Practical application of the minimalistic OGSM framework for designing functional and strategy scorecards by setting goals and performance measures.
Decomposition Method
As explained in the Comparison of Strategic Planning Frameworks, each business tool suggests its approach to breaking down complex challenges into specific tangible parts.
In the case of OGSM, the framework recommends focusing on various levels of abstraction regarding the aspirations of the organization:
- Objectives
- Goals
- Strategies
- Measures
The final decomposition criteria (e.g., decisions between objectives and goals) are subjective and depend on the perception of the strategy team. For this reason, we placed OGSM in the quadrants that correspond to the decomposition based on internal factors. Additionally, OGSM provides a simple structure to describe the strategy. Therefore, on the ecosystem diagram, we placed it in the strategy description segment.
Classical OGSM in BSC Designer
To automate classical OGSM in BSC Designer, we can simply create a hierarchy of three levels (Objectives, Goals, Strategies) and add the final level with action plans and progress measurements. This structure serves as a perfect starting point for further discussions about strategy.
Accessing OGSM Template
You will find the OGSM template among other business frameworks available in your account. To access it:
- Go to the “My Scorecard” section
- Select New > New Scorecard > More templates
- Use search to find OGSM framework
Scaling OGSM with Scorecards
The decomposition suggested by the OGSM framework is supposed to cover the entire strategy of the organization. However, considering the complexity of the current business landscape, this may not be practical and could result in a hierarchy that is challenging to maintain.
A practical solution to this is scaling into separate strategy and functional scorecards, where:
- Each scorecard focuses on the dedicated problem area
- Scorecards connected by key objectives form a hierarchy
In the case of BSC Designer, this is automated with cascading by normalized goals or perspectives.
Measurements in OGSM
The framework doesn’t specifically define whether measurements should be applied only to the last level (strategies) or also to the level of goals and objectives.
In practice, applying measurements to strategies allows the automation software to automatically calculate the aggregated performance for the goals level and the overall performance of each objective.
To enhance the performance measurement model:
- Focus on a combination of leading and lagging measurements
- Use weights to differentiate the importance of certain strategies over others
Definition of Risks, Hypotheses, and Rationales in OGSM
Since the introduction of OGSM in the 1950s, strategic planning science has evolved to include risks, hypotheses, and rationales as must-have supporting details for a strategy. While not specifically defined in OGSM, these concepts align well with the idea of supporting attributes for action plans.
For example, users of BSC Designer can use the same “Initiatives” entity to map their goals, risks, or hypotheses.
OGSM Dashboard
A simple OGSM dashboard can be presented with two diagrams:
- The list of goals and objectives
- The list of action plans where one of the columns shows the progress of the “aligned indicator”
OGSM compared to other frameworks
In comparison to more sophisticated goal-setting and strategic planning tools, OGSM is quite minimalistic. It focuses on a simple hierarchical structure with fixed levels of decomposition. This simplified fixed structure was intentional, as in the middle of the 20th century, there were no automation tools (not even Excel spreadsheets) to effectively support more complex decomposition cases.
You might face the limitation of OGSM when some challenges won’t fit well into the fixed objective-goal-strategy format, requiring more levels of decomposition. The solution would be to expand the predefined format and add more levels or, as discussed above, scale into separate scorecards. By adding some guiding policy about the choice of the goals, we could easily convert OGSM into OKR.
The definition of causality is an aspect that can be improved in the framework. Similar to Hoshin Kanri, the logic of OGSM is that all the ‘strategies’ are the drivers for the goals and objectives. This aspect is much better captured by the Balanced Scorecard, where there are two driver perspectives and two outcome perspectives.
What's next?- Follow our Strategy Implementation System to align stakeholders, strategic ambitions, and business frameworks into a comprehensive strategy.
- Automate strategic planning with BSC Designer by organizing goals, initiatives, risks, and KPIs into scorecards.
More About Strategic Planning
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