).
“Cascading” strategy means arranging the strategy along the organization’s hierarchy so that the organization is fully aligned behind the organization’s objective and works together to achieve it.
In essence, this means ensuring that the strategy is translated into meaningful activities that allow each group or function to work towards the overall company objective and goals.
Vertical cascading means breaking down the strategy from a higher level of the organizational hierarchy to a lower level. In large corporations this may look like the graphic below. In small businesses, this might be much simpler but works the same way.
Cascading Vertically
Horizontal cascading means breaking down a business strategy into the various functions that work together to deliver the business strategy. Again, in large corporations this might mean formally cascading across large units or departments of the company. In small business, this might just be across a smaller team or individuals. Irrespective of the size of the business, the key aspect is translating the business strategy into meaningful objectives and initiatives for each function that align with the overall business strategy.
Cascading Horizontally
In practice, cascading a strategy is typically a mix of the vertical and horizontal process. The important part is that the strategies align seamlessly to ensure that the organization works together to achieve the overall business objective and goals.
Strategies align best when cascading the strategy is a reiterative process. The higher level strategy gives input to the lower level strategy. And it also receives feedback and modifications from the lower level based on realities in the business, feasibility, and availability of resources.
This reiterative process makes the strategy more realistic and creates understanding and buy-in.
One more thought: when cascading your strategy, make sure each team or function has the skills, knowledge and resources needed to execute their part of the strategy.
3. Communicate your strategy and appeal to your team’s heart and mind
Communicate, communicate, communicate. When it comes to your strategy, you cannot over-communicate.
In fact, according to the earlier quoted survey(1) on strategy implementation, the top 3 reasons why strategies fail are
Poor communication
Lack of leadership
Using the wrong measures
Poor communication is the top reason why strategies fail! In fact, research described in an article(3) in the Harvard Business Review in 2008 revealed that information mattered most to strategy execution. So when you communicate, include relevant, up-to-date information that covers the following:
Explain what external and internal realities led to this strategy
Explain why this destination is meaningful for the business
Explain what it will look and feel like when the destination is reached
Explain how the business aims to reach its destination
Explain how everyone’s roles and their work contribute to taking the company to its destination
Convey full confidence that the business can and will get there – leave not an iota of doubt
Information by itself however is not sufficient to have the impact that you aim for. Before you communicate anything, you have to make sure that your audience is receptive to what you have to say. Don’t assume that your team will automatically listen because you are the leader or because it’s about the strategy. You need to “open” your audience first by appealing to their hearts and their minds. Make an emotional connection first, then share what you have to say.
When you communicate, consider the following pointers:
Customize your message to your audience – focus on being understood
Make an emotional connection with your audience right away in the beginning before sharing any information
Use practical examples that are meaningful to your particular audience
Summarize the key takeaways at the end of the communication
Include a call-to-action so people know what to do or where to start
In addition, take into consideration that different people learn differently or might be receptive to different types of communication, such as personal interaction, written information, video etc. When planning your communication, explore different media types to get the message across. And if you can afford it, do not only choose one, try to use all media types available to you. You may consider using the following means to communicate your strategy:
Town hall meeting
Personal letter or email
Video recording or animation
Detailed strategy document, such as a white paper
Posters
Infographics etc.
Strategy communication should never be a one-off, but should be a continuous stream of information. Create a clear communication strategy about how you aim to launch your new strategy (as if it was a product launch) and design the communication by audience, message, timing, and media. Communicate thoroughly and consistently over time about your strategy and its progress during implementation.
If your strategy requires a transformational change in your company, it is particularly important to communicate clearly and consistently so that your team understands why the change is necessary and how it will impact them.
In that case focus on “selling” the problem first, before offering the solution, i.e. the new strategic direction.
4. Make execution the leaders’ top priority
It’s the job of the business leader and his or her most senior team to drive strategy execution. Period. If execution is not on the leadership’s agenda, it will fall off the team’s agenda as well.
I have seen this time and again in my personal experience – both when driving execution as a mid-level manager in a large company myself and when consulting with other business leaders. When the strategy and its execution is top of mind of the business leaders, the implementation progresses. When the leadership’s attention turns elsewhere and does not come back to strategy execution, the organization will turn accordingly.
Battle Ropes
This is like whipping ropes in your local gym. The movement of the end of the rope travels throughout the rope like a wave. This is like the motion created by the leader of an organization. If the leader moves in one direction, the business will eventually follow. If the leader moves away from execution, the rest of the business will as well.
But what does that actually look like being “top of mind of the business leader”?
Put strategy execution on the agenda of every leadership meeting
The business leader personally runs formal strategy execution reviews (more on that later)
Key initiatives are led by the business leader personally
The business leader informally checks on execution progress when “walking the shop floor”
The business leader uses every opportunity to touch on the strategy and execution during communications such as round tables, town halls, one-on-ones, business trips, site visits, even customer/supplier/partner meetings (as appropriate)
It is important that the business leader holds him-/herself and the team accountable for doing what they said they would do in the strategy. The business leader has to walk that talk, or no one else will.
5. Integrate strategy execution into your company culture
For strategy execution to be a sustaining priority, it must become deeply ingrained into your company culture. But what is culture exactly and how can strategy execution become part of it?
According to businessdictionary.com, organizational culture refers to “the values and behaviors that contribute to the unique social and psychological environment of an organization”(4). Investopia.com says “corporate culture refers to the beliefs and behaviors that determine how a company’s employees and management interact and handle outside business transactions”(5).
I always simply like to say that culture is “how things are done around here”. Hence, culture encompasses the norms and behaviors deemed expected and acceptable for people and by people working in an organization. In companies and especially in small businesses, the culture is strongly influenced by the values and behaviors of the business leader. So integrating strategy execution into company culture is actually closely tied to the previous point of making execution the business leaders’ priority.
For execution to become part of the culture, execution has to become a norm and expectation that plans are implemented, activities are finished, and work is getting done. A high sense of responsibility and accountability must exist in the organization and it starts from the business leader and does not only apply to strategy. This holds true for all actions:
Do what you say you will do
Honor promises and commitments
Follow through on activities
Bring things to an end
Hold others’ accountable for their actions and commitments
For strategy execution to become part of the culture, similarly make it an expected norm and behavior that strategy execution is prioritized and followed through on. How? Consider the following pointers:
For each strategic initiative assign a clear caretaker, targets, timeline and milestones.
Make sure each strategic initiative is well resourced and the team has the necessary knowledge, skills and tools to get the job done.
Follow up at regular intervals and make sure the work gets done.
Rigorously prioritize what the business is working on. Move up the activities that lead the business towards its strategic objective and goals. Move down or eliminate the activities that don’t.
Check how each new idea, project or initiative helps bring the business closer to its destination.
Celebrate successes and reward achievements towards the strategic objectives.
Read more about how to drive execution in your business in the book “Execution – The Discipline of Getting Things Done”. Find this and other book recommendations on our resource page here.
Most important of all, however, culture is about people. Be there for your people and help them execute. Listen to their needs, their questions, their concerns, their difficulties, and their aspirations. Be present, be available, be genuine and act on what you learn. Take them with you on this journey of strategy execution and together execution will become part of the culture.
6. Create a dashboard to track your progress
“If you can’t measure it, you can’t improve it.”
Peter Drucker
Reality is that what you measure gets done. But measuring alone will not be sufficient. It takes three things:
Measure those metrics critical to your strategy execution
Make those metrics transparent in a dashboard
Create practices around reviewing the dashboard regularly and taking appropriate actions
In his insightful book “Measure What Matters”, John Doerr emphasizes the importance of setting goals – the right goals – and tracking those metrics that are directly linked with your strategy and achieving your objectives.
Carefully select those metrics that directly measure your business’ performance towards implementing your strategic initiatives. In other words: measure what really matters. Let go of the notion that you must measure and report everything. Deprioritize those metrics that are nice to have, but do not provide the necessary information to move the business towards its strategic goals.
Create a dashboard that tracks all selected metrics and reports your performance on a monthly basis.
For each metric on the dashboard, define a clear target. This is important so that the organization is clear about the expected performance. This also sets a clear standard for acceptable performance and guides the team in what is expected from them.
Add to the dashboard a traffic light system that highlights in green, yellow, and red how each measure performs versus its target. This allows you to quickly identify those metrics that require your attention.
I have done well with the following classification, but feel free to create your own based on your business’ needs.
Performance
Color
Meaning
Metric meets or exceeds target
Green
On Track
Metric <10% below target
Yellow
Needs Attention
Metric >10% below target
Red
At Risk – Urgent Action Needed
Traffic Light System for Dashboards
It is important that clear accountability is established for each metric on the dashboard. This is the person who is responsible for the metric’s performance. So assign clear accountabilities for each measure and make sure that the respective person has the ability to influence the metric and is clear about what is expected of him or her.
Make the dashboard available to your team so that its performance is transparent and can jointly be monitored. Consider to hang a print out in the pantry or coffee corner. Put it where people get together and where they can see it. Do weigh off confidentiality vs. transparency. If you are concerned about showing certain metrics, consider whether they were the right metrics to begin with.
Be clear what is expected to happen when the dashboard indicates that a measure is not on track. Discuss with the team and identify appropriate actions to get back on track.
Finally and just as importantly: Celebrate successes! Compliment the the team behind metrics that are on track and clearly exceeding its targets. Likewise identify the drivers for performance and thank the team for its efforts and its success.
7. Hold monthly check-ins
A monthly check-in is a monthly review of the progress you are making in executing your strategy. The purpose of the check-in is to monitor progress, identify roadblocks or concerns and decide on appropriate actions and countermeasures.
The monthly check-in should be attended by the team responsible for strategy execution. That certainly must include the business owner and the most senior leadership team as well as the strategic initiative caretakers.
Monthly check-ins are typically 60-120 minutes long depending on the nature of the business and the magnitude of the change your strategy is driving. Larger changes or strategy implementation processes that are facing significant challenges might require a bit more time. Strategy execution processes that are running smoothly might require less time.
Center the discussion of the monthly check-in on your strategy execution dashboard. Let the traffic lights guide your discussion, starting with the red lights first, then discussing the yellow lights and finally looking at the green lights. Your primary focus here should be on those metrics and initiatives that are ‘at risk’ or require urgent attention.
During your discussion of the metrics, focus on understanding what drives performance. Identify the root causes why certain metrics are falling behind or why others are ahead. Once you have identified the root causes, identify effective actions to improve the metrics. Ensure for each action that you have clarity about what is expected, that there is a caretaker and a timeline for action.
Hold your monthly check-ins on a fixed schedule. For example devote one hour every second Tuesday of the month to reviewing progress with strategy execution. The advantage of a fixed schedule is to create a habit in your business to review strategy execution. It allows you to plan ahead. There are no surprise meetings or sudden requests. There are also no excuses for not being prepared to discuss the performance of your metric. Set a date and stick with it.
Once you have fixed a regular date, plan ahead for the entire calendar year or fiscal year. Set reminders or send out recurring calendar invites to all participants. That way the date is blocked in everyone’s calendars ahead of time and you can avoid short notice schedule conflicts.
For the monthly check-ins to be effective, make sure to follow through on agreed actions. Start each check-in by reviewing the actions from the previous month and ensure all actions have been closed. Strong follow up is critical to establishing an execution culture as noted before.
In addition to monthly check-ins, conduct in-depth reviews of your strategy execution once per quarter. While monthly check-ins are brief reviews which focus on initiatives and measures that require attention and corrective actions. The purpose of the quarterly review is to monitor progress of the entire strategic plan in more depth, addressing progress of each initiative.
In order to conduct the quarterly review, plan for 2-3 hours to half-day to have sufficient time to cover the entire plan. Similar to the monthly check-in, participants must include the business owner, the most senior leadership team and the caretakers of the strategic plan and its initiatives.
While a strategic plan is typicallybuilt top-down, starting with long-term objective and goals of the business and then designing strategic initiatives and actions to get there. The review of the strategic plan is conducted bottom-up beginning with a review of key metrics and actions and then moving up to strategic initiatives and finally reviewing and confirming the long-term direction.
As such, the owners of each initiative report on the progress of their initiatives highlighting the following key points:
Objective and status of the initiative
Progress and achievements of the initiative to date
Challenges or roadblocks that need to be overcome
Next steps or next actions
Support needed from the leadership
The update of each initiative should not take longer than 10 minutes and should be crisp and to the point. Encourage the initiative owners to report openly and transparently on the status of the initiative. No sugar-coating or exaggerations. A simple one-page template for each initiative can help support initiative owners with their update and keeping things on track.
