I have used OGSM for nearly three decades, over half of my career. Through my tenure at Procter & Gamble and Campbell Soup, we used OGSM to align our business units globally and in my years as a consultant, we have used OGSM to develop and execute strategic plans for hundreds of organizations. A colleague who receives our newsletter recently asked me in jest when I would stop talking about OGSM in our articles. My answer was simple: when it stops working.
To this day, OGSM remains ArchPoint’s and thousands of companies’ preferred framework for strategic planning because:
- It aligns leaders and teams.
- It clearly outlines the strategies and actions a company must take to achieve its goals.
- It can be cascaded down and communicated to all levels.
- It forces leaders to be realistic about what can be achieved.
- It is comprehensive, but not complicated.
Over the past few years, the proliferation of information – and misinformation – about OGSM has spread. We see “OGSMs” in the form of team planning tools and simple action plans. We hear of “OGSMs” being built with no preparation, in a single half-day session, for large organizations with thousands of employees.
OGSM was always designed to be the most important plan of an organization. Your OGSM should be your business plan.
OGSM works when the original intent of the framework remains intact, which is to set a direction, align your team, and run the business. Leaders can use OGSM as their roadmap to move an organization from point A to point B – how to best allocate resources, fill in capability gaps, optimize their portfolio, and keep tabs on how choices made directly and indirectly impact other areas. OGSM can help managers be more effective leaders by providing a framework for teams to visualize how their work impacts the strategic direction of a company. When used in this way, the document has gravitas and carries weight in an organization. When used for other purposes like a project action plan, it dilutes the importance of the document and diminishes the original intent. Our team has worked to remain true to the origins and intent of the framework, and we believe this has led to our clients’ continued success with OGSM.
A chair is designed for sitting and can break if used for standing, so can company strategy.
Choose the right tool: OGSM versus action plan
Procter & Gamble introduced OGSM as a standard approach to business planning that could be scaled globally. If a manager was responsible for multiple geographic regions, there was a common framework in place regardless of the territory. This allowed for quick and easy scale interpretation.
ArchPoint utilizes P&L responsibility as a litmus test of whether a team requires their own OGSM. In practice, you would need an OGSM at the corporate level and cascade that OGSM to divisions, geographies, or teams with P&L responsibility. The multi-functional nature of the team, along with P&L responsibility, is what warrants its own OGSM to connect strategic activity across the organization to deliver results.
Conversely, single-function teams like Human Resource and Operations do not require OGSMs. These teams are in support of P&L delivery. For these teams, action plans, team charters, and other tools are sufficient to frame goals, key activities, and other information required to effectively contribute towards the OGSM. Many years ago, we helped implement OGSM in a Fortune 500 company at the global corporate and regional levels. The company embraced OGSM fully, but the discipline required to maintain the document’s authority fragmented, and almost every major department had their own OGSM. There were hundreds. This led to competing objectives, and confusion on which OGSM had priority. Who wins in a conflict between a functional priority and a business plan priority? In our perspective, strategy development should be a collaborative process but when push comes to shove, the tie-break goes to the P&L holder. They have fiduciary responsibility back to the corporation and must be good stewards of their resources. This discipline helped our client get back on track and put guardrails in place.
The process for building an OGSM requires time, data and insights, tough choices, and an aligned team. Our experience is there are no short cuts. This work requires discipline and diligence. When building your OGSM, my advice is simple: seek experienced, reliable sources, and do not use a hammer when a screwdriver is required.