From strategy to execution, the key connection point is the design of the strategy that underpins the strategic objectives, that is, the Strategy in the OGSM model, but how to test the completion of the strategy(s)? Is it done? What is the quality of completion? If the strategy cannot be measured and evaluated, how can the annual goal (G) be guaranteed? Therefore, in the OGSM model, the test and measurement of the strategy (S) should be achieved through the measurement criterion (M).
4.M——Measurement。 Metrics. The measurement standard is an evaluation index of the completion of the strategy (S), preferably presented in a quantitative manner, and M is generally formulated in conjunction with S. As shown in the table below, the annual goal is "revenue growth of 30%", the corresponding strategy (S) has been formulated, and the measurement criteria (M) for the development of explosive products are "the number of new products", "the proportion of new product operating income" and "the market share of new products", the latter two are relatively more important measures.
Metric (M) is a procedural evaluation metric for different dimensions of strategy (S).
There are two key issues to consider when developing the measure (M): First, how to distinguish between the measure (M) and the annual target (G)? Obviously, the annual goal is the most important performance result to be achieved by the enterprise in a year, which is the "ultimate" goal, and the measurement standard is the evaluation indicator of a key strategy to achieve the goal, which is more of a process result, and M and G cannot overlap; second, how to grasp the number of settings of the measurement standard (M)? That is, for a certain item of S, how much M should be corresponded to? M setting, test the manager's understanding of the implementation of the strategy (S) and the proficiency of the business, if the business is not familiar, it is difficult to develop a targeted strategy, the corresponding is difficult to set a sharp measurement standard, so the key to setting M is to return to the company's business, have in-depth thinking and understanding of the business. If the number of M is too large, it will lose focus and decentralize the management of resources; if the number is too small, it is impossible to evaluate the achievement of S from multiple angles. In my experience, it is best not to exceed 3 M.S.
Since metric (M) is an evaluation of strategy (S), how can a valuable M be designed? At the methodological level, the Grybert quartile method is generally used to achieve it, that is, to set the measurement criteria from four dimensions, namely quantity, quality, time and cost. The quantitative dimension is well understood, and digital indicators such as operating income, profit, and payment collection belong to the quantity; indicators such as accuracy and satisfaction belong to the quality dimension; and indicators such as speed and timeliness belong to the time dimension. Metrics for expenses are cost dimensions. Enterprises can design the measurement criterion (M) according to the above four dimensions.
The four dimensions of metric design: quantity, quality, time, and cost.
The author has successively discussed the OGSM model in detail, O and G combined to solve the problem of "what to do", and "S + M" to solve the problem of "how to do". Obviously, from the perspective of strategy execution, "how to do" is more important, so business managers need to spend more energy on the implementation of the strategy (S) and the design of the horizontal standard (M), so as to ensure the realization of the annual strategic objective (G), and ultimately the strategic theme (O).
The OGSM model solves the problem of "what" and "how".
The design points of OGSM are: the basic purpose of the subordinate department is to ensure the realization of the superior goal; the goal (G) is a more detailed and precise description of the purpose (O), and the realization of G can ensure the achievement of O; the relationship between the strategy (S) and the goal (O) is the necessity and inevitability. The metric (M) is who (who) and when (when) achieved what results (What), is a quantifiable measure, can be designed from the four dimensions of quantity, quality, time and cost.
Some readers may feel that OGSM is very similar to OKR, so what is the relationship between the two? Indeed, in the OGSM model, O is a qualitative description, to have a sense of picture and motivation, G supportSO from different dimensions, it is best to quantify, these characteristics are almost the same as OKR, but the difference between the two is that OKR is more of a communication tool for enterprise transformation or new business exploration in an uncertain era, the road ahead is long, the future is unknown, it is impossible to define a clear goal, and it can only explore the direction through continuous trial and error and iteration; and OGSM is a tool for strategic landing and execution. The strategic theme (O) and strategic objective (G) are clear, the core is to open up the path to achieve the goal through the formulation of the implementation strategy (S) and the measurement standard (M), and the use of organizational layers of action decomposition to build a chain of responsibility, lock the action and responsibility of the subject, and ultimately ensure the achievement of the strategic goal.
If the formulation of corporate strategy requires "retreat", then the strategy landing and execution need more "pragmatism", more need the support of tools and methods, and the OGSM model will step by step implement the relatively grand strategic theme into an executable strategy and measurement standard through the interlocking, logical causal "purpose-goal-strategy-measurement standard" approach, laying a clear guidance and action direction for the realization of the strategy.