Management by Objectives (MBO) is a popular management approach that focuses on setting measurable goals and objectives that are agreed upon between managers and employees. MBO has evolved over the years and given rise to various management methods, including OGSM and OKR.
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Every successful organization requires a clear set of goals to drive its strategy and ambitions forward. Along the journey, different types of targets and frameworks can be employed to measure progress. Measuring progress is essential for organizations to track their performance, evaluate their success, and make informed decisions. You may have encountered the terms OKRs (Objectives and Key Results) and OGSMs (Objectives, Goals, Strategies, and Measures) and might already be familiar with using one or both of these goal-setting approaches. However, if you find yourself unsure about the nuances between them, you’re not alone.
It’s a common misconception to assume that OKRs and KPIs are one and the same, or that they can be used interchangeably. In reality, these are two distinct goal-setting methodologies. In this article we will answer a couple of frequently asked questions:
- What are OKRs and OGSMs?
- What are the similarities between OKR and OGSM?
- What are the differences between OKR and OGSM?
- How can OKR and OGSM work together?
- What is the advantage of using OGSM compared to OKR?
OKRs and OGSM’s : Similarities and differences
OGSM, which stands for Objectives, Goals, Strategies, and Measures, is an extensive version of MBO. It provides a structured framework for creating a strategic plan that includes a clear mission statement, objectives, and measurable goals, as well as strategies for achieving them and the measures for tracking progress. OGSM aims to create a shared vision and align everyone in the organization towards the same goals.
On the other hand, OKR, which stands for Objectives and Key Results, is a minimalist version of MBO that focuses on setting specific, measurable, and achievable objectives with key results that measure progress towards those objectives. OKRs are typically set and reviewed on a quarterly basis, making them an agile and flexible approach to managing goals and objectives.
Although OGSM and OKR share a common heritage in MBO, they differ in their level of detail and focus. OKR is a great starting point for developing a strategic plan, while OGSM provides a more comprehensive approach for developing a strategic plan that includes a clear mission statement, objectives, strategies, and measures for tracking progress.
By combining OKR with OGSM, you can create a one-page strategic plan that provides a clear and concise overview of your goals, strategies, and measures. The benefits of using both OGSM and OKR are numerous. Here are a few key reasons to consider:
Create a shared vision and alignment
OGSM provides a structured framework that can help align everyone in the organization towards the same goals. When creating an OGSM plan, you start with a clear mission statement that outlines your organization’s purpose and values. This provides a foundation for developing objectives, goals, strategies, and measures that support your organization’s mission. By creating a shared vision, everyone can work towards the same goals, resulting in better collaboration and more effective execution.
Focus on specific and measurable objectives
OKR is a great tool for setting specific and measurable objectives that can be tracked and reviewed regularly. When setting OKRs, you start by defining specific objectives that are important to your organization. You then develop key results that measure progress towards those objectives. By focusing on specific and measurable objectives, you can ensure that everyone is working towards the same goals and that progress can be tracked and reviewed regularly.
Develop a clear roadmap for achieving your objectives
OGSM goes beyond setting objectives and goals by providing a clear roadmap for achieving them. When creating an OGSM plan, you develop strategies that outline how you plan to achieve your objectives and goals. This is particularly useful as it goes beyond just setting goals and objectives to provide a clear roadmap for achieving them. By developing a clear roadmap, everyone can work towards the same strategies, resulting in better collaboration and more effective execution.
Identify gaps and weaknesses in your plan
The structured framework of OGSM makes it easy to identify any gaps or weaknesses in your plan at a glance. By following the four-step process of OGSM, you can ensure that your strategic plan is comprehensive and covers all the necessary aspects of achieving your objectives and goals. This can help you identify any gaps or weaknesses in your plan and address them before they become a problem.
Distinguish between measurement results and action results
Another advantage of OGSM over OKR is that it distinguishes between “measurement results” and “action results.” This is important because you may want to visualize numbers and actions in different ways. For example, measurement results can be visualized using charts and graphs, while action results can be visualized using timelines and project plans. By distinguishing between measurement and action results, you can ensure that your strategic plan is comprehensive and covers all aspects of achieving your objectives and goals.
When combining OGSM and OKR, it’s important to keep in mind that OKR is a minimalist approach to goal setting while OGSM is a more comprehensive approach to strategic planning. However, the two approaches can complement each other to create a strong strategic plan that includes specific, measurable objectives, a clear roadmap for achieving those objectives, and measures for tracking progress.
To create an OGSM plan that includes OKRs, start by defining your mission statement and objectives. Next, develop specific goals that support your objectives and define key results that measure progress towards those goals. Then, develop strategies for achieving your goals and measures for tracking progress.
To effectively combine OGSM and OKR, it’s crucial to maintain a clear and concise plan that includes all necessary components such as your mission statement, objectives, goals, strategies, and measures. To achieve this, consider utilizing a one-page template that highlights the most important aspects of your plan. By creating a streamlined plan that’s easy to understand, you can ensure that everyone in your organization is aligned and working towards the same objectives and goals.
In conclusion, combining OGSM and OKR can create a strong and streamlined strategic plan that includes specific, measurable objectives, a clear roadmap for achieving those objectives, and measures for tracking progress. OGSM provides a structured framework for creating a comprehensive strategic plan, while OKR provides a minimalist and results-driven approach to goal setting that is agile and flexible. By using both approaches, you can create a one-page strategic plan that provides a clear and concise overview of your goals, strategies, and measures, ultimately helping to align everyone in your organization towards the same goals, resulting in better collaboration, more effective execution, and improved organizational performance.
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Did you know: that with OGSM Software you can share quarterly or monthly OKRs with each team member so that they have an easy to use quick overview of what they need to deliver?