B H A G (B-hag) or Big Hairy Audacious Goal is an idea conceptualised by management guru Jim Collins in his 1994 book: “Built to Last: Successful Habits of Visionary Companies”, co-written with Jerry Porras.
If you have not read this book, then I strongly encourage you to.
Back in 1994, this philosophy was certainly ground-breaking, but since then it has been practiced by millions of companies. In a nutshell, a BHAG is introduced in order to set ambitious long-term goals that have the effect of stretching the company’s performance so as to stimulate aspirational success. A Big Hairy Audacious Goal is your long-term goal that unites and shifts the very nature of your business’ existence.
Concrete, concise end goals are what separates successful businesses from the rest of the pack. It is the pursuit of such bold ideas that trigger success for these businesses.
As a minimum, to ensure a strong BHAG, it should:
- Be crystal clear
- Have a specific time frame
Having effective Big Hairy Audacious Goals will change how you do business. This includes the way you are perceived in the industry and perhaps even the industry itself.
As a leader, you, and your entire organization need to be committed, confident (even with a hint of arrogance) and consistently work outside of your comfort zone to make them work.
Your Big Hairy Audacious Goal is BIGGER, BOLDER and more POWERFUL than regular goals. They are 10 to 30-year commitments, yet tangible, exciting and something that requires no further explanation. How do you measure if you have it right? Simple. At first, the B H A G will appear to be unachievable to many, but evokes an emotional response amongst the stakeholders of: “you know what, if we could pull this off it would truly ……”
However, before you get ahead of yourself and start listing out all your goals, make sure you are well-guided on how to do it right.
Check out my 3-part tips on how to create the greatest B H A G:
Part 1: READY…
Discover your Single Organizing Idea (SOI)
As you sail your business into the future, your B H A G should serve as your compass. So it’s critical that it reinforces the fundamentals of your business and be well-grounded in. This means you (I mean organization-wide) must learn to focus and develop competitive excellence in ONE big thing, really well.
A successful B H A G begins when you understand how to simplify a complex world through a single organising thought. Easier said than done, I know. I often remind myself: complexity in something is lazy work, achieving simplicity requires 10 times the effort. And this is what you BHAG requires.
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So, this may work for you in order to figure out your single organizing idea. Answer these three fundamental questions:
1. What could you be the best at, in the whole entire world?
The key words here are “COULD YOU BE”. It’s not a matter of what are you the best at right now. If you were to focus your efforts and energy on one main thing, consider what could happen. What could you be the best at, that if you got right, would provide you with an extreme competitive advantage? It’s very important to answer this with all honesty, and in the process, you also need to acknowledge what you CANNOT really become the best at.
Example: Back in the mid-70’s a young Paul Allen and Bill Gates had the dream of a computer on every desk and in every home. I quote Microsoft here, simply because everyone knows them. It is a great example as they too were once a “garage startup.”
2. What drives your economic engine?
Rather than about metrics, this question is much more of a strategic decision. You need to ultimately understand what one thing causes you to make more money. This is more than any other denominator or ratio in your business.
In order to get real breakthroughs in innovation, you must think beyond the obvious metrics of your industry. What can set you apart from your competition and possibly disrupt the status quo?
In another one of his books, Good to Great, Jim Collins asks:
“If you could pick one and only one ratio – profit per X – to systematically increase over time, what X would have the greatest and most sustainable impact on your economic engine?”
You can ponder on this to help you answer question #2.
3. What are you most passionate about?
One of the key ingredients of a great company is that its people are fully committed and engaged in their work. They are engaged both emotionally (with their passionate hearts) and with their logic side (their heads.)
Identifying a unified purpose of your work and creating an environment that allows your employees to become passionate about what they are doing is a vital piece in getting Part 1 right. So, become intentional about pursuing opportunities that align with that passion and purpose, rather than chasing after every possible opportunity that comes your way.
The idea here is not to push people to be passionate about what they are doing. It is about making strategic decisions that naturally spark passion in your people towards the cause of your business.
The intersection of these three questions is where your Single Organizational Idea develops. It is the work that you have potential to do better than anyone else, that inspires your team and that you can actually make money doing.
Need to have the right discussion to get your Big Hairy Audacious Goal?CALL SEAN
Part 2: SET…
Set the Right Mark: Drafting a Great BHAG
Once you have clarity and intentional understanding of the fundamentals of your company and your Single Organizational Idea, you can then start working on your B H A G.
