Planning frameworks: OKRs vs. OGSMs
This article examines both OKR & OGSM methodologies and contains the following sections:
Difference between OKRs and OGSMs
Best practice – setting OKRs and OGSMs
What are OKRs and OGSMs?
OKRs and OGSMs are planning frameworks that facilitate the definition and achievement of strategic and operational targets. They provide structure to strategic- and operational-level implementation plans and are used at all organizational levels: whole-of-org, departmental, team, and individual. They are fundamental in guiding an organization toward achieving its strategy and fulfilling its purpose.
OKRs — Objectives and Key Results: Objectives are high-level outcomes that must be achieved. Key Results are measurable, "mini-outcomes" (targets) that must be accomplished to achieve each objective. Each objective typically has multiple key results describing how it will be achieved. Where possible, key results complement each other to facilitate logical efforts to achieve objectives. Consider the example below.
OGSMs — Objectives, Goals, Strategies, and Measures: Objectives are the same as in OKRs, and Goals are equivalent to "KRs". Strategies are actions for achieving each goal. Measures are KPIs set against each goal to confirm whether the strategies work. Where possible, goals also complement each other to facilitate logical efforts to achieve objectives. Consider the example below. Take note that we have renamed strategies (S) to actions and measures (M) to KPIs.
Difference between OKRs and OGSMs
As illustrated above, OGSMs build on OKRs by describing the actions that must be pursued to achieve each goal. Furthermore, OGSMs establish measures (key performance indicators - KPIs) that benchmark progress toward achieving goals and objectives.
OGSMs, therefore, represent a more comprehensive plan for achieving organizational targets.
Best practice — setting OKRs and OGSMs
Objectives should not include metrics and should be written as outcome-based, broad statements. So, try combining an adjective with a noun (see example above: "happy" - adjective, "customers" - noun).
KRs and Goals include metrics but are written as outcome-based, specific statements. Try using past tense verbs (see examples above: "conducted,” “implemented,” and "increased").
Strategies are actions. So, try using present tense verbs (see examples above: "prepare,” “identify,” “train,” “create,” and "incentivize"). If required, include metrics.
Common misconceptions
"OKRs are leaner and better for start-ups:" While OKRs are leaner, they ignore how outcomes (objectives, goals) are achieved. This must eventually be confirmed and OGSMs address this directly.
"OGSMs are top-down heavy and represent an old corporate WoW." Both OKRs and OGSMs can be developed top-down or bottom-up. Additionally, OGSM methodology is flexible and can be adapted to suit modern, agile organizations.
"OKRs are set only for short-term implementation periods:" An organization can choose whatever implementation period best suits its needs, such as 3, 6, or 12 months.
Which is better — OKRs or OGSMs?
OKRs are good, but OGSMs are great as they address how outcomes are achieved and identify key performance indicators (KPIs). Eventually, these discussions are needed, so it's best to do them early. This helps improve resource planning, budgeting, and organizational alignment.
Rules are meant to be broken
Ultimately, either framework can be adapted to best suit an organization’s needs. For example, it can use both top-down and bottom-up development approaches, change naming conventions (e.g., "strategies" to "actions"), and adjust implementation period timing. The type and extent of customization depends on the needs of your organization.