Depending on progress, the team agrees for each initiative on appropriate actions and countermeasures. Should any of your strategic initiatives hit major roadblocks, consider whether a pivot is needed. A pivot is simply a change of direction and the very reason why you conduct the quarterly review. Document any changes in your strategic plan.
As part of the initiative review, conduct a review of the needed resources to ensure that each initiative is well funded and able to achieve its objectives – especially when changes are needed. Again, make sure that the initiative owners are aware what is expected from them for the quarter ahead. Define clear caretakers and timelines for all agreed actions.
During the quarterly review, include a brief assessment whether your assumptions about the external environment and the internal situation of the business are still valid or whether anything has changed. Confirm that the long-term objective and goals are still in tact and achievable.
9. Communicate progress on execution and celebrate successes
An important part of strategy execution is keeping everyone in your business apprised of progress. Communicate frequently and openly to maintain clarity about the direction of the business and uphold momentum.
Include in your regular communication the following highlights:
Achievements/accomplishments to date
Challenges and countermeasures
Dashboard and traffic lights
Priorities for the upcoming quarter
Potential market news or changes in the external environment
In your communication, place a particular emphasis on celebrating successes! Make accomplishments as public as appropriate and reward the team for their achievements.
Make celebrations an integral part of your execution plan. Successes – large and small – build positive momentum for your strategy execution. Even small victories can be important to create confidence and solicit buy-in. Strategy execution is a movement and every successful step in the right direction helps.
A great way to provide a platform for successes and to reward the behaviors needed for the strategy to succeed is to create awards that are directly linked to the strategic initiatives.
For example, if sales growth is an important measure for your business, consider creating an award that celebrates the most successful customer projects or largest closed deals. If cost savings are critical for your business, reward cost saving ideas. You get the point: again measure what matters and reward the right behaviors that lead to success. And when you’re having success: celebrate!
Celebrate successes – large & small!
The importance of celebration cannot be underestimated. You don’t need to throw a major party every month – even though that can certainly help shape your company culture… A small nod to recognize a person or a team for reaching a milestone or delivering a project or achieving a goal can go a long way!
Regularly stop what everyone’s doing to celebrate successes: a closed deal, a new sale, a dollar saved, a target achieved. Buy a cake, invite the team for lunch, have flowers delivered, or simply write a “thank you”-note (hand-written notes will never go out of style!). The point is to catch someone doing the right thing and to create a joyful moment or postitive experience to recognize the success. Besides, celebrations are fun and a great team-building activity!
Celebrate your successes and speak about them. As my grandma would have said: do good and talk about it.
In order to communicate effectively, consider to publish a regular internal newsletter shortly after the quarterly reviews. Or consider sending a brief email update to the business after the monthly check-ins. Don’t leave your team wondering what’s going on and how the business is doing.
Here are a few examples that have served me well:
Internal newsletter devoted to strategy execution
Email updates from the business leader
Quarterly town halls or “all hands on deck” team meetings
Webcasts or video conferences for remote team meetings
Installation of a physical strategy execution board in the pantry or cafeteria
When it comes to strategy execution you almost cannot over-communicate. Be creative, involve your team. But whatever you do, communicate often, regularly and frequently, celebrate successes and take your team on the journey with you.
10. Keep in touch with initiative leaders informally
In addition to more formal monthly and quarterly reviews, keep in touch with initiative leaders informally. Be present, support execution, ask how things are going.
The key point here is to be available to initiative leaders, to lend support and to know what’s going on in the business outside of what’s formally reported in the monthly or quarterly reviews.
When you are well-connected and you know what’s going on in the business, you have the ability to sense when challenges are brewing or support is needed. Even in a very open culture, not everyone in your business may be comfortable to speak up or may know when to ask for help. By keeping in touch with your colleagues, you get to know when help is needed.
Keeping in touch with colleagues from all across the business also allows you to put into perspective what is being reported in the formal monthly or quarterly business reviews. You have a better understanding about the situation of the business and can take more meaningful and appropriate action.
Catch up informally
A great opportunity to keep in touch with initiative leaders informally is to “walk the shop floor” or engage in social activities. Invite your colleague for lunch or sit down over a cup of coffee. Create chance encounters in the pantry or cafeteria. Create opportunities for the initiative leaders to share information about their project, the progress they are making, or obstacles they are facing.
When you are having an informal chat, create an open and comfortable atmosphere. Ask open questions and let the other person lead the conversation.
Caution: do not micromanage! When you frequently check in with your initiative leaders, you may come across as controlling and micro-managing. Your colleagues need space to execute. Don’t be overbearing with control and oversight. Even though different people require different degrees of freedom to operate, nobody likes a micro-manager. When you micro-manage you effectively communicate that you do not trust the other person with completing the task. That’s the opposite of what you want.
So when you have informal encounters with your initiative leaders, focus on being available, focus on listening and go with the flow of the conversation.
11. Review your strategy once per year
Last but not least, the 11th secret to successful strategy execution is to review your strategy once per year. The purpose is to review the overall direction of the business and your strategy.
So once per year, gather your senior team to conduct an in-depth review of the external and internal environment, your objective and goals, your strategic choices, and the progress you have made thus far.
The purpose is not to re-invent the strategy every year. The purpose is to confirm that you are on the right track. Having said that, if your analysis shows significant changes in the external or internal environment or the progress of your execution, this is very much the time to revisit whether a change in direction is needed.
In my experience, devoting 1-2 days per year to this exercise is helpful. It’s an intensive workshop that requires good preparation and optimally the help of professional facilitation.
I like to schedule the annual strategic review in mid-year – typically July or early August. It’s a good time to take stock and to review your course before planning for the following year begins.
The strategic review follows the strategy process and revists in turn the situation of the business, the external environment, the internal environment, the long-term objective, the strategic choices and the strategic plan. In short, review where to play and how to win.
I can recommend from experience to follow this process for any business – large and small.
Strategic Process
When your analysis suggests that you are on the right track and that your fundamental assumptions about the market, your competitors, and your products & services hold up, the annual review should result in few changes.
When you see significant changes however, plan to take more time and to re-do the strategic process in more depth.
In any case, go through the full process every 3-5 years to re-cast your strategic direction and set sail to new horizons.
Winning at strategy and winning at business are not rocket science. However, companies fail time and again to execute their strategy and deliver the intended results.
Economic crises can be challenging times for all of us but a grave pandemic such as COVID-19 and the ensuing economic fallout are particularly damaging to small businesses. In steering through this crisis myself, I thought I would write down lessons learnt about how small businesses can survive and thrive through economic crises.
During times of crisis, small businesses must focus on what matters most: your people, your customers, and your cash flow. It is about survival first and then about being prepared to take advantage of the recovery thereafter.
While you are in the eye of the storm, the situation can be damning and it may seem like there is no end in sight. But hold tight and keep in mind that in every crisis there are challenges and opportunities. Here is what I learned during these difficult times and how you can succeed too.
In crisis, focus on what matters most
Whether your small business is hard hit or coasting through, at times of wide-spread economic crisis it is important to focus on what matters most: your people, your customers, and your cash flow – in that order. Everything else is secondary at this time. Nevertheless, look out for opportunities to benefit from the crisis.
Take care of your people
As the old adage goes, your employees are your most important asset. And it does sound like a cliche, but far from it. Your employees run the business. They are in touch with your customers. They make your products. They provide your services. For many small businesses, it’s the employees that make the business special. Take good care of your employees at all times – and especially during a crisis.
The crisis may be a major cause of concern for your employees. More than ever, it is important that you listen to your employees’ concerns and anxieties during a crisis. Will there be enough business to keep the lights on? How will the crisis affect their jobs? Will they be able to keep their jobs? Will I be able to earn a living and put food on the table? These may be just a few of their questions and concerns. Be receptive and empathetic to your employees’ worries and needs.
Your employees look to you for leadership, guidance and a steady hand that navigates the ship through the storm. Communicate as openly, transparently and as often as you can about the situation of business. Tell your employees about the health of the business, what you are doing to keep the business going, and what they can do to help. Be honest, truthful, and candid. Don’t sugarcoat things. Your employees can handle the truth. In fact, anything but the truth may cause further concern and further distraction.
At times of crisis, try everything you can to keep your employees. Whether your employees may have been with you for a long or a short period of time, they hold very valuable knowledge and skills about your business, about your customers and about your business partners. This is knowledge you don’t want to lose. And as you navigate through the crisis and prepare for recovery, you want to have your knowledgeable, skilled people around you to support a recovery out of the crisis as quickly as possible.
If your business struggles through the crisis and gets under cost pressure, cut all other costs first before considering layoffs. Explore all options and find ways to retain your employees. There may be measures available to cut costs that you haven’t thought of. Consider the following measures:
Stop discretionary spending: cut out all the extras, such as free snacks and other office perks. Stop any non-essential travel or entertainment expenses. Delay any non-essential business expenses such as software or hardware upgrades. Freeze bonuses and new hiring.
Offer unpaid leave: consider additional vacation time for employees. Even if it is unpaid, holiday time may be a good compromise instead of layoffs.
Reduced business hours: check feasibility to shorten the workweek or closing your shop early when foot traffic is slow. Reduce salaries in accordance with reduced work hours.
Temporary pay cuts: this may be a tough pill to swallow but is still better than layoffs. Make this measure temporary and allow employees to plan for it. This will go down much better if you as the business owner and the most senior leaders take a bigger pay cut than workers and front line employees. As the business owner, lead the way. Demonstrate that everyone’s in it and allow the broader shoulders to carry the larger load.
Work-from-home arrangements: see whether working from home would be a feasible way to keep the business running and cut expenses. Consider to sublease space that you don’t need or to negotiate a reduced office or shop rent.
Government support programs: I know this may not be popular or may require careful consideration. But check whether there are federal or local government programs available to you. Seek advice and check the fine print. There may be strings attached to accepting government money to retain employees.
Reduce contractors or part-timers: if all other ways are insufficient, consider reducing part-time hours or contractors first before considering employee layoffs.
Whatever you do, speak openly to your employees about the situation and that you need to take action. You are all in this together. Maybe you and your employees can jointly find ideas to cut costs or increase productivity that will take pressure off the business. It’s amazing what a joint brainstorm can do. Find solutions that work for everyone and that allow you to retain your employees. Besides helping the business through the crisis, involving your employees will foster greater trust and may actually boost morale. You will be surprised what is possible when everyone sticks their heads together to jointly find a solution.
When in crisis, making it through the crisis immediately becomes the top priority. When you are on the other side, you will need your employees to build the business back up and you will be glad to have them.
Take care of your customers
Whether you are in the B2B or B2C space, take care of your customers at times of crisis. It is in difficult times that true partners and reliable suppliers separate themselves from the rest.
Remember that it is your customers who you are in business for. They pay for your products and services. Their satisfaction ultimately determines your success – and how you steer through the crisis.
In an unprecedented crisis such as COVID-19 with stay-at-home orders and social distancing measures in place, customer behaviors can certainly change and customer needs may too. Demand for certain products or services may suddenly decline or shift to different offerings or channels.
Consider these consumer examples:
People no longer shop at the mall but purchase daily necessities online
People no longer go to movie theatres but watch movies at home
People buy fewer leisure products and luxury goods and instead buy more hygiene products and cleaning supplies
People do not dine out as much and instead cook at home or order home delivery.
While some of these changes may be temporary, others may have a longer lasting effect. For example, consider someone who has signed up for a home delivery service or an online streaming service during the crisis. Once this person has become accustomed to the conveniences, he or she might be reluctant to change back. If this applies to your business and you have seen your customers’ behavior change, don’t despair. What you still have in any case is the relationship with your customers. So lean in.
Similar to being there for your employees, be there for your customers – through thick and thin. Speak with your customers to understand their situation, their needs and their concerns. Identify ways how your business can help your customers through the crisis. This will strengthen your relationship and put you in the pole position to support your customer also during a recovery after the crisis.
Besides your ongoing business which led you to the supplier-customer relationship in the first place, look for new ways to support your customers or look for alternative business models to serve your customers. For example, are there other products or services you can help your customer with at this time of crisis? Can you shift your offering to another channel or media, e.g. online via webcasts, podcasts, or video conferencing?
