When using the OGSM methodology or developing any strategic plan, it is important to define strong measures that drive strategy implementation. This is how you turn your strategy into results.
Measures are the M in OGSM and include key metrics and an action plan that track strategy execution and define who does what by when.
This is where the rubber hits the road. After deciding your objective and goals and choosing your strategies, the measures move the business towards its objective and tell you whether the strategy is working in practice.
Divide measures into key metrics and action plan
When defining the measures for strategy execution, I have found it very helpful to think of them in terms of key metrics on the one hand and key initiatives on the other hand. Key metrics measure progress and quantify achievement. Key initiatives are the actions that drive you forward. Both are critical to success.
First, define your key metrics. For each of your strategies, choose 2-3 key metrics that define success for the strategy. Similar to how goals are the translation of the objective into facts & figures, the metrics translate the strategies into numbers.
When you wrote your strategies you applied the “what-by-how” format to indicate what needs to be done and how it will be achieved. Now define 1-2 key metrics each for the “what”-part and for the “how”-part. This ensures not only that you know when you have achieved your strategy but also if you are making progress in the right direction while taking action.
Similar to the goals defined earlier, use the SMART approach also for choosing your key metrics. The metrics should be specific, measurable, ambitious, realistic, and time-bound.
The key metrics should be linked with your goals. When you have defined your key metrics, check back whether that is the case. Delivering all the key metrics should achieve all the goals. Not more, not less.
Next, craft your action plan by defining key initiatives. The action plan should be a concise list of key initiatives that turns the strategies into reality.
Write your initiatives in the “what-by-how” format which you also used when writing the strategies. This again ensures that for each action it is clear what you aim to do and how you are going to do it. For example, “identify new customers by asking existing customers for references.”
For each strategy, choose a maximum of 2-3 key initiatives. The point here is focus. These should be the top 2-3 initiatives that really drive the change and deliver the key metrics for the strategy. Beware of including activities that are anyway part of your day-to-day routine.
After you have defined your initiatives, check for clarity, feasibility, sufficiency, and alignment. The initiatives must be understandable and unambiguous. The initiatives must be realistic and the resources available or accessible. All initiatives should be sufficient to achieve the intended results of the strategy. And all chosen initiatives must be congruent with each other and not be in conflict.
To complete the action plan, define one concrete caretaker for each initiative and set an ambitious but realistic timeline. This is important and unfortunately often forgotten in strategic planning. By setting caretaker and timeline, you assign clear accountability to make sure the job gets done.
The caretaker may not be the only person working on this initiative, but this person is the one accountable that the initiative is completed. That’s why it’s important to only define one caretaker so there is no confusion about who is in the lead. It is the caretaker’s responsibility then to assemble the team and the resources needed to execute the action.
Finally, capture the measures in the OGSM to complete the one-page business plan. Now you are ready to drive implementation and turn your strategy into results.
Why separate key metrics and action plan?
In their excellent and practical book “The 1 Page Business Strategy”, van Eck & Leenhouts split measures into a dashboard and an action plan. This is a great way to ensure that each strategy is executed by following the concrete action plan and monitoring the dashboard for progress with implementing the strategy.
I have tried this in practice now multiple times and find the separation extremely helpful. Prior to practicing this approach, I had seen measures interpreted in different ways. Some define the M in OGSM simply as “metrics”. Others have a long list of actions. Neither one individually convinced me to purposefully execute strategies and keep up with the pace of change. You need both.
The key metrics on the one hand define in quantitative facts and figures what each of the chosen strategies needs to deliver. As we define key metrics for both the “what”-part and the “how”-part of a strategy, we have ongoing feedback whether we are on the right track.
The action plan defines who does what by when to drive implementation. This breaks each strategy down into bite-size action items that can be executed in day-to-day operations. As each action has one caretaker and a due date, clear accountability is assigned. After defining a strategy you don’t want to come back months later wondering how to implement and who should be in charge.
By having clearly defined metrics and a solid action plan, you can directly move the business towards executing the strategy.
What metrics should I choose?
The short answer is “measure what matters” and use as much as possible key metrics that you are already familiar with.
The metrics you choose should be directly linked with the purpose and the scope of the strategies and link with the achievement of the goals defined earlier.
These can of course be financial metrics such as sales value, units sold, profit margin etc. They are very commonly also operational metrics such as number of products launched, cycle time, yield rate, percentage of satisfied customers, or an employee engagement score. The metrics you choose highly depend on the nature of the strategy.
So it is less important which exact metric you choose and there is no one-size-fits-all approach. It is more important that you choose a metric that measures what you are looking to achieve. It must give you clear quantifiable feedback whether you are on the right track to achieving your overall goals.
When defining a key metric for a strategy, I have found it useful to first look at the many metrics the business already measures to see if one does the job, before creating a new metric that the team is unfamiliar with. You probably already have many key performance indicators. I would try to avoid burdening the business with new metrics unless of course the change of course requires you to do so.
