OGSM is a framework for strategic planning that can be visualized and managed inside Perdoo.
Read on to learn the differences between OGSM and OKR, and how OGSM works in Perdoo.
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What is OGSM?
OGSM stands for Objective, Goals, Strategies, and Measures. It’s a way to plan out a strategy, made famous by Japanese car companies and, among others, Proctor & Gamble. Companies create OGSMs for the whole organization or for a particular area of the business.
Objective – What you ultimately want to achieve. A short, qualitative statement.
Goals – The outcomes you’ll need to achieve to reach that Objective.
Strategies – The specific choices that’ll focus the organization’s plans toward achieving the desired Goals.
Measures – How you’ll monitor success on those Strategies.
How does OGSM compare to OKR?
Whereas OGSM is more focused on strategic planning, OKR is more focused on strategy execution. OKR stands for Objectives and Key Results. The Objective is a qualitative statement about where you want to go. The Key Results are quantitative measures that’ll let you know if you’ve got there.
OKR is a great tool for executing strategy, but the OKRs themselves often don’t say a lot about a company’s strategy*. However, your strategy helps everyone decide what Goals (ie, OKRs) they need to focus on in order to realize that strategy and build a successful business. So it makes sense to combine OGSM with OKR.
The G in OGSM stands for the Goals that you’ll need to achieve in order to achieve an ambitious long-term goal (OGSM calls this your Objective, and inside Perdoo we call this your Ultimate Goal). OKR will replace the Goals inside OGSM. OKRs are an ideal type of goal to push the organization toward its Objective/Ultimate Goal, because they are focused on outcomes by design.
* The main reason for this is that strategy is practically eternal, whereas OKRs tend to be set for specific time periods, eg annual and/or quarterly. Think about Southwest Airline’s strategy of being “THE low-cost airline” – this isn’t something that Southwest Airlines is going to focus on just for a distinct time period. It’s a strategic choice about how Southwest Airlines is different from its competition. It’ll likely be part of its strategy up until its leadership changes that strategy.
How OGSM works in Perdoo
As OGSM rightly recognizes, effectively delivering strategy requires a combination of strategy and goals. So OKR becomes a much more powerful framework when the OKRs are being tracked alongside an organization’s strategy. And because OGSM is weak on the execution side of things, OGSM is much more powerful when combined with OKR.
This is why Perdoo enables you to track both in one place. We bring together your strategy (in the form of Strategic Pillars) with all the goals (not only OKRs, but also KPIs) that will deliver it. As such, Perdoo covers all the aspects of both OKR and OGSM.
In other words, you can use Perdoo also for OGSM. All it takes is making a few tweaks to the terminology. This is a consequence of Perdoo sticking to the more common, academic definitions of terms like strategy, goals, and objectives; where OGSM provides alternative definitions.
Scroll down to see how it all comes together in Perdoo!
- Objective = Ultimate Goal. As mentioned above, this is a reflection of your organization’s mission and vision. It should outline the purpose of your organization, what it’s all about, and the market/customer segments that you target. Here’s Perdoo’s Ultimate Goal: “Help SMBs & Mid-Market businesses realize their ambitions, and become the leading OKR tool in Europe & North America.” This sits at the top of your Roadmap, as shown in the image above.
- Goals = OKRs. We’ve touched upon this already, but your OKRs are really that Roadmap to move toward your Ultimate Goal. The outcomes we’ll need to achieve. Organizations often set OKRs for the company annually. We’ve seen companies have great success at outlining the main themes for the year in these annual company OKRs. The different teams or departments in the organization can then set quarterly OKRs that support those annual company themes.
- Strategies = Strategic Pillars. Strategic Pillars in Perdoo make sense of the company’s strategic choices and communicate your strategy in a way that’s understood by your people. Your Strategic Pillars should really share how you’re planning to win, to beat the competition in the market that you’ve outlined in your Ultimate Goal. As such, they support your Ultimate Goal, so sit just below it on your Roadmap. Your OKRs will then support these Strategic Pillars.
- Measures = KPIs. Once we’ve outlined our strategic choices, we need to measure success on them. KPIs are a great tool to do that – simple health metrics that let us know where we stand on each Strategic Pillar. On your Roadmap, you can see how the KPIs for each Pillar are performing. Clicking into one of these KPIs then helps you to see how that’s trending over time, and what’s being done to get any unhealthy KPIs back on track.
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