Consider the real life example of training and development consultancy Glo Training in Hong Kong. Started in 2018 by Principal Instructor and business owner Gary Lo, Glo Training aims “to inspire and transform lives through creating unique learning experiences in 3 areas: personal growth, professional skills and coaching” (www.glo-consulting.institute). When the pandemic hit, corporate clients cancelled training and sent their employees into home offices. Gary adjusted and shifted his programs online. Since the start of the pandemic, Gary has provided more than 70 webinars and has recorded numerous online video courses. You can find Glo Training’s YouTube channel via this link.
In addition to serving your existing customers differently the way Gary has done, changes to your offering may allow you to pick up new customers who you weren’t serving before.
Imagine the fictional example of Tony’s Pizza I have written about in a separate article (see the Tony’s Pizza example here). Tony decided to transform his pizza parlor into an Italian family restaurant. During this COVID-19 crisis, Tony’s pizza delivery service with the added menu of the family restaurant may appeal to new customers who would previously not have ordered only from the pizza menu.
Take a look at your business and your existing customers. Audit yourself and check whether you can transform your existing business in a way that serves your existing customers differently and picks up new customers.
Ask yourself these questions. The list is non-exhaustive but might get your own creative juices flowing:
Can you provide your products and services to your customers online?
Can you turn your knowledge & expertise into a service for your customers?
Can you give your customers access to your equipment and machinery?
Can you mobilize your business from a physical shop to a business “on wheels”?
Find ways to keep in touch with your customers and remain a valuable partner and source of information, hope and courage also during the crisis. Remember that strong customer relationships come out stronger after the crisis when weathering the storm together.
Take care of your cash flow
Last but certainly not least, take care of your cash flow. When the crisis hits and the business stops in its tracks what matters most is liquidity, i.e. cash.
According to businessdictionary.com, liquidity is “a measure of the extent to which a person or organization has cash to meet immediate and short-term obligations” (source). And that is what it is about in a crisis: having sufficient funds to pay salaries, pay bills, and survive.
At any time really, but particularly during times of crisis, as a small business owner be the master of your cash flow. Closely manage your cash inflows and your cash outflows and aim to achieve anet positive cash flow. A positive cash flow means that your cash inflows are larger than your cash outflows. Hence, your cash balance increases.
Cash inflows
Your cash inflows are primarily the payments you receive from customers for the products and services you provide. In accounting terms, these are cash flows from operating activities. Cash inflows can however also come from bank loans or credit lines. These are called cash flows from financing activities. Finally, cash inflows can also come from investing activities such as selling assets including e.g. shareholdings, property and equipment.
During a crisis review all your cash inflows and identify assets that can be turned into cash most easily. These are usually accounts receivables and inventories which together make up your working capital.
Accounts receivables are your customers’ outstanding bills to you. Follow up with your customers and make sure you are getting paid. When a crisis hits, your customers may be similarly affected and might likewise require to manage their cash flows. Place an emphasis on bill collection to reduce the risk of bad debts.
If a customer has payment problems, work with your customer and agree on measures to get paid. Consider for example creating a payment plan in installments over time instead of a lump sum payment all at once. This might create just enough flexibility to help both you and your customer with cash flow.
In addition, try as much as possible to reduce your working capital by turning your inventories into cash. Inventories are your raw materials and in-process materials held for production and your finished goods held for sale to your customers. Review all your inventories and find ways to reduce them and turn them into cash.
For example, review aging or slow moving stocks and consider a promotion or sales event to clear them at reduced prices or discounts. Check whether you can bundle products and move slow-moving goods in combination with products that sell well.
Cash outflows
Your cash outflows can equally be categorized into operating, financing, and investing cash flows. Review all your cash outflows and identify ways to minimize your cash outflows at times of crisis.
Minimizing your cash outflows effectively means reducing your expenses and outstanding payments as far as possible. Review again the list from above for ways to reduce your expenses. Stop or significantly reduce:
Discretionary spending
Entertainment expenses
Business travel
External hiring
Avoid any non-essential spending at this time.
This may include your investing activities – review these next. If your business is capital intensive, there might be large opportunities to preserve cash from reducing capital expenditures. Investments may include the purchase of new equipment, machinery or other property. Check whether you can postpone these activities or avoid them altogether.
Next, review your accounts payable. Accounts payable are your open bills and invoices towards your suppliers (for sake of accuracy, accounts payable also count towards your working capital). These may of course also include interest expenses towards banks or other creditors.
Speak with your suppliers about payment extensions to postpone making payments. Make sure to discuss and agree on measures with your suppliers or partners instead of deciding unilaterally to delay or withhold payment. This may cause late fees or penalties – especially when dealing with creditors, utilities or government entities – which will increase the burden later. Instead try to make deals such as agreeing on payment plans (see above). You may be surprised how accommodating some of your partners might be. Just ask!
In any event, try to reduce any other expenses before you turn to your personnel expenses. As noted above, take care of your employees and work with them to make it through the crisis. There are several measures discussed above that might help you manage your cash flow without letting go of your people. Your people are your most important assets. Involve them in the process. Exhaust all your options before letting go of people.
One additional thought which might be a bit late if you are already fighting the crisis. Here it is anyway: If your business depends very strongly on your cash flow to run the business, then you want to make sure to have enough of a cash cushion to make it through a crisis. Jim Harmer and Ricky Kessler of Income School advocate for private persons to keep cash reserves that cover 3-6 months of expenses. They call this an emergency fund. The same holds true for businesses!
If you don’t yet have an emergency fund, consider creating one as soon as you can. This is cash you leave in the bank and that you don’t touch unless you have an emergency that requires you to tab into your cash reserves. If you have to use it, fill it back up as soon as you can. Again, as I said, it might be a bit late right now to build this fund if you are already in the crisis. But make sure to begin building such a cash cushion as soon as you can.
If you are hit hard by the crisis, try to avoid any cash out that is not essential to keeping the business running. Maintain a net positive cash flow to build a cushion that allows you to survive the crisis and come out stronger on the other end. When the situation improves you want to be able to use your cash to take advantage of the recovery.
Take care of yourself also!
One more thought: besides your people, your customers, and your cash flow, don’t forget to take care of yourself! Focus on your health and well-being and find time to reflect, recharge, and re-energize. Your business and your people need you at your best in times of crisis so invest the time that you need.
It’s easy to forget about yourself while being there for your team and keeping the business afloat. But just like on the airplane, when we are told to put on our own oxygen masks first before helping others, make sure you’re OK yourself so that you can help others.
When investing in yourself, consider both your mental health and your physical health. Make sure that you get plenty of sleep, eat well, and get sufficient movement. These times are stressful so make sure that your body and your mind are ready to cope. Your business needs you are your peak performance ability.
Conclusion
When in crisis, focus on what matters: your people, your customers, and your cash flows.
Focus first on survival and helping your business weather the storm. Then look out for opportunities to come out of the crisis stronger than you were before.
How are you managing through the crisis? Where do you place your focus? We’d love to hear from you. Feel free to drop a comment below. We hope you are healthy and well and are finding a way to cope. Take care!
Using the OGSM methodology for strategic planning is not rocket science. But with these top 10 OGSM tips you can vastly increase your chance of success.
Create the OGSM with your team
Focus on what you can influence
Conduct a SWOT analysis
Use the ‘what-by-how’ method
Choose no more than 5 strategies
Build your plan top-down
Review your plan bottom-up
Cascade the OGSM
Conduct monthly reviews
Renew OGSM annually
→ Want the full OGSM picture alongside these tips? The Complete OGSM Framework Guide covers all four components in depth, real-world examples, and a comparison to OKRs and the Balanced Scorecard.
Read on for a detailed description of each of these tips to simplify your strategy and deliver excellent results.
1. Create the OGSM with your team
“Two heads are better than one.”
I’m sure you have heard this old saying. When two people work together they are more likely to solve a problem than one person doing it alone. And I’m sure you have also experienced that teams are often more effective than individuals when they work together openly and collaboratively towards a shared goal.
The same holds true for strategic planning and using the OGSM methodology.When creating your strategic plan, assemble your team and jointly embark on the journey to design the future of your business.
Creating an inspiring, ambitious and effective strategic plan starts with asking critical questions about your internal and external environment. Such situational assessment is best performed when you bring in different points’ of view, different knowledge and skills and can challenge each other and your status quo.
Involving your team in the strategic planning process has an additional benefit. Involvement creates ownership and buy-in. By being involved in the strategic plan, your team will have greater understanding about the business’ situation, its future direction and how each and every team member can contribute to moving the business in the right direction.
Don’t create your OGSM in isolation. Engage your team. You will create a better plan and will have already taken a giant step towards achieving it.
2. Focus on what you can influence
Be proactive. Create the future that you envision for your business or for yourself. Take responsibility for your company and focus your strategic plan on what you CAN influence.
According to Stephen Covey’s bestselling book The 7 Habits of Highly Effective People, there are two circles: the circle of concern and the circle of influence.
Source: Stephen Covey, The 7 Habits of Highly Effective People
The outter, larger circle of concernis about the things we cannot influence, such as the weather, the economy, other people’s actions and opinions. People who live in this circle are said to be reactive. Reactive people complain about things outside their control. They do not take action or take ownership of the things they can control.
I’m sure you know someone like that. How often have you heard the following?
“Sorry, I’m late, but the alarm didn’t ring and then my shirt wasn’t ironed. I missed the bus and then I noticed that I had forgotten my staff card and had to go back…”
Possibly any person living in the circle of concern
In truth, had the person gone to bed earlier, prepared things the night before, set a second alarm etc. things might have gone differently.
The inner, smaller circle of influence is about the things we can influence, such as our attitude, our preparedness, the skills we learn, the habits we develop, where we focus our time and energy. People who live in this circle are proactive. These people realize that their decisions determine their lives and not their outter conditions. Proactive people do not complain about what they cannot control but focus their energy on what they can control.
For your strategic plan, focus on what you can control. Do analyze the external environment in which you operate. And then create a strategic plan that leverages your organization’s core competencies and directs your resources towards the actions and behaviors that lead you to success.
3. Conduct a SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis is an assessment of your internal and external business environment. Strengths and weaknesses are internal to your business, opportunities and threats are external to your business.
The SWOT analysis is a simple but powerful method to gain critical insights into your business and your situation.
This is what a SWOT framework may look like:
Strengths: – … – … – …
Weaknesses: – … – … – …
Opportunities: – … – … – …
Threats: – … – … – …
Simplified SWOT framework
Build your strategic plan around your strengths. Aim to use your strengths to take advantage of your opportunities and to mitigate your threats. Seek to improve the weaknesses that would prevent you from achieving your strategic objectives.
Here’s how you use the SWOT in your strategic planning discussion.
In your team, discuss your business’ core strengths and most prominent weaknesses first. Be candid in your assessment and openly debate your findings. Select your top 3-4 strengths and top 3-4 weaknesses and write them down.
Then identify the top opportunities and threats your business is facing. Again, consider different points of view and weigh the various insights you have. Document the top 3-4 opportunities and top 3-4 threats.
Consider customer feedback or employee satisfaction survey results if you have them. They can be valuable sources of information.
Afterwards, conduct a “crossover analysis” by creating pairs between your strengths and your weaknesses, opportunities and threats. Use the pairs to formulate your strategic initiatives.
When writing your objective statement, your strategies, and your measures, deploy the ‘what-by-how’ method.
According to van Eck & Leenhouts’s excellent book The 1-Page Business Strategy, the ‘what-by-how’ approach splits the objective or strategy statements into two parts: the ‘what’-part and the ‘how’-part.
The ‘what’-part states what you aim to achieve. The ‘how’-part states how you are going to achieve it. This makes the statement clear and actionable and begins making choices – which is what strategy is all about.
Let’s consider the following simple example: “Go to London by boat”. The first part “Go to London” is the ‘what’-part, the second part “by boat” is the ‘how’-part. If the objective only stated “Go to London” then the organization may not be clear what is expected of them. Some people may go book airplane tickets, while others may start refuelling their cars. Including both the ‘what’ and the ‘how’-part gives clarity and direction to the team and aligns the organization.
5. Choose no more than 5 strategies
Strategic planning is all about making choices. It’s about the choice of where you are going and how you are going to get there. It’s about the choice of how to spend your time and your money to achieve your objective and goals.
When you set the vision for your business and decide on your objectives and goals, there are virtually infinite ways to achieve them. However, since resources are not infinite (unless you have discovered the fountain of youth…), you need to pick and choose the path that will take you to your destination.
