This week I participated in the board meeting of a large hotel chain. Tough business, you would say, not? Highly competitive, certainly when AirBnB grows and Booking.com eats margins. The manager took accountability 7 years ago of this nice hotel chain. In 7 years time he doubled turnover and increased margins. Nice story, you would say! Right. Though the story does not stop here. The plan is ready to grow next years too. Why do you need a board of advice if everything is run so smooth? We have been working on the 7 year OGSM-plan: how do we double profit by 2026? How can we be even more the reference for great hospitality in the next decade? This was a very enriching exercise. It is a matter of setting ambitions and build strategic options.
Many people don’t understand that strategy is simply ambitions or aspiration. The real challenge for most is the definition, prioritization and alignment of the work required to achieve that aspiration.
Business Markers’ strategic planning methodology gives an organization the capability to identity that aspiration or ambition. What do want to achieve? What is our OBJECTIVE ? Watch-out: It is not about doubling profit alone. It’s about what you really want to be, how your customer or stakeholders perceive you. This aspiration will enable you to achieve your goals. 90% of the companies I have visited over past 8 years had no clear ambition or aspiration.
This strategic planning methodology gives an organization also the capability to prioritize work and identify required resources. It gives everyone involved the opportunity to keep the work visible and drive alignment throughout the organization. Importantly, it helps leaders determine what the organization can actually do based on available resources.
OGSM is Business Markers’ preferred approach to strategy development and execution. In short, an OGSM is a written and easily communicated statement of an organization’s Objective, Goals, Strategies and Measures. OGSM brings alignment, transparency of priorities and metrics that define success. OGSM frames what the business needs to achieve and how it’s going to get there. The OGSM defines success and helps groups work together across functions, geographies and up and down the line.
OGSM is a world-class strategy model that transforms objectives, goals, strategies and measures into actionable and executable plans. The origins of OGSM stretch back to the 1950’s with roots in Management by Objectives. In the 1980s, Procter & Gamble popularized OGSM as a means of aligning the direction of their corporation around the globe. That’s where I learned it. Many Fortune 500 companies as well as smaller organizations have adopted OGSM to build and execute their strategic plans. Business Markers, the Belgian and soon German leader in OGSM methodology, has helped many big and small clients develop and implement OGSM.
The OBJECTIVE sets the direction for the organization for the next three to five years. This statement describes the ambition of the business and answers the question: What are we trying to achieve? The Objective should define the playing field and the rules for winning. An Objective is a constant and meaningful reminder to the organization about what success looks like in the future. An effective Objective statement is not generic or easily adoptable by others; it is a customized, business-specific view of where the business is headed. Importantly, this is not just an organization’s vision or mission. Those statements have an even longer time horizon. The Objective is time-bound to focus the organization. Though in case the vision and mission are not existing, it is a first starting point.
Goals are numbers that define what success looks like over a three-to-five year time horizon. These GOALS are usually financial and/or operational and make the Objective visible in measurable terms. Goals should be more strategic in nature, defining the financial health and guiding the direction for the strategic choices. The Goals of an organization answer the question, “what must we accomplish?” in terms of critical targets.
Strategies are words that provide explanations and descriptions of specific choices that focus an organization’s plans toward accomplishing the desired Objective and Goals. STRATEGIES are built in 3 steps: first question is “what’s the game changer”. Once you identified the strategic battlefields or game changers, you have to describe it in 2 parts: “where do we want to play” or what will this game changer bring us, followed by “how will we win” or giving clear direction to the game changer. Strategies guide the activities and allocation of limited resources across the organization. Strategies are implemented through initiatives and structured work plans called project charters. Strategies tighten choices needed to deliver the Objective, Goals and to win in the market. It’s much more important for Strategies to be written in clear, complete language, not just the name of the game changer of the strategic block.
Measures are numbers that define an organization’s progress toward delivering a Strategy. Each Strategy should have no more than two or three Measures that define whether the Strategy is effective and is having the desired impact. Each Measure is tracked to determine the progress of a Strategy, and used to make decisions regarding any necessary adjustments.
Strategies and Measures are translated into clear Programs (bundle of projects), Projects or Initiatives. These Projects can be in any stage: idea generation, business case development, market launch.
Every organization should challenge itself and create an OGSM for the coming 3 years.
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About Ides Ticket: Founder of Business Markers. Worked at P&G, Coca-Cola and MTV Networks. Member of several boards. Gadget lover, inspirator and challenger, husband, father of Arne and Kaat.
If you would like to learn more about strategy making, telling or doing, feel free to contact me: firstname.lastname@example.org