The OGSM Model: A Bridge Between Vision and Execution

Many businesses have great visions and goals for the future. But turning those ambitions into reality can be a major challenge without the right strategic planning. This is where the OGSM Model in business comes into play.

OGSM stands for Objectives, Goals, Strategies and Measures. It is a straightforward strategic planning framework used by organizations large and small to translate vision into action.

In this comprehensive guide, we’ll cover what exactly the OGSM model is, the step-by-step process for building an effective OGSM, and real-world examples of companies using OGSM to drive meaningful business results.

What is the OGSM Model?

The OGSM model is a strategic planning technique used to map out high-level organizational ambitions into specific, measurable goals and strategies over a set timeframe, usually 3-5 years.

It has four key components:

Objectives

The objectives component of the OGSM model refers to the qualitative end goal that an organization wants to achieve over a 3-5 year timeframe. Objectives should be:

• Aligned with Company Mission and Vision: The objective must ladder up to the overall mission and vision of the company. If the objective does not help the company fulfill its core purpose, it should be reevaluated.
• Ambitious yet Achievable: A good objective should stretch the company to aim beyond its current capabilities, while still being grounded in reality. Setting unrealistic objectives sets the strategic plan up for failure.
• Easy to Communicate: Employees at all levels should understand what the organization is working towards at a high-level. The language used should resonate with both C-suite executives and frontline staff.

Here is an example objective that meets the above criteria:

• "Become the #1 leader in sustainable packaging solutions by 2026 through innovative, biodegradable product designs."

This objective clearly ladders up to an environmental sustainability mission. It is ambitious for a packaging company but attainable through product innovations. And it uses simple language that paints a vivid picture for all employees.

Goals

Goals represent the quantified, time-bound outcomes that indicate progress is being made towards the overarching objective. Effective OGSM goals are:

• Specific and Measurable: Goals must have concrete evaluation criteria to determine if they have been achieved. Terms like “improve”, “expand”, “reduce” are too vague.
• Achievable yet Challenging: Like objectives, goals should motivate employees to accomplish more than thought possible, without being seen as impossible feats.
• Relevant to Strategies: Each goal should link directly to one or more strategies outlined in the OGSM model. Irrelevant goals get cut.
• Time-Bound: Goals should have clearly defined completion timeframes, usually yearly milestones over the 3-5 OGSM timeframe.

For the sample objective above, aligned OGSM goals could be:

• "Convert 60% of packaging products to fully biodegradable materials by 2026."
• "Reduce carbon emissions from packaging manufacturing by 40% by the year 2026."

These goals use specific metrics like percentages and timeframes that make it easy to evaluate success. They also tie directly to strategies around sustainable product redesign and manufacturing improvements.

Strategies

Strategies outline the specific initiatives, projects, and actions that will be taken to accomplish the OGSM goals and objectives. Effective strategies have the following attributes:

• Clearly Defined Choices: Strategies represent the conscious decisions being made regarding resource allocation and operational focus that will drive the OGSM plan. Rather than listing all ongoing activities, they spotlight new strategic commitments.
• Limited to Facilitate Focus: OGSM models typically highlight 3-5 strategies that will have the biggest impact. Trying to implement too many strategic initiatives at once spreads resources too thin.
• Adaptable Over Time: Strategies may need to evolve as business conditions change over the 3-5 year timeframe. Teams should review and refresh strategies on a yearly basis.

Sample strategies for the sustainable packaging objective could include:

• "Invest $20M in an R&D facility dedicated to developing innovative plant-based packaging materials to replace 50% of plastic and foam products by 2026."
• "Launch a marketing campaign showcasing the importance of sustainable packaging to capture 15% more market share in the eco-friendly segment by 2026."

These strategies call out specific dollar figures, facilities, market segments, and timeline commitments that teams can organize around to drive progress on the related goals.

