Have you ever come across the acronym OGSM and wondered what it meant? Here’s what it stands for.
OGSM stands for Objectives, Goals, Strategies, and Measures. It is a one-page strategic business plan that outlines WHAT you want to achieve and HOW you are going to achieve it.
The OGSM methodology has been popularized by its deployment at corporate staples such as P&G or Coca-Cola. And you can adopt it for your business too!
OGSM: the one-page business strategy
The OGSM approach is great, because it simplifies a potentially complex concept into a simple framework that cuts through the clutter and shows clearly the choices that form your strategic direction.
The OGSM framework may look something like this:
The OGSM may be the deliverable of a strategic process that discusses through the objectives, goals, strategies, and measures. Or it may very well facilitate that process. I have done both and I really like the OGSM’s ability to facilitate the process, force choices and capture the output.
Because of its simplicity and its complete overview, the OGSM is also a great tool to communicate the strategy to employees, the wider organization and other stakeholders.
Let’s go through each component in turn.
O stands for Objectives
The objective is a qualitative statement about your ambition. It describes the future state of your organization. It is the destination of your journey.
The objective should be quite specific and spell out in no unmistakable terms what you are aiming to achieve over a chosen time horizon. For annual business plans this may be 1 year or for longer term strategies typically 3-5 years.
Examples might include “Become the recognized category leader in up-market shoe cream” or “Double our market share in coal-powered mobile phones” (even though I am not sure that’s a sustainable segment to target… But more about targeting later).
Note that this is not a vision or mission statement or an open-ended dream. It may be however a priority or major milestone in the pursuit of your vision. In fact, for annual business plans, I personally like to think of the objective as being a focus area for the year as I aim to realize my vision.
Regardless of the time horizon, clarity about the objective is absolutely critical as it guides the rest of the OGSM. It is important that all stakeholders understand and agree with the objective.
As the saying goes…
“If you don’t know where you are going, any road will take you there.”INSPIRED BY LEWIS CARROLL’S ‘ALICE IN WONDERLAND’
G stands for Goals
The goals are the quantitative description of your objective. Goals should translate your qualitative objective statement into measurable figures. These are the numbers that represent the future state and help you to measure whether you are successful.
The objective and goals together describe WHAT you are aiming to achieve.
Examples of goals are concrete revenue, growth or profitability targets. Other examples may include cost savings, market share or service level targets. In more operational plans this could simply be the number of new customers acquired or a process cycle time.
The key point is that your goals need to align with the purpose and the timeframe of your objective. If your objective is to achieve break-neck revenue growth, choose goals such as sales turnover, market share, leads or opportunity pipeline. If your objective is to improve productivity, choose return on capital, operating expense ratio or inventory turns for example.
In order to be meaningful, I like to choose no more than 3-5 goals. These should be the key indicators whether you meet your objective. They do not need to represent every KPI you have on your operating dashboard. Measure what matters. No more, no less.
S stands for Strategies
The strategies are the key initiatives you undertake to realize your objective and achieve your goals. Strategies are the qualitative description of your roadmap to success. These are the choices you make to win.
Or said differently, if there are “1000 ways to Rome”, then the strategies describe the way you choose to take.
When it comes to strategies, the word choice is critical. Your time is limited, your resources are finite. You cannot do everything. Besides, the OGSM is a one-page plan. So choosing the most effective, most probable strategies that allow you to succeed is important.
From my experience, focusing on 3-5 strategies is best. This allows sufficient focus without putting all your eggs in one basket.
M stands for Measures
The measures describe the concrete action plan and metrics for each strategy. Measures quantify the strategies and clarify who does what by when.
In fact, I have sometimes heard people spell out OGSM as Objectives, Goals, Strategies and Metrics.
In their excellent and practical book “The 1 Page Business Strategy”, van Eck & Leenhouts actually split measures into a dashboard and an action plan. This is a very helpful way to ensure that each strategy is executed by implementing the concrete action plan and monitoring the dashboard for progress with chosen key performance indicators.
I highly recommend the book and following this practice.
How to create an OGSM for your business
When using the OGSM to draft a strategic plan or annual operating plan for your business, follow the O-G-S-M sequence to build up your plan.
Begin with a strong objective statement that clearly describes the future direction of the business. Then translate the qualitative objective into 3-5 relevant quantitative goals. The objective and goals together describe WHAT you are aiming to achieve.
Subsequently, make choices about 3-5 strategies that determine how resources are deployed to achieve the objectives and goals. Check that the strategies sufficiently address all goals and are congruent with the objective.
Finally, for each strategy, create relevant measures that allow you to quantify each strategy and drive implementation. Translate each strategy into 2-3 metrics that define success and draft 2-3 initiatives that help you turn strategy into action. For each initiative, define caretaker and timeline.
Capture the complete OGSM on a one-page business plan to clearly visualise the business’ priorities and how objectives will be achieved. Read more about creating an OGSM for your business here.
Ultimately a plan is only as good as its execution. In order to achieve your objective and goals, regularly review progress of executing your OGSM on a quarterly basis. In order to do this well, read about the 11 secrets of successful strategy execution here.
We discussed that OGSM stands for Objectives, Goals, Strategies and Measures. While the objectives and goals describe WHAT you aim to achieve. The strategies and measures describe HOW you will get there. But what does an OGSM actually look like? Here are a few examples.
The OGSM translates the strategic objective of a business, organization or project into practical day-to-day steps. By focusing on your daily action plan you ensure progress towards your longer term goals.
If you have seen enough and want to get started on your own OGSM, see below for free, downloadable OGSM templates.
By the way, the OGSM is not only for large corporations. Its simplicity makes it well suited also for small businesses, entrepreneurs and even non-work projects. Should small businesses even do strategic planning? Click on the link to find out.
Bonus Tip: Cascading The OGSM
If you are part of a larger organization with different business units, product lines or functional organizations, you will appreciate that the OGSM can easily be cascaded into departments or teams.
The set-up of qualitative objectives with quantitative goals and qualitative strategies with quantitative measures helps to translate a corporate strategy into a division’s objective or a product line strategy into a functional department objective.
The higher level organization’s strategy becomes the lower level organization’s objective. The higher level organization’s measures become the lower level organization’s goals and so on.
A well-cascaded OGSM thereby ensures that each team’s (or even each individual’s) activities are well aligned with the overall organization’s objectives and goals.
If you’d like to learn more about OGSM, check out our Dos and Don’ts of OGSM or the 7 Deadly Sins of Business Strategy. More practical tools and templates, workshop guides and book recommendations can be found in our jam-packed resource section. Rock on!
Van Eck, Marc & Leenhouts, Ellen (2014). The 1 Page Business Strategy – Streamline Your Business Plan In 4 Simple Steps. Pearson Benelux.