More and more recently, ArchPoint has been asked about OKR and OGSM. The question has been whether to use OKR or OGSM for strategic planning. Our simple answer is both. OGSM and OKR work hand-in-hand to deliver a full-spectrum strategy approach, setting the strategic direction for the company and making the connection to individual and team efforts to implement the strategy.

Leaders should not advocate solely for one methodology or the other. Using both methodologies creates a feedback loop, with OKRs sitting underneath the strategic plan as a short-term/mid-term execution methodology. But efforts should always begin with a company-wide, overall strategic plan, i.e., OGSM.

OGSM sets the path, OKR walks the path.

OGSM is the plan, OKRs are the execution

As a refresher, OGSM stands for Objective, Strategies, Goals, and Measures. In this framework, the Objective and Goals are what the company needs to achieve, and Strategies and Measures are how they will accomplish the what.

OKR stands for Objectives and Key Results. OKR can be used effectively by departments, teams, and individuals to set direction and metrics. OKRs work best within shorter time frames with smaller groups/individuals for goal setting.

OGSM and OKR Process

OGSM by nature sets the direction, clarifying longer-term strategic choices in the market. But leaders should not stop there – the idea of linking individual and team contributions to help deliver strategy is where OKR comes in. Combining the principles and disciplines of OGSM and OKR produces a top-down, bottom-up approach to strategy that encompasses the full spectrum of requirements for successful development, assimilation, and execution. The ideal development and implementation process is below.

1.     OGSM. Complete external market and competitive assessment and internal performance analysis.

2.     OGSM. Develop the OGSM with your executive leadership team – this is about setting the direction and strategy for the organization.

3.     OGSM. Cascade key elements of the OGSM down to mid-level management.

4.     OKR. Mid-level management works with individuals and teams to create OKRs to deliver the OGSM.

5.     OKR. Each week or month, OKRs are reviewed with management, individuals, and teams.

6.     OGSM & OKR. Individual and team OKRs are reviewed quarterly with executive leadership to validate the metrics identified in the OGSM.

7.     OGSM & OKR. Based on results, individuals, teams, managers, and executives can shift direction as needed to deliver the plan.

The above approach leverages the advantages of both OGSM and OKR. The detail and long-term view of OGSM helps ensure OKR objectives are the right ones and provides direction for teams and individuals – what they should be working on and how they can contribute. The ease of creation and flexibility in OKRs can help provide additional clarity for individuals and teams, who need strategy connected to their daily work. When used as a tool for execution and management routine structure, OKRs can help OGSM come to fruition – and when used as a tool for strategy development and alignment, OGSM can provide the organization with a complete view of the company’s strategy so OKRs can be developed in line with the overall direction.

Comparison of OGSM vs. OKR

A quick comparison on key elements of the two frameworks is below.

Approach (most common use) Strategic plan Team/individual plan
Time frame Longer-term, 3-5 years (although can be done as annual planning) Shorter-term, monthly, or quarterly
Creation point Top-down, beginning with executive leadership and cascaded through divisions/functions Bottom-up, with individuals and/or teams owning development and implementation
Format One-page, highly detailed and comprehensive view of the entire company strategy and how to achieve it Typically, very short with one objective and 3-5 key results describing what success looks like, but does not describe the “how”

As practitioners of strategy, we need to consider both casting the vision and implementing the plan. But we must set the path with a strong strategic plan before we ask our organizations to walk the path. Success comes in having a strategy reflective of the company’s core capabilities and market opportunities. In addition, leaders need to communicate the strategy broadly to win the minds and align actions of the organization. Finally, success comes from consistently measuring and tracking activities and progress.

At ArchPoint Consulting, we believe in the power of OGSM. For more information on OGSM, visit our OGSM Strategic Framework Complete Guide and be sure to download our whitepaper.