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.
Read more about how to conduct monthly reviews of your OGSM in this article.
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.
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.
Learn more about how to conduct a strategic planning meeting here.
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.
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.