BHAG, Pronounced bee hag, is one of the most important and revolutionary business concepts from the late 20th century, inspiring thousands of companies to push themselves outside of their comfort zones in order to achieve greatness.
First coined by Jim Collins and Jerry Porras in their 1994 book, Built to Last: Successful Habits of Visionary Companies, a BHAG, or Big, Hairy Audacious Goal, is a long term goal which challenges your company to carry out the unattainable. It is the Everest of business.
But it is more than just about achieving a goal.
Understanding a BHAG
A BHAG needs to represent a clear purpose and vision for the direction of your company over the next 10 to 30 years. It becomes the road map of company culture, dictates who you hire and influences what boardroom decisions you make. Everything relates back to the question of “Is this getting us closer to achieving our BHAG?”
Was it a Big Hairy Audacious Goal for NASA to photograph a black hole? It's something that has eluded the best astronomers and researchers for decades. Yet, working with researchers from all around the world and compiling enough astronomical data to fill a half ton of hard drives, the Event Horizon Telescope team achieved the impossible and showed the world the first image of a black hole on April 10th, 2019.
The achievement of a BHAG is supposed to be a game changer in an industry, like NASA's first image of a black hole. It has presented scientists with so much data that they expect years of further discoveries! According to Collins and Porras, achieving your BHAG requires not only commitment and dedication, but also a certain amount of arrogance to ensure your company stays on track.
Why they are important for businesses
Not to discount shorter term, SMART goals, but BHAGs are a great tool to keep businesses from pigeonholing themselves, allowing teams to think outside the box, think big and most importantly, think visionary.
If your BHAG isn’t daunting or audacious enough, then you need to go back to the drawing board. The point is that at the outset, everyone should think there’s no way they’ll ever achieve it.
Yet it instils a sense of corporate urgency. Even though it may not come to fruition until 25 years down the track, it will navigate the company forward.
A BHAG is not just an aspirational statement you put up on a wall. It’s the vision of what your business could be best in the world at, and how you believe you will get there.
When President John F. Kennedy stood before Congress on May 25, 1961, and proposed that the US "should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth." He had put forward one of the most iconic BHAG's in history.
Months later, on in September of 1962, JFK announced this once again before a crowd of 40,000 people at Rice University. His proposition inspired not only NASA, but the greater population of the USA to culturally band together and support the space program’s progress.
Just over eight years after his speech to Congress, on July 20, 1969, NASA's Apollo 11 mission would land the first humans on the moon.
John F. Kennedy
12th September, 1962
“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.”
How to create a BHAG
1) Conceptualise it
BHAGs aren't born in a day. The first step requires thinking about a goal to work towards that will change the very nature of your business. Use your imagination and let go of any practicalities holding you back.
2) Test it out
With your BHAG in mind, it’s time to see if it will stand up. Ask yourself these questions:
- Can I measure it?
- Will it expand our company’s capabilities?
- Will it take us out of our comfort zone?
3) Assign a timeline
Is your goal at least 10 years down the track? Great, now how are you going to get there.
3) Get your team onboard
Start by sharing your vision with your team, open the floor for discussions and get everyone excited about the BHAG. This will help unite everyone under one purpose.
4) Set milestones
Just like any goal, business or personal, you’ll need to pull up your boots and really commit to a BHAG. This means not backing down at the beginning of what is no doubt a daunting mountain to climb.
The benefit of a long term goal is you can approach is methodically. To help get you started, break down your BHAG into small, measurable chunks and milestones. Make these KPIs part of your monthly reporting or check-in sessions to ensure your business is always progressing.
5) Let it become a part of your vernacular
Use your BHAG to help say yes or no to opportunities. Constantly ask yourself whether this will bring you closer or further away from achieving your goal.
Different types of BHAGs
There are four main types of BHAGs which vary depending on the industry.
1) “I’m going to climb Everest” - Target-Oriented BHAG
This is the most common type of BHAG as it has one overarching goal which can be broken down into either qualitative or quantitative, measurable targets - the building blocks - which will help you climb your way to achievement.
2) “I’m going to climb Everest better and faster than this person” - Competitive BHAG
Collins and Porras refer to this as “Common Enemy” BHAGs. This Big Hairy Audacious Goal aims to unite your team in order to beat an industry leader by adopting a David VS Goliath mentality. It can be very motivating for teams, especially in niche industries, to know that the underdog is taking on the big leagues, especially when the owners of the underdog business truly believe they can win.
3) “I’m going to climb Everest just like Edmund Hillary” - Role Model BHAG
This is a great type of BHAG for start-ups or younger business aspiring towards great companies in their industry. Rather than viewing them as competitors, view their policies and practices as benchmarks for achievement.
4) “I’m going to get really fit so I can climb Everest” - Internal Transformation BHAG
This last type of BHAG is generally reserved for large companies such as Apple or Facebook. It’s main component is to create change internally in order for the company to redefine itself. Think Yahoo before the security breach when they brought on CEO Marissa Mayer.
Big Hairy Audacious Goals are supposed to be intimidating. They’re what help push innovation and ensure your team is continuously working towards a common goal. BHAGs should infiltrate your company culture and practices. They should feel as intimidating as trying to put a man on the moon for the first time, or photographing the intangible.
If you’re still figuring out your BHAG or want help on how to best achieve it, get in touch with one of our experts. We can assist in everything from strategic planning to exiting when the time is right.
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