When creating your strategic plan, I’d like to advocate to choose three to five strategies to achieve your objective. Why 3 to 5? Fewer strategies allow you to focus your energy and resources on those initiatives with the highest impact and highest chances of success. At the same time, you don’t want to put all your eggs in one basket in case a strategy fails or the environment changes.
Developing your strategy using the OGSM metholodoloy is typically a top-down process. You start with your strategic context and your situational analysis to set your objective, followed by the goals, the strategies, and the measures.
The objective is the destination of your business – what you aim to achieve over a chosen timeframe. This timeframe is typically 3-5 years for strategic planning or 12 months for annual operating planning. The objective is a qualitative statement describing the future destination.
The goals are the qualitative translation of your objective statement. Goals are typically SMART goals to make them clear, measurable and unambiguous.
The objective and goals jointly describe what you aim to achieve.
The strategies are the major initiatives that will take your business towards the objective and goals. These are qualitative statements about how you will devote your organization’s resources to achieving the objective.
The measures are the detailed metrics and actions that quantify success and determine progress of the strategies. The measures clarify who does what and by when to execute the strategic plan.
The OGSM is a logical flow and each ensuing step builds on the decisions of the prior step from top-to-bottom and left-to-right.
While you build your OGSM top-down, you review your OGSM bottom-up.
Start your review with your Measures. Review your initiatives and your metrics and check where you are behind expectations. Direct your attention first to those initiatives which are not meeting their commitments. Then review the remaining initiatives.
Then move yourself up to the Strategies and confirm that you are overall on track to achieving your business’ objective and goals.
Where needed discuss countermeasures and agree on actions in the team.
During your review, regularly check your external environment for changes that may influence your ability to execute your OGSM and achieve your objective and goals.
The Merriam-Webster dictionary defines a ‘cascade’ as “something arranged or occurring in a series or in a succession of stages so that each stage derives from or acts upon the product of the preceding” (source).
In business, “cascading” a strategy means arranging the strategy along the organization’s hierchary so that the organization is fully aligned behind the organization’s objective and works together to achieve it.
The OGSM methodoloy is a great way to cascade your business strategy. The approach to define objectives, goals, strategies, and measures lends itself excellently to cascading the strategy vertically and horizontally.
Vertical cascading means breaking down the strategy from a higher level of the organizational hierarchy to a lower level.
For example, the corporate strategy is broken down into the divisional strategies or the divisional strategy into departmental strategies. Cascading means that the individual lower level strategies together roll back up into the higher level strategy. Hence, successfully achieving the divisional strategies would result in the successful delivery of the corporate strategy.
Cascading vertically
Horizontal cascading means breaking down a business strategy into the various functions that work together to deliver the business strategy.
For example, a divisional strategy is broken down into the sales & marketing strategy, production strategy, sourcing strategy and people strategy. Again, delivery of each of the functional strategies would ensure that the overall business strategy is achieved.
Cascading horizontally
In practice, cascading a strategy is typically a mix of vertical and horizontal cascading. The important part is that the strategies perfectly align to ensure that the organization works together to achieve the overall business objective and goals.
One more thing: as you can see in the illustrations above as well, cascading strategy is a reiterative process. The higher level strategy gives input to the lower level strategy. And it also receives feedback and modifications based on realities in the business, feasibility, and availability of resources.
This reiterative process is important to align the strategy and make it realistic.
9. Conduct monthly reviews
When executing your OGSM, it is important to conduct brief monthly reviews to track your progress. During the monthly reviews, focus on your measures and actions. Check which initiatives are on track or where you are falling behind. Direct your organization’s attention towards those initiatives which are behind expectations and formulate countermeasures.
Make sure to capture the actions discussed with clear caretakers and timelines for appropriate follow up to correct the course where necessary.
It really helps to implement a ‘traffic light’ system to track your OGSM. Ahead of the OGSM review, color the initiatives that are ‘on track’ in green, the ones that ‘need attention’ in yellow and the ones ‘at risk’ of missing its targets in red. Then during the session, jump to the red and yellow traffic lights first to identify root causes and decide on countermeasures.
For best practice, build the monthly OGSM reviews into your company’s regular schedule. In fact, integrate strategy implementation into your organization’s culture and make execution and meeting commitments your habit. And remember, execution culture starts at the top!
Once a year, conduct a strategic planning workshop to overhaul your OGSM for the coming year.
In your annual OGSM renewal session, address the following questions:
What’s working? What’s not working? Review your OGSM from the current year and critically assess where you have been successful and where you haven’t.
What’s changed? Re-scan the internal and the external environments and seek out any changes that will have an influence on your business and its ability to live its mission and achieve its vision.
What do we need to add? What do we need to take out? Identify strategies, initiatives, resources or capabilities that your business needs to eliminate, reduce, raise or create to sustain success or become more successful.
By revisiting your existing strategic plan and building onto it, you are developing a continuous storyline in pursuit of your longer-term vision instead of re-inventing the strategy every year. Your team will thank you for painting a consistent picture over time.
This doesn’t mean you shouldn’t make significant changes if this is required. In case there are drastic changes in your external environment or inside your business, you certainly need to (re-)act accordingly. In that case however instead of conducting an annual OGSM renewal exercise, go for a more fundamental strategic review.
When is the best time to renew your OGSM? This may differ from business to business. In my experience a good time to renew the OGSM is during your annual budgeting process. Setting your financial goals for the coming year shouldn’t happen in isolation but should directly be linked with the actions you plan to take to achieve those goals.
Unfortunately, that’s exactly what many businesses do: they run a complicated financial budgeting process and only later plan their activities (if at all). Don’t be one of those businesses.
When you conduct your annual OGSM review, assemble your team, run a 2-3 day workshop, and work through the questions above together. A great way to do this is to refine your SWOT analysis. Use your findings to review your objective, set new goals, translate these into 3-5 strategies and set 2-3 measures for each strategy. Cascade the reviewed OGSM throughout your organization and finalize all strategic plans prior to the beginning of the next year.
In my experience, if your longer-term business strategy doesn’t change, the annual OGSM does not change drastically either. I usually revist my objective to set a particular focus for a year and re-align my goals and strategies accordingly. But the most changes happen in the measures where I set specific actions for a given year as I drive execution towards the longer-term objective and goals.
There you have it. These are our top 10 OGSM tips.
We hope you find these tips useful in helping you to simplify your strategy and deliver excellent results. If you have any questions or comments, why not drop us a line below? We’d love to hear from you.
See These Tips in Action: OGSM Examples by Industry
The best way to see how these 10 tips apply in practice is to look at real OGSM examples across different business contexts. We’ve built out detailed examples for four industries — each one illustrating how a different type of organisation applies the framework, makes strategic choices, and builds an execution plan around its measures.
OGSM Example: B2B SaaS — a pipeline analytics company using PLG, enterprise CS, and ABM strategies to scale from $2M to $8M ARR
OGSM Example: AI Startup — a Series A document intelligence company building a repeatable sales motion and deepening product-market fit in the legal sector
OGSM Example: E-commerce / DTC Brand — a sustainable home goods company reducing paid acquisition dependence while improving contribution margin
OGSM Example: Non-Profit — an education foundation aligning programme growth, funding diversification, and impact measurement into one strategy
OGSM Example: Tony’s Pizza — the classic OGSM case study, illustrating all four components from objective to measures
A plan is only as good as its execution. And to keep up with execution of your OGSM, it’s important to conduct timely and engaging review sessions to stay on track. But with a full schedule of meetings already in the calendar, how do you make the most of your OGSM review?
When conducting a monthly OGSM review, invite your senior team to a 60-min meeting in which to review the OGSM from bottom to top. Review your Measures’ key initiatives and metrics first and then move up to the Strategies. Discuss countermeasures for those initiatives ‘at risk’ or which ‘need attention’. Take down all agreed actions for follow up.
This monthly review is however not only a meeting. It requires some preparation up front and diligent follow up thereafter. Here’s how you get the most out of your monthly OGSM review.
Monthly OGSM Reviews
When using the OGSM methodology for your annual operating plans, it is important to conduct monthly reviews to keep on track with execution.
The reason I propose a monthly review cadence (instead of quarterly for example) is to have the ability to act and respond timely to implementation progress (or lack thereof) in your senior team. This allows you to make timely decisions to double-down on what is working and pivot on what is not. Doing this only once a quarter may put the plan at risk as countermeasures may not result in desired outcomes in time.
Plan Ahead
In order not to miss a session, I like scheduling out all monthly reviews ahead of time. Go ahead at the beginning of the year and send out recurring invitations for 12 sessions. That way they are in the calendar ahead of time and do not get in the way of day-to-day scheduling difficulties.
Having all 12 sessions scheduled out also allows you and your team to plan ahead and prepare. A well-prepared OGSM review is significantly more effective than if people need to rush an update on short notice. If the OGSM review is every second Tuesday of the month for example, there are no surprises when the next one comes around.
Speaking of preparation, in my experience it really helps to have an OGSM caretaker who keeps the document current and helps prepare for the reviews. This caretaker updates the financials and key figures ahead of the review meeting and reminds strategy and initiative owners to provide their updates directly on the OGSM document (see image below).
OGSM Template with Update Section
Go into the meeting with an updated and current OGSM document.
An important word about status colors
On the OGSM document, record the status of each initiative and a brief update comment incl. proposed countermeasures (as necessary). For status, I typically use the following color-coded setting which has served me well:
Status Update Colors
Color
Status
Description
Light Green (LG)
On Track
Item is in progress and on track to achieving it’s targets.
Dark Green (DG)
Completed
Item is done and targets are met.
Yellow (Y)
Needs Attention
Item needs attention by the organization or its senior team in order to stay on track and not fall behind.
Red (R)
At Risk
Item is at risk of missing its targets and needs urgent attention and action.
Blue (B)
On Hold
Item has been placed on hold, postponed or deprioritized.
Regarding the color-coding, I always emphasize that these status settings are meant to be forward-looking and action-oriented and not punitive. A red color is not bad by itself. It does not mean that someone is getting fired. Encourage your team to use ‘yellow’ and ‘red’ statuses to signal that urgent action is needed.
We have become so accustomed that ‘yellow’ and ‘red’ on business reports are bad. What a bunch of baloney. Take active steps to take your team’s fear from using ‘yellow’ and ‘red’. Emphasize that these are signal colors to direct attention to where it is most needed. Nobody gains from beautifying or hiding the true status of an initiative just because we are trained to prefer to see ‘green’.
Good! Now that we got that straight, let’s dive into the OGSM review itself.
Rundown of the OGSM review meeting
A monthly review is not an in-depth strategy review but a monthly check-in to make sure your plan is on track. I have found a duration of 60 minutes most effective. One hour is long enough to review the performance indicators, identify key issues and decide on countermeasures. It is also short enough to make it a monthly staple without taking too much time out of operations. A concise 60-minute session keeps the group engaged and the OGSM on track.
During the monthly OGSM review, follow a structured agenda that guides the team through the review process.
Start with a review of the financials and key performance indicators. Identify where you are on track and where you are lagging behind expectations. Discuss in the team what the drivers of performance are and identify the reasons for missing the mark.
Then review the individual Measures starting with those which are behind expectations. Follow the colors. Begin with the ‘red’ initiatives, followed by ‘yellow’.
Initiatives marked ‘red’ are at risk and need urgent attention and action. Identify why you are behind. Discuss in the team effective countermeasures that you can take to adjust the course and get back on track. Agree on the actions to be taken by whom and by when and record the actions on an action item list. Then move on to the next item.
Let me pause here for a moment. That was brief but important! The whole purpose of doing the OGSM review is to identify where you are behind, why you are behind and to correct the course. So be candid and thorough here. The purpose is not to assign blame or search for fault. You are looking to identify where improvement is needed and then go do it.
Reasons why a measure is behind might be numerous: the external environment has changed, customer needs have changed, competitors are more effective, the action is not well-resourced, the team does not have the knowledge or skills needed to succeed, other unforeseen hurdles or challenges are preventing the team from making progress.
As with the color-coding above, when you are in session, create an atmosphere that invites the team to be candid and direct. You want everyone to be as straight as an arrow.
After all ‘red’ and ‘yellow’ items are discussed, review the ‘green’ initiatives which are on track. Check whether any major milestones are coming up or decisions are needed. Only discuss those ‘green’ initiatives worth discussing.
With 10 minutes left in the meeting, wrap up the initiative review and confirm all the countermeasures and actions agreed on in the meeting. Double-check that each action has a caretaker, a timeline, and that everyone is clear about the expected deliverables. Take note of all actions on the action item list.