So how do you know if you have a great B H A G? This is the litmus test of the minimum requirements:
- It’s easy to understand
- It serves as a focal point for unifying team effort
- It guides decisions on a daily basis.
Keeping all of these in mind, you want to set goals that are aligned with your company’s purpose, vision, and values.
Your B H A G needs to be SMART!
Free Ebook on smart goals up for grabs here!
Keep in mind, the purpose of setting this visionary goal is to create a visualisation of what a successful future could look like, so use descriptive wording.
Here are some classic Big Hairy Audacious Goal examples:
“Crush Adidas.” – NIKE
“Yamaha wo tsubusu!” (We will destroy Yamaha!) – Honda
“A computer on every desk in every home.” – Microsoft
“Become the Harvard of the west” – Stanford University
“Become a $125 billion company by year 2000.” – Wal-Mart, 1990
If you struggle to do this visualization, then try the following. In your wildest dreams, what would you like to accomplish? Remove the handbrake, think out of the box, think about what if we could pull off the impossible. What could be the ultimate picture of success?
Afterward, describe what the company will look like when it’s operating at the level that achieves that success. What benefit does it have for your customers, employees, shareholders and yourself?
Paint this mental illustration for yourself and your team.
This exercise won’t be knocked off in an hour, it is an evolution. Give it time to develop.
Once you feel that you have some alignment around the vision, you can then gather around, discuss and brainstorm your visionary B H A G.
What is the single compelling, measurable and clear goal that will be reached when that vision becomes a reality?
This will be the best time to list potential ideas. A few ideas may even be combined into one measure of success. Which of these ideas on the list seem to most convey the feeling and spirit of the vision? Narrow it down to two or three potential B H A G’s.
It is crucial at this point to take a step back and ensure all of these potential Big Hairy Audacious Goal’s are aligned: that they are aiming towards the same future.
This process is also a great way of knowing if your executive team shares the same vision. Of course, it may take more effort and time to get into an agreement on how to best state it and measure it, but being on the same page at this stage is critical.
Once you have narrowed your B H A G to a few options and made sure your team is seeing the same future, you can challenge those ideas against these Questions. The criteria for confirming whether or not you have a great Big Hairy Audacious Goal is that you can answer YES! to all of these questions.
And, keep in mind that this is a process, not an event. Well crafted Big Hairy Audacious Goal’s are the result of an extensive, interactive process. Establish your own THINK rhythm to work on your SOI and B H A G.
Part 3: FIRE!
Start the engine and drive
Your B H A G is your rally cry, it’s more than just a poster on the wall. Everyone in your business should know what it is and know exactly how their jobs contribute to reaching this goal.
It is through this understanding that your team are able to connect daily execution to long-term strategy.
As Jim Collins said, “Strategy is as much about saying No as it is about saying Yes.” You must embrace this wisdom and have a framework to run decisions through that will allow you to be confident about when to say YES and when to say NO.
Here is a helpful decision matrix that will assist you with your Yes or No options:
Let your B H A G be the guiding force when you set your daily or weekly tool-belt meetings, 90-day, and annual plans. Every year, each milestone, and all key initiative should have a direct correlation to your Big Hairy Audacious Goal. In addition, keep your team aligned by ensuring that individual performance reviews and coaching is centered around the long-term strategic vision of your business, your Big Hairy Audacious Goal.
Once all has been said and done, and you have the right B H A G for your business, you now get to reap the benefits of having your strategic direction set.
Profitably growing your business with a singular focus and purpose is the most efficient way to achieve this, and it is your B H A G that is the guiding light just as a lighthouse helps navigate a ship. Embrace your B H A G with passion, let it become infectious, you will be amazed by the collective power of emotion from you and your team. Your Big Hairy Audacious Goal is the vehicle to achieve this.
Remember: only your continuous attention during the planning and your relentless focus can turn your BHAG into reality! Your team, seeing you work with them to achieve a collective Big Hairy Audacious Goal will encourage them to bring their “A” game to work, they will innovate, pursue and contribute to the collective success. Everyone gets challenged to ask and answer the question: “How can I/we…?”
If you’re having trouble defining your Big Hairy Audacious Goal, then let Sean give you a hand.