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
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.
The outter, larger circle of concern is 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: – … – … – … |
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.
4. Use the ‘what-by-how’ method
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.
Three to five strategies provide the right balance between focus and risk diversification and help you avoid the 7 deadly sins of business strategy.
6. Build your plan top-down
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.
Check out Rock Your Strategy’s resources about OGSM and how to create effective strategic plans that deliver results. You can read a general introduction about OGSM here. The article includes links to deep dives into each element of the OGSM: objectives, goals, strategies, and measures.
7. Review your plan bottom-up
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.
Read more about how to conduct quarterly in-depth OGSM reviews and how to do monthly check-ins to keep up with executing your plan.
8. Cascade the OGSM
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.
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.
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!
Read more about monthly OGSM reviews here.
10. Renew OGSM annually
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 results. If you have any questions or comments, why not drop us a line below? We’d love to hear from you.
Where to go from here? Check out our OGSM examples or download our tools and templates here.