If you are struggling to find a suitable metric, consider simply defining “Yes/No” to indicate whether an action has been done at a given time. I’m not recommending this as a best practice. But I have been in situations where there seemed to be no single metric to really define what we wanted to measure. Instead of getting stuck, we decided to define “Yes/No” as a clear binary measure whether the activity is done and move on.
Avoid creating a laundry list of actions
Have you experienced this before? You create an action plan or a to-do-list to achieve an objective and before you know it you have written down 8 or 10 detailed actions. All of a sudden your action plan looks like a laundry list.
When implementing strategy, the problem with a laundry list of actions is that you lose focus. You end up spending more time tracking, updating and discussing action plans than actually taking action and driving execution towards your objectives and goals. You don’t want reporting. You want progress.
So when defining your action plan, be selective and limit yourself to 2-3 key initiatives per strategy. These should be the must-do actions directly linked to driving execution and delivering the key metrics for the strategy.
Beware of the common reflex to include in the action plan day-to-day routines you do anyway. Even if they contribute in small ways to executing the strategy and moving your business towards your objective. “Processing customer orders” is essential for your business, but does not move the needle for executing your strategy. Only include those initiatives that drive change.
Read more about my thoughts on how many initiatives to choose here.
I’ve completed my OGSM. What’s next?
After you have completed your strategic plan, the real work is starting: the execution.
All too often in my business experience I have seen wonderful strategic plans being crafted. Many of them created real euphoria in the business about a great future. And that is what a good strategic plan should do! But then after the strategy was created, it was documented, filed and everyone went back to day-to-day operations. Customers called, shipments were delayed, reality struck. Have you experienced this as well? It happens, but it drives me nuts.
The most important part of any strategy is its execution. It’s why the strategy was created in the first place. To set a clear direction and destination for the business and decide how to allocate its resources to get there! So now is the time to use the resources, take action, and get there. Here’s what I have found useful to implement my strategic plan.
When finalizing your strategic plan, decide on an approach how to implement the plan and when to check in for progress. For a 3-5 year strategy, it makes sense to check on progress once a quarter and to conduct a strategic review once per year.
The purpose of the quarterly reviews is to make sure the strategy is working and that you are progressing on the key initiatives towards your key metrics.
The purpose of the annual strategic review is to check progress towards your objective and your goals and to identify any changes in your strategic context. Review the external environment and internal environment and review the SWOT analysis. Confirm whether previous assumptions still hold or if changes in your environment require you to make changes to your strategic plan.
For an annual operating plan with objective and goals for one year, check on progress once a month and conduct a more thorough review once per quarter. Again, you are looking for what’s working and what’s not and if adjustments are needed.
What if I miss my targets and don’t make progress?
First of all, don’t panic. This is why you conduct periodic reviews. This gives you a chance to be proactive and adjust if needed.
Start by finding out why you are not making progress. Diagnose whether the problem lies in the strategy or in its implementation. As you have defined key metrics for both the “what”-part of the strategy and the “how”-part, they should give you an indication where the issue is.
If the problem lies with the implementation, check through the action plan. Do you have the right people on the job? Are the needed resources available? Is the timeline realistic? Are there challenges the team has met that you can help overcome? This means getting into the weeds a little bit.
If the problem lies with the strategy itself, check whether something in the external or internal environment has changed. Were any of your assumptions inaccurate. Have customer preferences changed? Has a new competitor emerged with a better offering? Depending on the answers you find it is either time to double down or to pivot.
No strategic plan should ever be written in stone and pivoting means adjusting your strategic plan. Go back to some of the steps described earlier and adjust your strategies, key metrics and key initiatives in accordance with your findings. If you have a team of employees, conduct strategic pivots together with your team so that they understand what is changing and why. When it comes to strategy, few things are worse than making changes that people don’t understand.
When people lose clarity about the strategy, they lose engagement. And a loss of engagement means a loss in productivity. This means your objective and your goals could be at risk.
Proactively adjusting your strategic plan and taking your team with you allow you to stay on track to achieving your obejctive and goals.
When defining the measures for strategy execution, set up key metrics and key initiatives. Key metrics measure progress and quantify achievement. Key initiatives are the action plan that drive you forward. Define a caretaker and a timeline for each initiative to ensure accountability.
Capture your implementation plan in a document such as the OGSM to drive execution.
Determine a cadence for reviewing your progress with implementation. This allows you to double down on what’s working or to pivot when it’s not.
Congratulations! You have completed all four steps towards creating an OGSM for your business. Now good luck with your execution and turning your strategy into results.
If you enjoyed this article or have questions or comments, why don’t you leave us a reply below? Would love to hear from you!
Van Eck, Marc & Leenhouts, Ellen (2014). The 1 Page Business Strategy – Streamline Your Business Plan in 4 Simple Steps. Pearson Benelux.