At the 60-minute mark, thank everyone for their contributions and their constructive review before closing the meeting.
Follow up
After the OGSM review session has ended, send a short note to all participants and OGSM stakeholders. Confirm the OGSM as it was discussed and share the action item list for everyone’s information and action. Now the focus shifts back to operations, executing your OGSM and implementing the agreed corrective actions.
Until the next monthly review.
What does the agenda of a monthly review meeting look like?
For easy reference, this is what the agenda of a monthly OGSM review meeting might look like. Feel free to copy this out and into the invitation of your monthly OGSM review meeting.
Time
Topic
Caretaker
10 min
Review Financials & key Performance Indicators
Business Leader or OGSM Caretaker/facilitator
10 min
Review actions from previous OGSM review
OGSM caretaker/facilitator
20 min
Review initiatives ‘at risk’ and ‘need attention’ and discuss countermeasures
Initiative owner
10 min
Review ‘on track’ initiatives
Initiative owner
10 min
Confirm actions from this OGSM review
Business Leader or OGSM Caretaker/facilitator
Meeting adjourned
Sample Agenda of a Monthly OGSM Review Meeting
When to schedule a monthly review?
There is no hard or fast rule when to schedule a monthly review. I have found it most useful to schedule the meeting in the second week of the month. By the second week, you may have had a chance to review the financials from the previous month and update the OGSM document.
Getting the OGSM review done in the second week of the month then leaves the rest of the month to focus on operations and drive execution.
Consider picking a fixed day for your regular reviews, for example every second Tuesday of the month. Then your team can build a regular rhythm about the review and there is no surprise when it comes around.
Schedule out all 12 monthly sessions at the beginning of the year. Most calendar software such as Microsoft Outlook or Google Calendar allow you to set recurring invitations identifying the chosen day of the month. That makes scheduling the meetings easy and straightforward. Include the agenda in the invitation so everyone knows what to expect ahead of time.
What is the difference between a monthly and a quarterly OGSM review?
I like to make a clear distinction between frequent monthly OGSM reviews and more thorough quarterly OGSM reviews.
As described above, the purpose of the monthly OGSM review is to track the execution of the measures and to agree on corrective actions for those initiatives which are ‘at risk’ or ‘need attention’. The discussion is brief, candid and solution-oriented. The monthly OGSM review only takes about 60 minutes.
The purpose of the quarterly OGSM review is a more in-depth review of the OGSM to confirm whether the business is on track to achieving its overall objective and goals.
For the quarterly OGSM review, I schedule a 2-3 hour session (based on progress) which reviews each initiative and strategy. Each initiative owner provides an update on progress, milestones, challenges, and next steps.
The review includes an assessment of each strategy to confirm that the path chosen is still the right one to move the business towards its overall objectives.
If required, countermeasures are discussed and agreed on. As during the monthly review, all actions are recorded with caretakers and timelines.
How to create an OGSM for your business?
We have now been speaking about implementing your OGSM and keeping on track with your execution via monthly review meetings. But how do you actually create an OGSM in the first place?
The purpose of the monthly OGSM review is to ensure that the implementation of your plan is on track. The review starts with preparation already before the actual meeting.
Prepare all key figures and status updates prior to the OGSM review meeting to facilitate an effective session.
During the meeting, address those initiatives first that are “at risk” or “need attention”. Identify root causes and agree on countermeasures.
Record all action items, caretakers, and due dates and ensure diligent follow up after the meeting.
What experiences have you made with your OGSM review? If you liked this article or have any questions or comments, why not leave us a reply below? We’d love to hear from you.
OGSM stands for Objective, Goals, Strategies, and Measures and is a simple but sophisticated approach to strategic planning. Using OGSM allows you to define on a single page what you aim to achieve and how you are going to achieve it.
When using the OGSM approach to strategy, there are things you can do to vastly improve the effectiveness of your strategy. There are however also a few things to avoid in order not to undermine the advantages of OGSM.
Not yet familiar with the framework itself? The Complete OGSM Framework Guide covers all four components, how they connect, and common pitfalls — a good starting point before these dos and don’ts.
Here is our list of Dos and Don’ts of OGSM from our experience over the past decade. We will continue to update this list as we learn over time.
Dos of OGSM
Introduce the OGSM: If you intend to deploy the OGSM approach to strategy, plan to take time to introduce the tool and it’s pros and cons so people are familiar with the methodology. We can help: read more about OGSM here.
Involve your team: if you have team members, involve them in the strategic planning process to receive their input and expertise. This also helps to create understanding and clarity in the team early on what strategic priorities are.
Get leadership involved: if you deploy OGSM in your business, make sure your senior leadership is aligned with your objective, goals, and strategies. Involve them early and check in along the way.
Conduct OGSM workshops: in our experience it is most effective to deploy the OGSM method in a strategic planning workshop. Learn more about such workshops here. Consider going off site where you are uninterrupted and free to think strategically.
Take sufficient time for discussion: when creating the OGSM, allocate enough time to allow for open discussions and reflection. In our experience, strategies that arise from candid strategic discussions are far more effective.
Include an external perspective: when creating your strategic plan, seek an outside-in perspective. Learn what customers, suppliers, partners think about your business.
Set a clear timeframe: be clear about the time frame for your strategy. Are you planning 3, 5, or 10 years ahead? Are you creating an annual operating plan for one year? Make sure that your objective, goals, strategies and measures align with this timeframe.
Be specific: use language that applies solely to your business and your situation and leaves no ambiguity or room for interpretation.
Use the “what-by-how” format: When writing your objective, strategies, and measures, use the “what-by-how” format to incorporate in one statement “what” you intend to do and “how” you intend to do it. This makes the statement much more clear and makes it easier to take action. Learn about the “what-by-how” method in this short YouTube video.
Create SMART goals: make sure your OGSM goals are specific, measurable, ambitious, realistic, and time-bound. Do include financial goals. Learn more about how to set clear goals here.
Create goals for the “what” and “how”: define SMART goals for the “what”-part of the objective and the “how”-part. This defines both the success of the destination and keeps track of your progress in the right direction. Learn more about the “what-by-how” method in this short YouTube video.
Limit yourself to 2-3 initiatives per strategy: Similarly, limit yourself to only 2-3 high impact actions or initiatives per strategy to allow sufficient focus without putting all your eggs in one basket. Read more about how to set effective measures for OGSM here.
Split measures into metrics and initiatives: we have found it very helpful to distinguish each measure into SMART metrics and an action plan.
Test your strategies and measures: check for clarity, sufficiency, alignment and resource sufficiency.
Assign owners: assign an “owner” for each strategy. This person is accountable that the strategy is being implemented but may not necessarily be responsible for all actions.
Keep the OGSM simple: OGSM is a straight-forward approach to strategic planning. Keep it neat and tidy and restrict yourself to one clear objective statement, few meaningful goals, 3-5 strategies and 2-3 measures per strategy.
Ask tough questions: be candid and realistic about your business, its situation, its strengths and weaknesses. Have the courage to be critical.
Resource your OGSM: make sure you have the resources available or can build them in time to successfully execute your OGSM. Resources means funds, knowledge, and skills.
Agree on a governance process: Confirm at time of OGSM creation how you will follow up on execution. Set a cadence of e.g. quarterly reviews for 3-5 year strategies and e.g. monthly reviews for annual operating plans.
Schedule all reviews in advance: fill the calendar with all review meetings ahead of time for the duration of the year. Make the meetings mandatory for the business team responsible for execution.
Check in regularly: during OGSM implementation, check in regularly with your team on progress of each initiative – during formal reviews and “offline” in between. Make sure they have the information and resources they need to succeed.
Use OGSM for communication: the OGSM format lends itself well for communicating your strategy. The OGSM shows where you are heading and how you are going to get there. All priorities on a single page!
Make the OGSM transparent: allow everyone in your business to see the OGSM to understand what the priorities are and how everyone can contribute to achieving the business’ objective and goals.
Practice! Practice makes progress. We have learned the OGSM approach over many reiterations. We realized how the plans and their execution got better and better over time.
Follow through: the success of your OGSM and your strategic plan depends entirely on how it is executed and followed up on.
Don’t use OGSM for the sake of using OGSM: be meaningful about selecting the strategic planning approach that works best for your business.
Refrain from generalizations: Avoid platitudes that could apply to any business or any time. Make the OGSM specific to your business and your situation.
Don’t create the OGSM in isolation: top-down strategies often lack commitment and buy-in. OGSM works best when created and executed in the team and with clear strategic context. Anchor the OGSM in your business processes as described in these top 10 OGSM tips.
Don’t skip a step: OGSM is most effective when O-G-S-M are all addressed in order from left to right. Don’t just go through the motions but sufficiently address each step.
Don’t keep the OGSM a mystery: be open about the OGSM methodology and what the OGSM for your business looks like. Transparency wins! This is one of the ways you avoid the 7 deadly sins of business strategy.
Don’t delegate responsibility for the OGSM: the OGSM should be the strategic plan for the entire business and should be owned by the business leader. It may help to have a facilitator who reminds people of their commitments. But the overall responsibility must be with the business leader and the leadership team to avoid strategic failure.
Avoid perfectionism: Don’t get lost in details about the looks or the wording of your OGSM. Make sure that the statements are clear and unambiguous but then move on. It’s more important to execute than to reiterate the wording.
Don’t forget to execute! The OGSM or any strategic plan is only that: a plan. Use the approach to drive execution in your business.
Don’t cascade too far: Avoid creating individual OGSMs for every organizational hierarchy or every individual employee. OGSM is most powerful when it captures the overall priorities of a business or a function.
Don’t debate methodology: refrain from discussing the strategic process itself and rather focus on content and what the realities of your business are. Agree on the approach and then execute it.
Don’t forget to celebrate successes! Celebrate every initiative, every action, and every progress towards achieving your overall objective and goals.
Don’t compromise: when making strategic choices, avoid compromising if you are in disagreement. Make hard choices. Strategies need to be sharp and clear. No one wins when resources are spread too thinly to be effective.
Don’t create individual plans: avoid creating disconnected strategies in your business. Connect and align the strategies towards your overall objective and goals.
Don’t be afraid to hire external help: OGSM is simple but having an experienced facilitator or consultant can help move the business along the learning curve faster.
Don’t rush strategic planning: ensure you have sufficient time to prepare for a strategic review. Collect data, seek input from key stakeholders, and create a setting that allows strategic thinking. Plan a strategic workshop to run a structured strategy process.
Don’t confuse strategy with operations: avoid mixing day-to-day operations with the strategic initiatives that drive change and move your business towards its overall objective. Avoid including in the OGSM the activities that belong in a job description.
Don’t forget the action plan: each initiative under measures must have a caretaker, timeline and clear milestones. Ensure accountability and deliverables are clear.
Don’t include ‘nice-to-have’ initiatives: focus your OGSM on the ‘must-have’ strategies and initiatives to achieve our objective. Avoid including ‘nice-to-haves’ and running the risk of losing focus.
Don’t give up on your plan too easily. Things might change in the external environment or inside the business. Don’t fold your OGSM too quickly but regularly review its implementation. Pivot where needed, but stick to your guns.
Ready to put these dos and don’ts into practice? Start with the right tool. The OGSM Template Bundle gives you both the PowerPoint and Excel OGSM templates in one download — pre-formatted, fully customizable, and available at just $7.99 (save 20% vs. buying separately).
See These Principles in Action: OGSM Examples by Industry
The dos and don’ts above are most powerful when you can see them applied in context. We’ve built detailed, worked OGSM examples for four industries that illustrate how real organisations apply these principles — including where the common mistakes show up and how to avoid them.
OGSM Example: B2B SaaS — a pipeline analytics company scaling from $2M to $8M ARR, with explicit trade-offs in each strategy and a full measures table linking actions to owners
OGSM Example: AI Startup — a Series A company showing how to focus on one segment rather than spreading across all verticals — one of the most common don’ts in practice
OGSM Example: E-commerce / DTC Brand — a sustainable home goods company whose OGSM forces the hard conversation about SKU rationalisation and owned vs. paid growth
OGSM Example: Non-Profit — an education foundation whose strategy addresses both programme reach and funding sustainability — neither in isolation
OGSM Example: Tony’s Pizza — the classic OGSM case study, still the clearest illustration of how all four components work together
When using the OGSM approach to strategy, I often come across the question of how many initiatives a strategy should have. In the following, I summarize what works best in my experience.
