Translating strategy into concrete results is challenging. How do you ensure that everyone in your organization understands what the strategy actually means to them? Various frameworks have been developed to make that translation, such as Hoshin Kanri, OKR and OGSM. In this article we will discuss the OGSM framework and how project portfolio management is linked to it.
What is OGSM?
OGSM is an abbreviaton for Objectives, Goals, Strategies and Measures. It is a method that helps translate the vision into a concrete framework for all employees. Questions such as what the organization wants to achieve, how to do it and at what speed are answered by strategic objectives and goals. Projects and programs (strategies) are then linked to these goals. By measuring the results with KPIs (measures) the success of the projects and programs is monitored.
A clear framework for employees
OGSM is increasingly being used at departmental level to translate strategy into clear and measurable business plans. As a result, employees and managers have a specific strategic framework. Ideas and projects can be scored against them so that the link to the organizational vision is clear for everyone. But what exactly is meant by the terms Objectives, Goals, Strategies and Measures?
The Objectives must fit in with the strategy, be short and have a clear focus. All stakeholders must understand what the strategic objective is and understand it in the same way. An example is “becoming the market leader in the supply of medicins in Dutch hospitals”. The objectives remain relatively general and are still to generic to use for scoring specific initiatives.
The Goals translate the strategic objective into measurable goals. This means that the formulation must be specific, measurable, achievable, relevant and time-specific (according to the SMART principle). Each department can make its own translation; that is precisely the power of the OGSM model. Think of a goal for the Sales department such as “an increase to 10% market share by the end of 2020”. As a guideline it is often assumed that a strategic goal is translated into 3 to 4 concrete goals.
The link between OGSM and project portfolio management
New initiatives (“strategies” in the OGSM terminology) must be connected to at least one of the goals described. Project portfolio management comes into play here. PPM focuses on choosing the right projects. This is only possible if it is clear how those projects contribute to the specific goals. With the OGSM framework, each department or business unit can set its own concrete goals without losing sight of the link with the Objectives.
By scoring the projects on these specific goals, the management gets a very clear picture of why projects should be started. The advantage of scoring projects on the concrete is that employees better understand how a particular project helps the department or business unit to move in the right direction, while not loosing sight of the link with the company-wide objectives.
Make your strategy concrete
In short, in order to make the right project choices, it is very important to translate the overarching strategy into concrete goals that employees understand at departmental level. Without a clear framework, achieving the best project composition is an impossible exercise.
The strategic perspective plays an important role in project portfolio management. Understanding why projects (should) be implemented is the key to actually translating the business strategy into concrete results. Therefore, invest enough time in cascading your strategy to all layers of the organization. It will pay back heavily better choices will be made and the ambition of your organization will be achieved faster.
Bizztracker is a project portfolio management application in the cloud. As a niche player in the ppm market, we focus on strategic, operational and financial portfolio management functionality to successfully manage the project portfolio.
Bizztracker offers you the possibility to setup he different levels of the OGSM framework. Projects can then be scored on concrete goals and rolling up to the higher strategic goals is standard functionality. With out-of-the-box strategic reports, management has all it takes to make choices about the project portfolio. Interested? Contact us for more information.