Cascading the OGSM
The purpose of cascading OGSM is to link the Strategies of the organization up and down the hierarchy of the organization. Cascading facilitates the top-down and bottom-up flow of information, strategically aligning work at every level. When cascaded downward, it provides clear direction to support functions and personnel, while bottom-up flow offers feedback on the resources and timing required to accomplish the Strategies.
On average, there are three to four levels of OGSMs linked to drive alignment deep into the organization:
- Level 1 = Corporate
- Level 2 = Global Business Unit
- Level 3 = Market
- Level 4 = Commercial P & L owner
A cascade may look like this:
Should functional leaders develop OGSMs too, or is there a more appropriate tool?
The best practice is for profit and loss owners at the corporate or business unit level to develop OGSMs. Other functional leaders who need to direct organizations from the top down work from specific planks of the OGSM platform called SIMs (STRATEGIES, INITIATIVES, MEASURES). OGSM works best with clear strategic leadership from business units on priorities. Functional partners align their SIMs to support business unit plans. Seldom does a functional organization branch off in a direction counter to the business unit. The sequencing of planning is for business units to develop their OGSM first, and then the enabling functions develop their SIMs to support the execution of the divisional OGSM — never the other way around.
SIMs (Strategies, Initiatives, Measures)
Discussing the role of SIMs in the organization requires a return to the basic principles of OGSM — strategic alignment, transparency and deployment. The principles of the SIM process are no different:
- Give the organization leaders transparency to the strategies and priorities of the function.
- Align the leaders to the right work.
- Deploy that direction to the functional leaders who are responsible for executing the plan.
The SIM is always aligned to the needs of the corporate or business unit OGSM. The SIM should clearly communicate how it supports the OGSM. Support functions are not the end. They are a means to enable the business unit to reach the end—or a successful execution of the OGSM, which leads to winning in the marketplace with customers.
What is the SIM communicating to the organization?
Once the SIM is completed, the purpose and strategy of the function is clear and can be communicated. The role of the SIM is to clarify what capabilities (processes/programs/materials) need to be built — and what competencies (skills to successfully accomplish the tasks) need to be developed to support the business OGSM.
Do SIMs have the same life cycle as an OGSM?
Yes. Since the OGSM is a 3-to 5-year endeavor, the SIM should be the same.
If a function is responsible for directly delivering either the initiatives or measures listed on an OGSM, should these be included in the SIM?
Yes. The functional leader will want to review the corporate and/or business unit OGSM for those areas that the function directly owns or supports. If an initiative or measure is owned or supported by the function, then it needs to be reflected in the SIM.
Does the SIM cascade the language of the business unit strategies?
The answer is, it depends. The SIM can reflect the words directly from the OGSM it supports, but the general rule is that no direct strategy cascades unless the function owns or supports the strategy. For example, if the business unit OGSM has a people and culture strategy, and the human resources function is the owner of that strategy, then a direct cascade would be acceptable.
How does the SIM’s cascade work?
Just as the OGSM is primarily cascaded to the P&L owners, the SIM is no different. The SIM cascades to the functional leaders down through the organization. For example, cascading the SIM through human resources by levels:
- Level One – Corporate HR SIM
- Level Two – Business unit HR SIM
- Level Three – Geographic/market HR SIM
- Level Four – Individual action planning within the geographic/market area
The SIM leader at each level of the cascade has to align the business OGSM he or she supports and the one-up level SIM.
A cascade including SIMS might look like this
Which master should a SIM serve – corporate/segment OGSM or one-up level SIM?
The SIM is first aligned to support the needs of the corporate or business unit OGSM, and then to any capabilities that the function needs to develop. The SIM is subservient to the business OGSM.
Importantly, this does not remove the responsibility of the functional leaders to build the capabilities and competencies that their function owns in the organization, but requires alignment on how resources and work priorities are executed. Sometimes the SIM priorities need to be diverted to address short-term functional needs of the business OGSM.
Bottom-line, if the business unit OGSM is successfully delivered and some of the functional initiatives are missed, it is still considered a successful year.