When developing the implementation plan for your strategy, define about 2-3 initiatives per strategy. This gives sufficient focus without relying too heavily on a single action without alternative.
There are a few things to look out for however when selecting the initiatives to implement your strategy. I’ll provide an approach to selecting and testing your initiatives below to ensure that the 2-3 initiatives you pick are the right ones.
Defining the initiatives to implement your strategy
A good strategic plan not only describes clearly what you are aiming to achieve. It also describes how you are going to achieve it. The OGSM methodology allows you to describe your strategic plan on one page detailing out your objective, your goals, your strategies and your measures. The objective and the goals together define what you intend to achieve. The strategies and measures together define how you are going to achieve it.
Once you have defined your objective, your goals, and your strategies, you begin thinking about your implementation plan – your measures. I like to break down my measures into two parts: metrics and initiatives.
The metrics are the quantifiable targets and performance indicators that define success for each strategy. The initiatives are the actions and projects that will drive implementation of the strategy and lead you to success.
The reason I like to separate the two is clarity. When I first started using the OGSM approach about a decade ago, I noticed how my team and I often used “measures” and “metrics” interchangeably to describe the “M” in OGSM. We were wondering what the difference was and whether it made a difference at all. It did!
We understood measures quite literally to be things that we’d “measure”. Hence the metrics. So we defined a number of metrics for each strategy and left it at that.
However, during implementation during the year, we noticed that we were not quite sure whether we were on track to achieving the metrics by year end. We took a run rate (i.e. a lucky guess really as it didn’t account for seasonality) and figured that we must be about on track. Anyway, in the end things always work out, right?
Wrong. We had no clue. We were missing a clear articulation of what we needed to do to turn the strategy into reality and check whether we were on track or not. We needed a clear translation of the strategies into measures which included both metrics and an action plan. The metrics would allow us to track progress and keep us on track and the action plan would clearly articulate what had to be done by whom and by when to achieve the metrics.
From then on out, we always defined measures as both metrics and initiatives.
So then how many initiatives are right?
In the first couple of years that we split metrics and initiatives in our annual operating plan, our OGSM was basically a large action plan. We probably had about 5-8 actions per strategy – sometimes more than 10. All actions started in January, ran in parallel and ended in December. So across the entire OGSM with 1 objective, 6 goals, 4 strategies and about 5-8 measures per strategy, we ended up with close to 30 actions! This was not only a massive effort to implement, it was a massive effort to keep track of! We didn’t know better and proceeded.
It quickly became clear however that this was not going to be effective. Our OGSM reviews took 8 hours every month. We were committed to action and accountability and wanted to go through each initiative and confirm we were on track. When we weren’t, we wanted to know why and what we had to do to get back on track. With close to 40 initiatives one year, this took forever.
We had noticed that many of the initiatives we tracked were actions we had to do anyway during daily operations. We defined actions such as “visit 10 customers per quarter”. The action was specific, measurable, ambitious, realistic and time-bound. It was however also exactly what was expected of our customer service team anyway during a typical sales process.
We had also noticed that we described different actions under different strategies that actually contributed to the same projects. For example, one strategy had to do with driving growth, another strategy had to do with innovating. We noticed that we duplicated several initiatives that were counted under growth and under innovation. We were looking at the same topics over and over again just from different perspectives. That was redundant and a waste of time. So the following year we changed our approach.
In order to streamline our annual operating plan, we decided to define no more than 2-3 initiatives per strategy. Two or three initiatives per strategy meant we had max 12 initiatives overall, which was plenty for my team to handle. And we immediately noticed a change in how we implemented.
We were much more focused. Fewer initiatives allowed us to allocate more resources for each initiative. It became easier to keep track of our OGSM. And it was easier to communicate and remind each other what was important.
We were much more effective. We noticed that greater focus led to greater achievement of milestones and progress towards our goals and objectives. We had to put things on hold less often or pivot to change our approach.
We were much more efficient. We noticed that we spent much less time reporting and discussing progress updates of the action items. Monthly reviews were much more efficient and took less time.
We were much more successful. When we conducted our year-end review and looked at our achievements, a couple of colleagues were quick to point out that they felt our success was directly linked to our much more focused execution. This felt really good!
Since then, I always guide my teams to define no more than 2-3 initiatives when designing the measures for the OGSM. This avoids building a laundry list of actions. Instead, fewer initiatives keep the team on track, allow greater concentration of resources for each initiative, and vastly increase the chances of success.
How do I select my initiatives?
OK, got it. So I am only supposed to choose 2-3 initiatives for each strategy. But how do I choose those initiatives? How do I know which ones are the right ones? Excellent, those are the right questions. Unfortunately there is no hard and fast rule. But this is what has worked well for me.
During the strategic planning process, I conduct a SWOT exercise for my business. In the team, we reflect on our core strengths and our biggest weaknesses, we look at the most promising opportunities and the largest threats. We do this by conducting an internal assessment but we also use our customer satisfaction feedback to get an external perspective. This gives us valuable insights into what we need to do differently. The SWOT informs our strategies and then the detailed initiatives with which we implement our strategies.
The SWOT analysis is probably my primary source for initiatives. In addition, we may conduct a brainstorming exercise with a cross-functional team to come up with additional ideas. All ideas are then ranked based on cost vs. benefit or impact vs. complexity. We choose those initiatives with the largest impact towards our metrics and goals with the smallest strain on resources.
After you have chosen your initiatives, write the initiatives in the ‘what-by-how’ format. This means structuring the sentence that describes the action in two parts: the ‘what’-part and the ‘how’-part. The ‘what’-part describes what needs to get done. The ‘how’-part describes how it will get done. Here are a couple of simple examples:
Win new customers by launching a targeted social media marketing campaign
Save costs by combining trips wherever possible
These are just examples to illustrate the ‘what-by-how’ method. I first learned about the ‘what-by-how’-format from the practical OGSM guide “The 1 Page Business Strategy” by Van Eck & Leenhouts. It’s a great way to write your initiatives as clearly and measurable as possible. Make them unambiguous. Leave nothing to chance.
Finally, make sure that each initiative has a caretaker and a clearly defined timeline and milestones. Ask the caretakers whether they understand what is expected of them. Ask them to describe their initiative in their own words. Clarify when and how you expect them to report on progress and what successful delivery looks like. Check whether they have the resources, knowledge and skills to be successful. Remember, nothing gets done unless accountability is clear and caretakers buy in.
How do I test my initiatives?
After you have selected the initiatives for your strategic plan, conduct a test to check whether the initiatives are indeed the right ones. Do four checks:
Check for alignment
Check for sufficiency
Check for clarity
Check for resource sufficiency
Check for alignment to ensure that each chosen initiative directly supports implementing the strategy and achieving the desired goals and objectives for your strategy. This tests whether the initiative is actually effective in achieving the targeted goals in part or in full.
Check for sufficiency means reviewing all initiatives together and checking whether they fully implement all aspects of the strategy. This tests whether the chosen 2-3 initiatives fully address the purpose of the strategy and whether all measures and metrics can be accomplished. If aspects of the strategy are not yet sufficiently addressed, choose another initiative or swap for one with greater impact.
Check for clarity means confirming that the initiative is fully understood by the organization. Especially the people responsible for implementation must know exactly what is expected of them. Make sure that for each initiative there is a caretaker, clear actions, timelines and milestones defined. Ask team members to repeat in their own words what the initiative aims to achieve to check understanding and clarity. Rephrase the initiative in the strategic plan if needed to be absolutely clear.
Check for resource sufficiency means confirming that you or the team have the resources needed to successfully complete the action or initiative. Resources may mean money (e.g. cash, capital etc), time (e.g. number of employees / FTEs), knowledge (e.g. access to data or information), or skills (e.g. expertise, experience). Confirm that you already have access to the needed resources or can build them in time. Be realistic about this! This is not the time to be overly optimistic or try to be a hero.
Pro-tip: conduct the 4 checks with your team or if you are a sole business owner with a mentor or board member. It has always paid off for me to get a second pair of eyes on my implementation plan. Discussing the implementation plan in the team allows you to collect feedback, questions and concerns and further create clarity and commitment.
What if I have more than 2-3 initiatives?
When you choose your initiatives and you conduct your test and you realize that you need four or even five initiatives to implement the strategy, then go with four or five.
Each business is different and each strategy is unique. If you need five initiatives to successfully implement your strategy and achieve your goals and objectives – and you have the resources to do it – then decide on five. The purpose is to be successful and deliver results. No one will celebrate you for having followed the OGSM rules and having limited yourself to 2-3 initiatives if you fail to implement your strategy (spoiler alert: there are no rules).
The reason why I go with 2-3 is to force choices and to make trade-offs. More often than not, we tend to throw more resources at a problem than necessary. I call this ‘tossing spaghetti against the wall’ to see which ones stick. As so often in business, try to do more with less. If you can accomplish your strategy with only 3 initiatives, then you do not need number 4. If you need more than 3 to be successful, that’s perfectly ok too.
Conclusion
When developing the implementation plan for your strategy, choose 2-3 initiatives per strategy. This allows sufficient focus without putting all your eggs in one basket.
Conducting a SWOT analysis or brainstorming are effective ways to come up with initiatives. Prioritize initiatives by analyzing cost vs. benefit or impact vs. complexity.
For each initiative ensure you define a caretaker, timeline, and expected deliverables.
Conduct four tests on your initiatives to confirm they are the right ones: check for alignment, sufficiency, clarity, and resource sufficiency.
I hope you find this article useful and wish you success with implementing your strategy. If you have any questions or comments, why not leave a reply below. Would love to hear from you!
References
Van Eck, Marc & Leenhouts, Ellen (2014). The 1 Page Business Strategy – Streamline Your Business Plan In 4 Simple Steps. Pearson Benelux.
Shockingly, 1 out of 3 business strategies fails and only about 50% of strategic initiatives are considered successful. This is a massive waste of resources and could sink a business. So why do so many strategies fail and what can you do to avoid the same fate?
According to studies by Forbes Insights and EIU, business strategies fail because of lack of leadership attention, changes in the external environment, lack of the right capabilities and resources, lack of understanding, and a lack of tracking and accountability. In other words, the main reasons why strategies fail are lack of leadership and execution.
Many of the reasons why strategies fail are preventable. In this article, I will describe six key principles and four success factors that lead to strategy success. But first let’s understand better why good strategies fail.
How good strategies fail
Allow me to take you on a journey. Imagine you were in a strategy meeting. You discussed the future direction of the business. You analyzed the external market environment and identified opportunities for growth. You debated internal strengths and weaknesses and defined core capabilities. With a match between core strengths and market opportunities, you decided on ambitious objectives and goals and laid out an exciting strategic plan.
There was great euphoria in the room about what it would feel like to reach your vision and deliver such ambitious results. You felt good about yourself and about your chances of success. And then the meeting ended and everyone went back to work. One month, two months, three months passed and nothing had changed. Instead reality happened and the exciting plan was still that – just a plan. But no worries, you thought, the meeting organizer was surely still working on the follow up actions and soon something would happen. But nothing did happen.
Nine months later, the great unveiling. The strategy was communicated with a massive Powerpoint deck. Senior leadership was excited and explained with great fanfare how this strategy would change everything. Now things would be clear and better times were ahead. However, what was described seemed old, outdated and in some parts different from was discussed previously. You feel like you were teleported back to a time 9 months ago, when market realities were different.
Meanwhile, the world had turned about 270 times. The strategy meeting was long ago. The euphoria was a distant memory. Competitors had already made their move and put pressure on prices. You had meanwhile slugged out the day-to-day and moved on. You wondered what had happened and if the objectives and goals which once seemed so exciting were now still attainable…
If this sounds familiar, you are not alone. This story is not hypothetical. It has actually happened to me and it felt deflating and demotivating. All the work we had done a year prior in analyzing the market and understanding our own competitive position was basically outdated – and in retrospect a waste of time. And the worst part – I later learned – the delay of 9 months was due to our own internal processes and entirely avoidable. Had we moved faster to implement our strategy, we would have been 1 year ahead and 1 year closer to reaching our objective. Instead we were spinning the hamster wheel, running in place. But what had happened?
