OGSM and STAR are two highly practical management models that were once widely promoted by the company, but over time and with personnel changes, these good tools have faded from our view, with few knowing them and even fewer using them. In recent marketing work meetings, I noticed a department manager using OGSM to describe key work in an advanced manner, with neat content and clear strategies, so this article aims to introduce the usage of these two tools in detail for the benefit of more colleagues. Today, I share this article on the internet to share with more FMCG industry friends.
When talking about OGSM, we must first mention the SWOT method and its limitations. SWOT is the most basic analysis tool; its value lies in providing an opportunity for self-assessment, but the problem is that SWOT often gives us the illusion that problems are very simple. In fact, determining a company's strengths and weaknesses, assessing the impact and probability of opportunities and threats, and then combining opportunities with strengths is far more complex than it appears. Moreover, besides analyzing the four elements of SWOT individually and in combination, this model does not provide additional tools to help users form strategic decision-making plans from basic analysis.
This requires further use of the OGSM model to specifically describe strategic planning, and then use STAR to implement the strategic plan step by step. For us, this is essentially the content of business plans at different stages.
- What are OGSM and STAR: OGSM is a strategic thinking tool, a planning and execution management tool that helps you clarify your main objectives and key strategies, typically used to formulate company strategic plans and future development blueprints. STAR is an action tool at the tactical execution level.
Briefly explain the difference: OGSM pursues effectiveness, doing the right things, solving the problem of what to do; STAR emphasizes efficiency, doing things right, solving how to do and how to achieve the goals set by OGSM.
OGSM (Strategic Thinking) answers: What will we achieve? How will we achieve it? How do we know if we have achieved it? It is the acronym of the following four English words: O: OBJECTIVE (Overall goal, purpose), i.e., non-quantified business indicators expressed in words, usually 1 or 2, derived from: 1. Self-set based on one's role; 2. Set by superiors, such as guidance from management; G: GOAL (Specific business goal), i.e., specific quantifiable indicators, such as annual sales targets; G is a further refinement of O, but it must be noted that stage goals cannot be evenly distributed. Every time I organize various data for the group, I notice that during the group's strategic expansion phase in 2003-04, there were beautiful reports and performance. In 2010, the group entered a strategic adjustment phase, requiring deep cultivation of the market, so stage goals were more moderate. Evenly distributing stage goals is unrealistic and cannot be effectively executed. Therefore, this year's sales target breakdown will exclude the objective factors of January and February; old products will have stable target volumes from March, while new product target volumes will increase as new products are developed and launched.
S: STRATEGY (Development strategy), i.e., how to reach the goal, how to allocate and utilize resources to achieve the predetermined goal. If the purpose is the decision and direction, strategy is the choice made to achieve the purpose. There should not be too many strategies; too many will lose focus and disperse resources, so choices must be made, usually limited to 5 or fewer. Here, the key is to use the STAR model to break down strategies. Strategies typically include business strategy and organizational strategy: Business strategy is how we win competitive advantage; we must do some things and not do others, usually referring to 2-3 strategic choices over 1-5 years; organizational strategy is how to allocate resources to implement the business strategy.
M: MEASURE (Measurement standard), i.e., evaluating whether plan execution meets goals. Performance assessment must be clear and specific; employees cannot subjectively believe they have completed tasks; task completion needs objective numbers to measure, which requires using charts, with tracking at least monthly.
STAR (Action Plan) is a tactical thinking method that converts strategies into action plans. Here, it is important to clarify that tactics are often multi-dimensional rather than single, for example, the STAR of a sales plan must involve sales personnel, channels, distributors, products, budget investment, etc. The standard is "four can": achievable, measurable, quantifiable, and controllable.
S: STEP (Action steps), i.e., clear action goals, specific actions, from start to finish; T: TIME (Time), i.e., clear time, specific time requirements for completing certain actions; A: ASSISTANCE (Needed assistance), i.e., clearly identify resources needed for coordination, and configure them according to the TIME schedule; R: RESPONSIBILITY (Responsible person), i.e., clear responsible person, and the responsible person knows their responsibilities.
OGSM Model Example Diagram Project | Objective | Goal | Strategy | Measurement | Tactics (Project) | (Overall Purpose) | (Goal) | (Strategy) | (Measurement) | (Action Plan) 1 | What to do overall | What to do specifically | How to do | How to do | How to do (specific items) 2 | Text | Data | Text | Data | Data 3 | | Corresponds to O | Corresponds to G | Corresponds to S
STAR Model Example Diagram Project | STEP | TIME | ASSISTANCE | RESPONSIBILITY (Project) | (Action Steps) | (Time) | (Needed Assistance) | (Responsible Person)
- The Role of OGSM There is a common situation: when you ask a marketing person how they plan to carry out the 2010 sales plan, they might confidently tell you everything is under control, that they fully understand all the strategic intentions conveyed by company management, and that they are very clear about what to do. But if you ask them to describe their work plan using the OGSM model, they might not be able to do it at all or describe it incompletely. This is not because their writing is poor or their logical expression is insufficient, but because they do not have clear and systematic thoughts, have not precisely analyzed the problems facing their market, and have not seen the core. Therefore, they do not have clear purposes and goals, nor a timeline to achieve these goals, and certainly cannot be clear about what to focus on and what to give up under limited resources (as management will inevitably continue to upgrade and demand more) – this is the role of OGSM.
