What is the OGSM model?

The acronym OGSM stands for:

• Objective
• Goals
• Strategies
• Measures

The model was first developed in post-war Japan, which was occupied after its 1945 surrender. Due to the occupation, most industry in the country was overseen by Allied countries, and it was in a top-down management style that the framework found its roots. It was used primarily in car manufacturing assembly lines at companies like Honda, and eventually made its way over to the USA. OGSM shares a lot of similarities with an earlier model called OKR, developed by Austrian-American Peter Drucker.

The OGSM model offers structure to strategic planning and execution and links all areas of your company in working towards a shared objective. It’s a grassroots framework that informs day-to-day operations, ensuring that your company’s smaller activities are aligned with its larger goals.

Real-world examples of the model

In its early days, the OGSM model was primarily used in the car manufacturing process. It was uniquely suited to this industry as assembling a car requires a very clear set of linear steps. An initiative taken up at Honda after implementing OGSM was that anyone on the assembly line could stop production and try to make an improvement. As the model developed and made its way over to the USA, other industries began to see its value. One of the first to adopt the model was Procter and Gamble, who refined and championed it. Other large corporations like Coca-Cola and Mars soon took up the model, as did several consultancy firms. Today, a wide range of medium to large companies benefit from using OGSM in their operations.

What are the advantages of using the OGSM model?

To decide whether your company can benefit from using the OGSM framework, let’s look at some of its advantages.

• Offers you the ability to see and plan your ‘big picture’: This clarity can empower you to better communicate your vision to employees and get everybody on board.
• Provides a systematic approach to your annual strategy planning:The step-by-step process ties everything together, taking you from your objective all the way down to the daily activities that progress your goals.
• Inspires and encourages employees: Sharing your strategies and explaining your objective demonstrates transparency, fostering trust among your workforce. When employees can see the progression of goals, they feel more engaged and motivated to stay on track and work as a team.
• Measures and shows tangible progress: The OGSM model focuses on monitoring the progress of your strategies and aligning your company’s KPIs with your objective. This can allow you to identify areas of strength and weakness along the way and make any necessary adjustments. The ability to course correct while in the midst of working towards goals increases the likelihood of achieving your overall objective.

Related: 11 employee engagement ideas

What are the disadvantages of using the OGSM model?

Before you make up your mind, it’s important to be aware of the potential disadvantages of using the model.

• Smaller details can be missed: Because the framework focuses on the bigger picture, it’s possible that small but important details could slip through the net.
• Top-down approach can exclude employees: This is a common pitfall when using the model in its traditional form, which makes it important to ensure your higher-level plans are well connected to their ground-floor execution via effective communication.
• Can be harder to understand initially: The OGSM model is quite different to other strategic planning models, which can make it challenging to grasp. Additionally, its focus on a single objective can be restrictive compared to other models that allow multiple objectives.

How to implement the OGSM model at your company

Before we dive into the steps for adopting the model, lets break down the questions posed by the four pillars of OGSM.

• Objective: What do you want to achieve?
• Goals: What goals do you need to hit to meet the objective?
• Strategies: How are you going to meet each of these goals?
• Measures: How can you measure if your strategies are working?

One of the reasons the OGSM model is so popular is how easy it is to implement. While software can support your progress and make your strategies more efficient, all you really need to get started is a piece of paper. Here are the steps to follow.

1. Assess the present state of your company

To ensure that you’re making informed decisions and setting a realistic objective and goals, it’s important to take stock of how the company is currently performing, the resources available to you and the current state of the market. This involves conducting both internal and external research. During this phase, you can utilise strategy analysis tools like a GAP, SWOT or PESTLE analysis.

2. Define your objective

The main characteristic that sets the OGSM model apart from others is that it makes a distinction between objectives and goals. This takes the form of a singular objective that’s broken down into smaller goals. Defining your objective is the task under which the entire framework is developed. Once you know what you want to achieve, you can create an objective statement. This works best when it is specific and detailed yet clear and not overly complicated. A strong objective statement is one that can motivate employees and get them on board with the project.

3. Set the goals that you need to achieve to reach your objective

During this phase, you determine what needs to be done to meet your objective. It’s up to you how you want to categorise these goals – for instance, they could relate to specific areas of the company, to periods of time or even a combination of both. ‘Increase sales by 25% in the first quarter’ is an example of a time-specific goal, while ‘Retain new hires for at least two years’ is an area-specific goal. Applying the SMART method (Specific, Measurable, Attainable, Relevant, Time-bound) can help with setting realistic goals.

4. Develop your strategies

Your strategies are going to guide all your decisions and actions and determine how you allocate resources. They form the foundation of the OGSM framework. It’s important that these strategies define in detail what you are going to do as well as what you are not going to do. Aiming for three to five strategies per goal is a good approach.

5. Set measures and develop an action plan for each strategy

Measures are the quantitative metrics (or KPIs) that help you track your progress and make any necessary adjustments. Aim for a maximum of three measures per goal. In recent years, the OGSM model has refined the ‘Measures’ step, dividing it into two elements:

5.1 Measures

This is the reporting process that gives you an overview of current performance. Users of the OGSM model typically turn to dashboards for this process.

5.2 Action plan

Once you have determined how your goals and strategies are progressing, you can develop action plans aligned with each strategy. This is an outline of what still needs to be done in order to execute the strategies and address any performance gaps. A good action plan has a deadline attached to it as well as an employee who is responsible for it.

Tips and best practices

To give you the best chance of reaching your objective, here are some pointers to consider.

• Involve all levels of the business in defining your objective and setting goals. This includes employees who are going to carry out strategies on the ground level as well as your stakeholders.
• Use clear language in your framework, avoiding overcomplicated sentences and jargon. This can help ensure your model is accessible to your entire workforce.
• Accurate, real-time data is key to setting realistic goals and measuring progress. To get the best data, consider using specific software tools to augment your human workforce.
• Focus is pivotal to the success of the OGSM model. That’s why it’s recommended to assign only a small number of strategies to each goal. If you’re struggling to decide which strategies to begin with, you could conduct a risk assessment on each idea.

The OGSM model has developed over the past 70 years, with numerous ways to make it work for your company, and its focus on involving all sectors of the business and workforce can help boost morale and increase employee loyalty. Deciding to adopt this framework not only helps you develop a clear roadmap to take you from vision to successful accomplishment, it can also create a company culture where strategic planning is second nature.