Measures

The measures component of the OGSM model refers to key performance indicators that are tracked over time to determine if the outlined strategies are successfully driving achievement of the goals and objectives. Effective measures exhibit the following:

• Tied to Strategies: Each measure helps answer the question - Is this strategy working? Measures evaluate the impact of strategic choices.
• Limited to What Matters Most: With too many metrics, the focus gets lost. OGSMs track only the handful of KPIs that have the most meaning and impact for each strategy.
• Monitored Consistently Over Time: Teams commit to continually tracking and analyzing measures on an ongoing basis, not just annually. This enables them to identify performance gaps early.

For the sample sustainable packaging strategies, key measures could include:

• "% of R&D facility dedicated to plant-based solutions"
• "% of packaging products converted from plastic and foam"

By monitoring these percentages the teams can determine if the product R&D and redesign initiatives outlined in the strategies are truly having an effect. The measures provide the proof of execution.

Building an Effective OGSM Template

While creating an OGSM requires some effort, the framework itself is straightforward. Simply follow these five steps to create an OGSM template:

1. Define Your Qualitative Objectives

Start by writing down the 3-5 major strategic objectives you want to accomplish over the next 3-5 years. These should be qualitative, vision-based statements that say what you want to achieve. Some examples:

• Become the #1 provider of green energy solutions
• Pioneer an innovative client experience
• Expand services across 10 new global markets

2. Set Quantitative Goals for Each Objective

With your objectives framed, get more specific by outlining measurable goals for each one centered around targets, timelines, volumes or percentages. For example:

a. Be the #1 provider of green energy solutions

• Attain 25% market share by 2026
• Grow customer base from 5,000 to 20,000 by 2026

b. Pioneer an innovative client experience

• Achieve 90% customer satisfaction score by 2026
• Reduce service requests by 30% by the year 2026

3. Define Your Strategic Initiatives

Now detail the high-level game plans – or strategies - required to hit those markers of success. These will likely involve launching initiatives around things like:

• New products or services
• Improved processes
• Geographic expansion
• Partnerships
• Training and development
• Technology infrastructure

4. Outline Your Measures

Measures quantify your progress towards goals through concrete KPIs. Good metrics to include are things like:

• Revenue
• Market share
• Customer acquisition
• Employee retention
• Sales quotas
• Process efficiency
• Product quality

5. Review and Align Your OGSM

With an initial draft complete, scrutinize each component to ensure proper connectivity and flow. Objectives should drive goals, goals should inform strategies, and strategies should impact measures. Look for any weak links or gaps that could undermine execution. Refine as needed until satisfied.

Once finished, you have an OGSM template ready for execution! Be sure to revisit it at least annually to evaluate progress and realign as necessary.

Real-world Examples of Companies Using OGSM

To understand how impactful the OGSM methodology can be in activating business strategy, let’s look at a few real-world examples.

Procter & Gamble

Procter & Gamble (P&G) is a global consumer goods company with over $84 billion in annual revenue. As an early adopter and advocate of the OGSM (Objectives, Goals, Strategies, Measures) strategic planning model, P&G serves as an exemplary case study for implementing OGSM across a massive, complex organization.

1. Implementation

P&G has fully integrated the OGSM methodology into its global strategic planning and management processes. This ensures alignment on priorities from the executive team down to country and brand teams.

2. Objectives

P&G starts by defining 3-5 year objectives tied directly to the company’s overall purpose, values, and growth ambitions. For example, an objective may be “to achieve sustainable organic sales growth ahead of key competitors in priority markets.” Keeping the objectives tied to overarching corporate principles provides focus and guidance for goals and strategies.

3. Goals

Next, quantitative goals are established to measure progress towards the 3-5 year objectives. Goals are specific, ambitious, and timed, cascading from the corporate level to business units. An example goal would be “achieve 5% organic sales growth in Feminine Care category in North America by FY 2026.” Regional, country, and brand teams then further break down goals.

4. Strategies

P&G develops strategies across businesses, brands, product categories, regions and functions all aimed at achieving the defined goals. Strategies may include product innovation pipelines, channel prioritization, pricing actions, media investment shifts, pack size architecture, and other tactical choices. Robust analysis informs strategic choices to allocate resources to highest potential opportunities.