OGSM forces you to systematically organize your most basic, simple, and intuitive ideas when making work plans, effectively helping you pre-examine your plans. In other words, the OGSM strategic planning system can help you solve three problems:
It can analyze clear and realistic strategic goals;
It can analyze and quantify the relationship between strategy and current situation, obtaining the path to achieve the strategy;
It can reasonably allocate and utilize resources, achieving the purpose of strategy guiding tactics, making everything you do closely related to the strategy. For example, from the group's strategic goals to annual sales targets, from annual targets to product, channel, personnel, and budget investment strategies, from business and organizational strategies to specific regions, individuals, and small sales targets, and then from each person's small goals to each promotional activity, each display, and each sales collection, everything is interlinked, allowing every employee to experience the omnipresence of the group's overall strategy, making strategy no longer just the business of the boss or management.
Key Points of OGSM
Your basic purpose is to ensure the achievement of superior goals;
Your G should be a more detailed and precise description of O; goals should be as simple as possible to measure; you cannot obtain overly complex and detailed data sources;
When formulating S, we often list all methods that are conducive to achieving G, which is wrong – remember that resources are always limited; you must find the strategy with the highest ROI that can help you achieve G! The so-called strategy is to do some things and not others, choose the important and abandon the secondary, and choose the lesser of two evils. ROI is the simplest and most effective evaluation method you can adopt;
Ask yourself: following S, can G definitely be achieved? Is it feasible? How high is the feasibility? During execution of S, how much cooperation does A have? Can R's ability achieve the desired results?
Measurement: It is the extent to which R has achieved G within T. The purpose of M is to regularly review and adjust O and G through periodic assessment.
Simple Case: OGSM Model for a Province's March Sales Plan
OBJECTIVE (Overall Goal)
Complete March target and Q1 target gap, ensure 100% quarterly sales achievement
Build core terminal model stores in key cities, promote new product entry
According to the "2010 Product Distribution Guide," complete barcode supplementation for small terminal outlets in designated county and township markets, develop distributors in blank areas, maintain price system to ensure channel profits, and enhance distributor confidence
According to regional manpower budget and staffing, complete recruitment for vacant positions, and after centralized training, staff will take up posts
GOAL (Specific Sales Target) Region | Target Amount (10,000 yuan) Category 1 | Category 2 | Category 3 | Category 4 | Category 5 | Category 6 | Subtotal Total |
STRATEGY (Strategy)
Personnel STAR P | S | T | A | R Sales Representative | Eliminate * / Add * | Before March 20 | Training | *Provincial Office Manager / *Customer Supervisor Management Trainee | Assign internship | Before March 9 | Internship | *Channel / *Customer Supervisor Temporary Market Development Team | Recruit * people | Before March 10 | Training | *Customer Supervisor / *Shopping Guide Supervisor
Channel STAR P | S | T | A | R 2010 Distribution Contracts 90 copies | Complete signing | Before March 10 | Refer to Sales Management Department category target breakdown | *Customer Supervisor Key Terminal Image Stores 500 | Activity execution | All March | Display fees / promotional materials | *Customer Supervisor Quarterly Million Prefecture-Level Cities 30 | Activity execution | All March | Concentrate other resources | *Customer Supervisor Key County and Township Small Terminal Outlets | Market sweeping | Before March 25 | Group temporary staff and management trainees | *Customer Supervisor leads team
Product STAR P | S | T | A | R All products seize channel funds | Spring ordering meeting | Before March 20 | Meeting expense application / meeting policy / new product presentation and on-site ordering plan | *Provincial Office Manager / *Customer Supervisor A certain series | Terminal activities | All March | Planning Center activity expense support | *Customer Supervisor New products | Key terminal entry | All March | Key stores / model store sales | *Provincial Office Manager / *Customer Supervisor
Promotion STAR P | S | T | A | R Image store project | Purchase shelf display | All March | Display fees | *Provincial Office Manager / *Customer Supervisor New product entry reward | | All March | Gifts / promotional materials / BA | *Customer Supervisor / *Shopping Guide Supervisor Million city project | Personnel follow up deep distribution sales | All March | Temporary personnel management / promotional materials | *Provincial Office Manager / *Customer Supervisor
Expense Investment STAR P | S | T | A | R Channel promotion | Channel promotion | All month | 4% of monthly sales | Sales Center / Planning Center Personnel expenses | All personnel | All month | 4% of monthly sales | Human Resources Management Center Terminal promotion | Key systems | All month | 1.5% of monthly sales | Sales Center Note: Sales amount must be actual shipment results.
MEASURE (Measurement Standard) Business Goals Region Personnel | Target Amount (10,000 yuan) | Customer Contract Achievement Rate | Personnel Target Achievement Rate Category | Category | Category | Category | Category | Category | Subtotal Total |
Organizational Goals Project | Budget | ROI | Measurement Personnel expenses | | Per capita output standard for market personnel at each level Key terminal image stores 50 | | Full product shelf display surface / single store output not less than 15,000 2010 distribution contracts 30 | | Missed signing rate / contract target higher than Sales Management Department target by 10% Quarterly million prefecture-level cities 3 | | Actual Q1 shipment for a single prefecture-level city Key county and township small terminal outlets | | Sales growth / outlet count growth A certain series activity execution | | Year-on-year shipment growth for the series / difference rate between actual execution and application New product entry | | Application rate for new product entry in key terminals / difference rate between actual entry quantity and application Others | | (Omitted) Total | Note: New product entry expenses are amortized over 24 months into the group budget.
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