Instead of moving straight into execution after the strategy workshop, when information was up-to-date and motivation was highest, a long process of documentation and alignment ensued. This is what happened:
After the strategy workshop had ended, the facilitators began typing down the flip charts. Some action items on the flip charts were not clearly legible and had to be clarified. Unfortunately, the person who wrote the notes was on vacation and couldn’t be reached for two weeks. The business leader was meanwhile traveling and insisted on reviewing the strategy documentation. By now a month had passed.
Before anything was shared the business leader wanted to present the workshop findings in an upcoming leadership meeting to get the leadership’s blessing before giving the green light.
At the leadership meeting however, doubt was uttered whether the strategic goals were realistic. It was also revealed that the business division was slated for a larger strategic review with corporate. Since the larger review would take place over the next six months, it was decided to hold the strategic implementation until the divisional strategy was reviewed. Eight months later, during the great unveiling, the original strategy seemed no longer relevant. The implementation that ensued was haphazard and largely ineffective.
Reasons for failure
Unfortunately, the story above is not a seldom occurrence in large corporations. Also small businesses are not immune from strategy failure. In the story, there were a number of things that went wrong:
Slow follow-up: it took way too long to move from plan to action. So long in fact that momentum fizzled and the original strategy was no longer implemented.
Lack of leadership support: the business leader sought buy-in from the next level leadership team only after the strategy meeting. Support was not immediately received and leadership alignment took another 8 months.
Changes in the market: While the company was conducting another strategic review, competitors had already moved-in and occupied the position the company had sought to obtain.
Strategy itself was flawed: when the strategy was finally rolled out as part of the division’s strategic plan, the strategy was altered and no longer timely. The original strategic intent had changed.
The team no longer believed in the strategy: the strategy which was finally presented barely resembled the strategy which the team had originally prepared. Even though it was a great idea to initially involve the team in strategy development, the team later felt it was no longer their strategy. The team was disengaged and not motivated to drive implementation.
Studies confirm why good strategies fail
A survey1 of 163 CEOs, senior strategists and communications professionals conducted by Forbes Insights and FD in conjunction with the Association for Strategic Planning and the Council of Public Relations Firms in 2009 revealed that about one-third of strategies fail. And the reasons for failure are mainly five-fold:
Source: Forbes Insights
Unforeseen external circumstances (24%) refer tochanges in the external environment or economic downturns
Lack of understanding (19%) among the team involved in developing the strategy and about what they need to do to make it successful
Incorrect strategy (18%) means the strategy itself is flawed
Poor match between the strategy and the core competencies of the organization (16%),i.e. the business does not have the capabilities needed to succeed
Lack of tracking, accountability and holding the team responsible (13%)
Others (11%)
A report2 by The Economist Intelligence Unit published in 2013 largely confirmed these findings and added an important further insight: the role of leadership. On behalf of the Project Management Institute, EIU surveyed 587 senior executives globally and further conducted in-depth interviews with the following findings:
Importance of strategy implementation recognized, but efforts often fall short
88% of respondents said executing strategic initiatives successfully will be essential or very important for their organization’s competitiveness
61% acknowledge that their firms struggle to turn strategy formulation into day-to-day implementation
Only 56% of strategic initiatives considered successful in previous 3 years
Companies whose business model is poorly aligned with strategy report weaker financial results than their peers.
Leadership often missing in action
Leadership buy-in and support considered number one reason for success of strategic initiatives
Only 50% of respondents said strategy implementation received appropriate senior leadership attention
28% admit that individual strategy implementation projects do not obtain necessary senior leadership support
Majority of companies lack the skills or failed to deploy necessary personnel
Only 41% of respondents said their companies provide sufficiently skilled personnel
Only 18% said hiring of people with necessary skills or leadership talent to implement strategy was a very high priority at their firms
Only 11% said developing those skills among existing team was a priority
Companies that hired and developed the needed skills succeeded in 62% of strategic initiatives.
So when summarizing the two studies and reflecting on my own 15-year business experience, the primary reasons why good strategies fail are a lack of leadership and a lack of execution.
Business leaders have to lead from the front and spearhead both the strategy formulation and the strategy implementation. It is not sufficient to sponsor strategies when they are developed and communicated and then not drive the organizational change required for implementation.
When strategies fail, senior management is responsible. In small businesses that’s the owner or the managing direction and the most senior team. In larger corporations that the C-suite all the way to divisional heads and to team supervisors.
Business leaders are responsible for making realistic assessments of organizational capabilities and to either build or hire the skills and knowledge needed to succeed. Business leaders are also responsible for making available the resources needed to succeed. This may be human resources or funds for capital investments.
Senior leadership support is the single most important factor in successful strategy execution. But that alone is not sufficient. In the following, I’ll detail six principles needed to avoid strategies from failing.
How to avoid strategies from failing
Apply the following six principles during your strategic planning and implementation to avoid your strategy from failing. This is how you become part of the two-thirds who succeed.
1. Structured process
Whether you are in a large company or a small business, a disciplined strategic planning process is critical to success
Be deliberate about strategy development and implementation
As the leader, make sure the business has the time and the space to conduct a proper strategic review
If you have a team, involve your employees in the strategic planning and the implementation process
Involving your team not only sends a clear message of appreciation, but also helps with anticipating potential obstacles and preparing accordingly
Your team knows the day-to-day challenges and help with a realistic assessment of opportunities and capabilities.
Involvement creates buy-in and buy-in creates engagement. Engaged teams create better results.
3. Buy-In & Alignment
Seek three kinds of alignment: vertically, horizontally, and the strategy itself.
First, when developing your strategy, make sure your objectives, goals, strategies, and measures are congruent with each other. Check whether strategies and measures are sufficient to achieve the objective and goals.
Second, seek systematic buy-in and alignment of objectives and strategies across functions of your organization. Make sure each function is involved and understands what it takes to be successful. Make sure each function has the resources and capabilities to support the strategy. Only if the entire organization is aligned, can you successfully execute and achieve the desired results.
Third, systematically break down objective and goals and cascade them throughout the organization. Ensure that every level in the organization is aligned, empowered and pulls in the same direction.
4. Communication
Clarity about objective, goals and strategic priorities is of utmost importance. You cannot execute a strategy you do not understand.
Build communication as an integral part into strategy formulation and execution.
When it comes to strategy, you cannot over-communicate. Consistently explain how initiatives and actions fit with the overall strategy and how they help to achieve the objective and goals.
Communication is an important responsibility of the business leader. But also team leaders and communication professionals need to consistently beat the drum.
5. Accountability
While the business leader is ultimately accountable for success or failure of the strategy, the strategic plan must be the common objective for the entire business
Set clear expectations for each function and team and clarify how each contributes to moving the business in the right direction and delivering results.
Hold people responsible for implementing strategic initiatives and delivering expected results
Be a cheerleader for your team and allow no excuses
6. Execution
Implementation must be considered a strategic initiative, not an operational task
Install a clear cadence when reviews take place and what actions have to be completed by whom and by when
Ensure that key initiatives are prioritized and resourced appropriately with the needed manpower and skills
What are success factors for business strategies?
In their excellent book “Execution: The Discipline Of Getting Things Done”, Larry Bossidy and Ram Charan describe what it takes to be successful in leading a business and implementing strategy. And – spoiler alert – it is execution!
In order to understand execution, Bossidy and Charan recommend to keep three things in mind:
Execution is a discipline and integral to strategy
When planning the strategy, the organization’s ability to execute it must already be taken into account
During execution, constantly and systematically expose internal and external realities and act on them.
Execution is the major job of the business leader
The leader must be immersed in the company and in charge of execution
Leaders run 3 core processes: picking other leaders, setting the strategic direction, and conducting operations
Leaders must be intimately and intensely involved with their people and operations. They know the realities and talk about them. They know the details and are excited about what they’re doing. They are passionate about getting results.
Execution must be a core element of the organization’s culture.
Dialogue is the core of culture and the basic unit of work. How people talk to each other determines how well the organization functions
Leaders who execute set the tone for the rest of the organization – they lead by example
Leaders who execute assemble an architecture of execution including processes for execution and promoting people who get things done
Leaders who execute look for gaps between desired and actual outcomes and work to close the gap and raise the bar higher still.
All this is a tall order but by executing and getting things done, strategies get implemented and results are achieved.
As such, I see these three elements as key success factors for implementing strategy and delivering results and would add a fourth.
Here are my four key success factors:
1. Make execution integral to your strategy
2. Make execution part of your business culture
3. As the business leader drive execution on a daily basis
4. Make realistic assessments about capabilities and devote the right type and amount of resources to strategy implementation.
How do I drive strategy execution without micromanaging?
When leaders are deeply involved in strategy execution what do they actually do? And how do they keep from micromanaging and getting caught up in daily firefighting?
Focus your leadership attention on the right initiatives. Areas in which senior leaders have the most impact are general oversight and management of execution, communication and support for strategic initiatives, and providing concerted focus for key activities.
Speak with your team, ask tough questions and expect candid answers. Do this not only while chairing business reviews and regular implementation review meetings but also in between. Go see your team, be available to them, know what’s going on. Help the team reflect where most of the attention is needed. Support action and swift decision-making, remove obstacles and help the team succeed.
Focus on your team members. Make sure that the right type and amount of resources are available to successfully implement the key initiatives. Reward the doers and achievers. Coach the ones who fall behind.
Driving strategy execution is the full-time job of the business leader. Do not delegate this responsibility. As the business leader, it’s your job to show up and lead from the front.
Conclusion
Many reasons why strategies fail are preventable. Most commonly strategies fail due to a lack of leadership and lack of execution.
Businesses can avoid this fate by following six key principles and paying attention to four success factors.
What is your experience with good strategies that fail? If you have any questions or comments, why not leave us a reply below? We’d love to hear from you.
In business, objectives, goals and strategies are often used interchangeably when describing a company’s direction. Yet they are very different. Which one comes first – and does it really matter?
When developing a business strategy, first decide your objective, i.e. where you are going. Translate your objective into measurable goals that define success. Then develop your strategies which determine how you are going to achieve your objective and reach your goals.
Or said differently, if business strategy was a road trip, then your objective would be your destination and your strategies your means to reach it. Unless you are a happy-go-lucky vacationeer for whom the journey is the destination, you decide on your destination first and then determine how to get there. Let’s explore further why this order is important.
Begin with the end in mind
One of the books that has been most influential in my career is The 7 Habits Of Highly Effective People by Stephen Covey. One specific quote left a particular impression on me which I have since applied to almost every endeavor in my business life including strategy: begin with the end in mind.
“To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
Stephen Covey
It is this quote that convinced me that strategy must begin with the destination. What do I aim to achieve? What dream or vision do I have for my business? Where do I want to be in e.g. five years? Painting this vision in as concrete terms as possible makes it tangible – not only for myself but also for my team. And a concrete, tangible vision inspires action. Turning the description of my destination into an objective statement and clearly defined goals make them tangible.
What is a strategic objective?
The objective is a qualitative statement about what a business aims to achieve over a specified timeframe. The chosen timeframe of a strategic plan is typically 3-5 years and for an annual operating plan 1 year.
The goals are the quantifiable targets or intended results to be accomplished. These typically are financial figures or other measurable metrics. In strategy, goals are the quantification of the objective to judge its achievement over the chosen timeframe.
It is best to describe the goals as SMART goals. SMART stands for specific, measurable, achievable, relevant, and time-bound. Thereby each goal is clear and unambiguous.
Once I have defined my destination, then I can decide how I will get there. As Stephen said, only then do I know that “the steps [I] take are always in the right direction.” And these steps are my strategies.
What is the difference between goals and strategies?
Strategies are the plan of action to achieve a long-term vision or objective. Strategies describe the choices a business makes about resource allocation to accomplish its objective and goals.
When designing my strategic plans, I aim to choose 3-5 strategies to give the business sufficient focus without putting all my eggs in one basket. Once I have made those choices, I develop an implementation plan that turns the strategies into action. This ensures that I move my business towards the destination.
So what is the difference between goals and strategies? The goals are part of the description of the destination while the strategies describe the way to reach it.
What are objective and goal examples?
When writing my objective statement, I use the ‘what-by-how’ method described by van Eck and Leenhouts in their excellent book “The 1 Page Business Strategy”. The ‘what-by-how’ method divides the objective statement into a ‘what’-part which describes what I aim to achieve and a ‘how’-part which already gives a sneak-preview on how I am going to achieve it. In the objective statement, I already build-in a lead to my strategy! This makes the objective statement clear and actionable. Consider the following simple examples:
“Go to Berlin by bus”
“Learn to master the guitar by practicing every day”
“Drive rapid business growth by launching a new product line”
Goals then are the quantification of these objective statements. Goals are facts and figures that turn objectives into measurable results. I define 1-2 goals each for the ‘what’-part and the ‘how’-part of the objective. Referring to previous examples:
Reach Berlin-Mitte by 4pm. Pay less than $20 for the ticket. Less than 2 hours journey time.
