All concepts

Frameworks

OGSM

In 2015, Coca-Cola, a multinational Fortune 500 company, struggled with stagnant sales, an increasingly fragmented beverage market, and rapidly changing consumer preferences. To address these challenges, Coca-Cola’s then-CEO, Muhtar Kent, employed the OGSM framework to refocus the company’s strategy and drive growth. Through this framework, Coca-Cola could define its objectives, clarify its goals, and develop strategies and measures to achieve them.

The company set a clear objective: to double its revenue by 2020. To achieve this, Coca-Cola established goals that focused on four key areas:

  • Increasing consumption of non-alcoholic beverages
  • Expanding its product portfolio
  • Optimizing its distribution network
  • Enhancing its marketing and communication efforts

With these goals in mind, Coca-Cola’s leadership team crafted a strategy emphasizing innovation, global reach, and cost efficiency.

One of the initiatives Coca-Cola launched as part of its strategy was the “One Brand” global marketing campaign. This campaign aimed to consolidate the branding and messaging of Coca-Cola’s various product lines, including Coca-Cola Classic, Diet Coke, Coca-Cola Zero, and Coca-Cola Life, under one unified brand. By simplifying and unifying its branding, Coca-Cola positioned itself to engage with consumers and convey its commitment to offering a diverse range of beverages.

Additionally, Coca-Cola streamlined its product portfolio, discontinuing underperforming brands and introducing new products that catered to evolving consumer tastes, such as healthier and more sustainable options. The company also optimized its distribution network by investing in its bottling partners and improving its supply chain efficiency.

To measure the success of its strategies, Coca-Cola implemented a range of performance indicators that tracked financial performance, market share growth, and brand health.

The Beginning of the OGSM Framework

The OGSM framework has its roots in the work of Dr. Kazutoshi Koshi, a Japanese business consultant who first developed the concept in the 1950s. Dr. Koshi was a highly respected management expert who worked with numerous multinational companies to help them improve their strategic planning processes. His pioneering work laid the foundation for the modern OGSM framework, refined and adapted by many other management experts and practitioners.

Dr. Koshi initially developed the OGSM framework as a response to the challenges faced by companies in post-war Japan. At the time, Japanese businesses were seeking ways to rebuild and grow in a highly competitive global market. Dr. Koshi’s OGSM framework provided a structured approach to strategic planning that enabled companies to set clear objectives and goals, devise effective strategies, and measure their progress.

Over the years, the OGSM framework has gained widespread recognition and acceptance, mainly due to the efforts of numerous management experts who have built upon Dr. Koshi’s original concept. Today, the OGSM framework is widely used by companies across the globe, from small businesses to Fortune 500 companies, to drive strategic growth and improve organizational performance.

What is OGSM Framework?

The OGSM framework is a strategic planning tool for Objectives, Goals, Strategies, and Measures. It provides a structured approach to setting clear and achievable objectives, defining specific goals, developing actionable strategies, and establishing quantifiable measures to track progress. Organizations can use the OGSM framework to ensure their strategic planning efforts are focused, aligned, and effective.

The OGSM framework stands for:

  1. Objectives: These are high-level, qualitative statements describing an organization’s desired outcome or vision. Objectives are broad, long-term, and directional, providing a clear sense of the organization’s purpose and aspirations.
  2. Goals: These are specific, quantifiable targets that support achieving the objectives. Leaders typically define Goals in terms of key performance indicators (KPIs) or other measurable outcomes, and they are time-bound to ensure that progress can be tracked and evaluated.
  3. Strategies: In OGSM, Strategies outline the key actions, initiatives, or approaches the organization will undertake to achieve its goals. Strategies should be actionable, practical, and aligned with the organization’s strengths and resources.
  4. Measures: Organizations use measures as quantitative or qualitative indicators to assess progress toward the goals. They help track the strategies’ effectiveness and provide a basis for continuous improvement, adjustments, and decision-making.

The OGSM framework offers several benefits for organizations:

  • It provides a transparent, structured approach to strategic planning, making communicating and aligning around a shared vision easier.
  • Ensures that all levels of the organization work towards common objectives and goals, fostering collaboration and teamwork.
  • Allows for ongoing monitoring and evaluation of progress, making it easier to identify and address any issues or obstacles that may arise.
  • OSGM facilitates a results-oriented culture with a strong focus on continuous improvement and data-driven decision-making.
  • It helps organizations prioritize resources and efforts, ensuring business units allocate time and resources effectively to support strategic goals.

By using the OGSM framework, organizations can create a well-defined strategic plan that aligns all stakeholders, sets clear expectations for performance, and provides a roadmap for achieving success.

Real World Example

Let’s look at how Procter & Gamble (P&G), a Fortune 500 company, used the OGSM framework to drive growth and improve efficiency across their business segments. P&G is a multinational consumer goods company offering various products in various categories, such as personal care, household cleaning, and healthcare.

Objective: Increase P&G’s global revenue by 10% and improve overall operational efficiency by the end of 2021 while focusing strongly on sustainability and social responsibility.

Goals:

  1. Expand P&G’s market share in emerging markets by 5% by the end of 2021.
  2. Launch ten new innovative and sustainable products across different categories by the end of 2021.
  3. Increase digital sales revenue by 15% by the end of 2021.
  4. Reduce carbon emissions and water usage in P&G’s manufacturing facilities by 10% by 2021.

Strategies:

  1. Market Expansion: To expand P&G’s market share in emerging markets, the company will invest in targeted marketing campaigns, forge strategic partnerships with local distributors, and adapt its products to better cater to local consumer preferences.
  2. Product Innovation: P&G will invest in research and development to create innovative and sustainable products that appeal to environmentally-conscious consumers. This step will involve prioritizing using eco-friendly materials and packaging and focusing on product performance and value.
  3. Digital Transformation: P&G will enhance its digital presence by improving its e-commerce platforms, investing in digital marketing, and utilizing data analytics to better understand consumer behaviour and preferences. This strategy will help the company better target its marketing efforts, optimize its product offerings, and improve customer experience.
  4. Sustainable Operations: P&G will implement measures to reduce its environmental footprint by investing in energy-efficient technologies, optimizing water usage in manufacturing processes, and reducing waste. The company will also engage in corporate social responsibility initiatives to improve its reputation and build goodwill among consumers.

Measures:

  1. Market Share: P&G will track its market share in emerging markets using data from market research firms and internal sales figures. The company will measure progress towards its 5% market share expansion goal every quarter.
  2. Product Launches: P&G will monitor the number of new innovative and sustainable products launched, aiming to reach ten by the end of 2021. The company will also track these products’ sales performance and consumer feedback to evaluate their success.
  3. Digital Sales: P&G will track its digital sales revenue, aiming for a 15% increase by the end of 2021. The company will monitor its online traffic, conversion rates, and customer engagement metrics to gauge the effectiveness of its digital transformation strategy.
  4. Sustainability Metrics: P&G will monitor its carbon emissions, water usage, and waste reduction in its manufacturing facilities, aiming for a 10% reduction in each area by the end of 2021. The company will also track the outcomes of its corporate social responsibility initiatives, such as community impact and employee engagement.

By using the OGSM framework, P&G was able to develop a clear and structured strategic plan that allowed the company to align its resources and efforts toward achieving its objectives. Furthermore, this approach ensured that P&G maintained a strong focus on growth, innovation, and sustainability while improving efficiency and fostering a results-oriented culture. As a result, P&G successfully navigated the challenges of a competitive market and continued to build on its position as a global leader in consumer goods.