5. Measures

Finally, P&G establishes regular tracking of key performance indicators (KPIs) to monitor progress versus goals and enable course correction if needed. Dashboards are created for different levels of the organization to maintain visibility into what’s working or needs adjustment. KPIs tracked depend on the objective but typically include consumer reach, market share trends, revenue and profit delivery, and other impact metrics.

6. Impact

P&G’s effective adoption of OGSM over decades has directly contributed to both consistent growth and strengthening of its competitive advantages:

• Strong annual organic sales growth ahead of industry benchmarks
• Leading global market share positions retained and extended
• Balanced growth across business segments and regions
• Consistent value creation through economic cycles
• Clear line of sight on priorities flowing from the top executives to country brand teams

Without OGSM, it would be nearly impossible for P&G leadership to effectively steer such a large global ship. OGSM provides the structure and discipline - from objectives to measures - to drive accountability and ownership at all levels.

Toyota

As the world's largest automotive manufacturer, Toyota has leveraged the OGSM (Objectives, Goals, Strategies, Measures) model as a core framework for strategic planning and operations. This has enabled the company to translate high-level objectives around quality and reliability into quantifiable goals, operational strategies, and performance measures.

1. Implementation

Toyota has fully embedded the OGSM model into its global manufacturing and operational strategy, aligning high-level objectives with on-the-ground execution across plants, teams, and supply chains to ensure consistent quality and efficiency.

2. Objective

Toyota set a long-term qualitative objective to be viewed by customers as the most reliable and highest quality car brand in the world. This objective stems directly from founder Kiichiro Toyoda's vision that the automaker must make cars with the highest quality and durability.

3. Goals

• Improve the efficiency of the production system by 50% by the year 2026
• Reduce warranty claims by 80% by the year 2030

Toyota translated its high-level objective into specific quantifiable goals around quality, production efficiency, and warranty claims. Setting measurable time-bound goals has enabled the company to benchmark progress and keep teams aligned around the long-term objective.

4. Strategies

• Implement 'Built-in Quality' approach across design and manufacturing
• Introduce 'Just in Time' (JIT) flexible production system
• Utilize continuous improvement (kaizen) philosophy at all levels

To achieve its quality and efficiency goals, Toyota deployed three core manufacturing strategies:

• Built-in Quality approach to optimize quality control throughout the design and production processes
• Just in Time flexible production to improve flow and efficiency
• Kaizen continuous improvement philosophy to drive ongoing refinements

These interlinked strategies provide the foundation for Toyota to meet its objectives and goals.

5. Measures

• Defects per 100 vehicles metric tracked weekly for each factory
• Overall Equipment Effectiveness (OEE) score to measure production efficiency
• Customer returns/complaints measured through warranty claims data

To benchmark progress on its goals, Toyota established detailed performance measures down to the factory level, including:

• Defects per vehicle rates tracked weekly
• OEE scores on asset utilization, performance and quality
• Customer warranty claims data

These quantifiable measures have enabled Toyota's lean operations model, providing transparency into progress towards long-term goals.

6. Impact

Toyota's OGSM-driven strategy for manufacturing has led to industry benchmarks around operational excellence. Despite higher operating costs from predominantly domestic production, Toyota has achieved:

• Over 50% improvement in production system efficiency vs. 1990s levels
• Approximately 80% reduction in warranty claims since 2000

Through OGSM planning, Toyota has been able to continuously refine and improve its manufacturing system over decades. This has led to significant quality and efficiency improvements enabling Toyota to minimize costs while commanding premium pricing based on its reputation for reliability.

Key Takeaways

The OGSM methodology is invaluable for organizations looking to convert ambitious visions into executable strategic plans that yield real results. Some key lessons around activating strategy with OGSM:

• Condense strategies into one actionable roadmap everyone understands
• Set quantitative goals and timeline-based metrics
• Connect all objectives with tactical execution plans
• Continually measure performance against targets
• Review frequently to assess and realign as needed

By putting in the effort to develop a robust OGSM model, you gain the clarity, transparency and focus needed to cascade top-level aspirations into bottom-line impact – no matter the size or scale of your business.