Master “Sultans of Swing” by Dire Straits within 2 years. Practice 1 hour daily.
Grow 15% CAGR over 3 years. $5MM annual sales from new product line by year 2.
By setting concrete goals for both the ‘what’-part and the ‘how’-part of the objective statement, the objective becomes clear and measurable and you can track that you stay on course.
So does it matter whether objective or strategies come first?
In my experience it does matter whether objective or strategies come first. Strategies describe how I aim to achieve an objective. I would therefore define my objective first and then only after I am clear about my objective and my goals would I define my strategies.
Having said that, the objective is not the very first item I discuss in my strategic planning process. Before looking into the future and developing my objective, I analyze where I am today. I want to be clear about my business’ current situation. What is the purpose of my business? What kind of business am I running? What mission am I on? What success have I had so far? Only when I know where I am today, can I look to the future.
Let’s come back to Stephen Covey. He said, beginning with the end in mind “means to know where you’re going so that you better understand where you are now […] so that the steps you take are always in the right direction.” So knowing where you are starting from is just as important as knowing where you are headed.
So know where you are today, define where you are headed and then choose how you will get there.
A great way to define your strategic plan starting with a clear objective statement is the OGSM methodology. Read on about the OGSM approach to strategy here.
Conclusion
When developing a strategy, always start with the end in mind. Once you define your destination, you know that the steps you take are always in the right direction.
Therefore, first define your objective statement and your goals. Then develop your strategies that help you reach your destination and avoid the 7 deadly sins of business strategy.
If this article was helpful or if you have any questions or comments, feel free to leave us a reply below. We would love to hear from you.
In small businesses strategic planning is often brushed aside as being too costly and time-consuming and taking too much attention away from operations. However, without a strategic plan, a business would lack the clear sense of direction it needs to be successful. So as an aspiring small business owner myself, I explored the question whether a small business really should do strategic planning or not and I found some interesting answers.
In short, strategic planning is not only for large corporations but for small businesses too. Clarity about the vision of the business, its objectives, where to play and how to win are critical for any business. A well-crafted, well-communicated, one-page strategic plan is however sufficient for a small business to succeed.
Such a one-page strategic plan does not need a lot of time or money to create. It only takes some strategic thinking about a few key questions. I’ll explore these questions in the following but first let’s understand why small businesses should do strategic planning.
Why small businesses should do strategic planning
The easy answer to the question whether small businesses should do strategic planning is of course: yes! But why really? Strategy is about making choices. But when you are just getting started, you don’t have much of a choice and pretty much jump at every opportunity you get to gain a customer and make a sale.
But even as a small business your resources are finite, your time is limited and there are millions of ways you can spend your time. You want to make sure your time and talents are directed towards those activities that will help you reach your objectives – fast. And for that you need a plan.
A plan helps you define what success means for you and how you are going to achieve it. Anyone who has ever aimed to reach any objective will tell you that any endeavor with a plan is more likely to succeed than one without. I’m sure you have the same experience. This is why football coaches create game plans and why my dad always looked at the route planner before setting off to drive the family to our vacation destination.
And that really is what a strategy is: a clear direction or plan of actions that will help you get to a goal or destination. So why wouldn’t you want to have a strategy for your business?
Truth is many small business owners feel they don’t have the time or the resources to create a complex strategic plan. Any time away from customers and operations feels like you are not making progress. And I feel the same way. Every time I don’t publish, I feel like I am wasting my time.
However, how do you know that you’re spending your precious time on the right activities? How do you know whether the customers you are pursuing are the right ones? And does everyone in your business from shareholders to employees understand why those activities and customers are the right ones? Are they spending their time on activities that are aligned with your objectives as well?
This is where a well-crafted, simple strategic plan comes in. First it helps to clarify why you are in business and what your main objective is. This is something I no longer take for granted. Even to remind myself why I got started in the first place is quite helpful to stay focused and keep motivated. When I hit a roadblock or have had a frustrating day, reminding myself why I am in business gets me back up to try again and keep going.
Next, having a strategic plan that clearly articulates the initiatives and metrics that need to be accomplished to succeed will actually get you there. A plan without execution is only that: a plan. So having a plan with clear initiatives and measures that articulates what actions need to be taken, how resources are allocated, and keeps track of execution will lead to success.
Finally, a simple but effective strategic plan aligns the team with the overall vision and objective. A plan that not only paints an inspiring vision or desirable destination but also shows a path how to get there really gets the team fired up and moves the team into motion. And you want the team to be as clear as you are about the business’ direction to be fully engaged and committed to do whatever it takes to achieve success.
A great way to summarize such a strategic plan is the OGSM methodology. OGSM stands for Objective, Goals, Strategies, and Measures and is a one-page business plan that defines where you are heading and how you are going to get there. It’s simple, it works well to get the team involved and it builds-in the execution plan. In my experience the OGSM is a great way for small businesses to create their strategic plan, drive execution and achieve the desired results.
What are elements of a strategic plan?
So what then are the strategic questions you need to answer for your small business strategic plan? Explore the following:
Why are you in business? Don’t take this for granted or laugh it off. Being clear about why you are in business gives you and your company a purpose, a “raison d’etre”. What is it that made you start your business in the first place? How does running your company achieve that purpose? For me it helps to remind myself that I am in business to provide for my family and to inspire growth. That’s what gets me out of bed in the morning and what keeps me going when I hit a rough patch.
Where are you heading? What is the vision and the objective for your business? The vision is your longer term aspiration while the objective is a concrete statement about what you want to achieve in a given period of time, e.g. 3 years or the next 12 months. Define unambiguous SMART goals that allow you to quantify your objective and measure success.
How are you going to get there? Audit your external environment for opportunities and threats and assess your personal and your business’ strengths and weaknesses. Check how they match up and identify the ‘sweet spot’ where your purpose, vision, objective, strengths and opportunities overlap. Identify a small number of concrete customers or customer segments and product or service offerings in this focus area and figure out how to use your strengths to create a competitive advantage. Create 3-5 strategies that move you towards your objective and achieve your goals. The key point here is focus. You won’t be able to do everything for everyone. Double down on the ‘sweet spot’ and give it all your focus and energy.
What obstacles could prevent you from achieving your objective? Go back to the threats and weaknesses you identified in your external and internal analyses and review your competition. Identify concrete risks that could prevent you from reaching your goals. Create mitigation measures to proactively address and overcome the most likely and most devastating risks.
What key actions are you going to take every day to move towards your objective and achieve your goals? Now pull your key strategies and risk mitigating measures together and create a concrete action plan. Each action must have a timeline and caretaker. Make sure that the actions are sufficient to cover all strategies and achieve all goals. Review for clarity and get buy-in and commitment from your team.
How are you keeping track of your progress to stay on course? Create a governance procedure, such as reviewing your action plan once per month and reviewing your strategies and risks every six months. Make a commitment to yourself and to your team to get at it and do not let off.
Capture the answers to these questions in your OGSM. If your OGSM is well-aligned following the above strategic questions, then you can fully focus on your customers and execute your action plan in daily operations knowing that it will lead you to achieving your strategic objectives.
Why do small businesses ignore strategic planning?
Whether evident or not but every business has a strategy. Some businesses are more explicit about their strategy while others more implicit. Every business does somehow allocate resources and does decide which customers or projects to pursue to achieve results. Not every business however goes through a deliberate planning process and documents their strategy. And this can have several different reasons.
Too busy – small businesses and their owners might be so consumed with keeping the business afloat that taking a step back and planning ahead seems like an impossible task. I always have to think of this cartoon in which two people are busting their guts pulling a cart with square wheels. When another person arrives and suggests round wheels they decline saying they are too busy to entertain his idea. Sometimes it can be very useful to take a step back to look at the bigger picture and confirm that you are still going in the right direction.
Not sure how – some small businesses may simply lack the knowledge and expertise about how to do strategic planning or how to do it effectively. Strategy does not need to be rocket science though but can be a simple plan that sets priorities for the business.
Fast changes – many businesses nowadays operate in rapidly changing environments in which a strategic plan may appear outdated as soon as it is decided. Even in those environments however it pays to be clear about what the objectives of the business are and how results are measured and achieved. Especially when there is a large team at work, when things change quickly, you want to reiterate your plans quickly and have everyone involved so that everyone knows at all times what’s important and how you plan to succeed.
Owner led – a small business may be led by an owner with strong strategic skills who is able to mastermind the strategy and direct the team. Great industry knowledge or foresight may allow the owner to anticipate changes and adjust the course proactively. Nevertheless, making the strategy transparent and creating clarity about how everyone contributes to its successful implementation creates engagement and engagement creates results. In my experience an effective team is always stronger than an effective individual.
Whatever the reason may be, if you have not considered taking a step back for your small business to review the bigger picture and create a strategic plan, I would encourage you to do so. One of the worst things that can happen to a small business and its owner is to be surprised and unprepared in the face of an unforeseen event.
Common mistakes small companies make in strategic planning
While some small businesses ignore strategic planning, others have tried and failed. In fact, a Forbes Insights study of 163 CEOs revealed that more than a third of all strategies fail. Here are some common mistakes I have seen in practice and how you can make sure they don’t happen to you.
Pursuing someone else’s strategy – reading strategy books and autobiographies of successful business owners and entrepreneurs can be inspiring. And copying someone else’s strategy can be a good idea. However it must fit your business. It must be an approach that you can apply and customize to your business and your situation. It’s fine to seek inspiration and motivation from successful reference cases. Reality is not every business will be the next Apple or the next Tesla. Blaze your own trail. Build a strategy that fits for you and your business.
Spreading too thinly – No, I am not speaking about spreading Nutella too thinly on a slice of bread even though that would be a mistake as well (the ratio must be 2:1!). Lack of direction and lack of focus lead to spreading your resources across too many activities. You are much more effective if you can devote your entire attention and energy to delivering one thing instead of trying to deliver four, five or six things simultaneously. When developing your strategy, focus your attention on those initiatives with the biggest impact and highest likelihood of success towards your objective and goals. Do those first activities first that take you 90% there and then optimize later to take you the rest of the way.
Working on the wrong things – If you are like me, it’s easy to get distracted by customers who yell the loudest or innovations or technical gadgets that seem most interesting. Resist the urge. Do not fall prey to “shiny objects”. Check your biases towards recent events, availability of information, or most memorable experiences. Focus on those things that matter most to your purpose, vision, and objectives.
Lack of communication – what good does a strategic plan do when it lands in a drawer after it’s designed and doesn’t see the light of day? Make your strategic plan transparent to your business, your employees and key stakeholders. Over-communicate. Make sure everyone is absolutely clear what the priorities of the business are and how everyone contributes to the achievement of your objective – from management team to part-time aid.
Starting with PowerPoint – when thinking about “strategy”, have you ever caught yourself thinking about presentation slides and strategy tools rather than an actual action plan? If you are planning a strategic review, do not first open your slideshow software. Start instead by talking to your customers and your employees about their challenges and what they would love to be able to do or achieve. Use the insights to design your strategy process.
The most common mistake I have experienced though is not executing! Whether in large corporations or small businesses, the biggest issue with strategic plans is not doing what you said you were going to do. If this sounds familiar to you, don’t worry, you are in good company. And there are a million reasons for this: things change, quality issues get in the way, tragedy strikes, or you run out of cash. A strategy should never be carved in stone to remain flexible to adjust to changes in the internal or external environment. But be deliberate about building in the execution plan and review cadence and follow through ruthlessly. Pivot when you need to. But execute, execute, execute.
Now you know! And because knowledge is power you can now make sure that the same mistakes don’t happen to you.
Conclusion
Yes, strategic planning is not only for large corporations but for small businesses too. Strategy gives a business the direction it needs to be successful by defining where to play and how to win.
Developing a strategy does not need to be costly and time-consuming. It could be as simple as a conversation in your team about where you are heading and how you are going to get there. Whatever you do, document your objective, goals, strategies and measures on a one-page strategic plan, involve your team, over-communicate with your employees, and execute, execute, execute
Now over to you. How does your small business do strategic planning? If you have any questions or comments, why not drop us a reply below. We would love to hear from you.
