BHAG is an acronym made up by Jim Collins and Jerry Porras, authors of the bestseller “Built to Last.” It has become a popular and useful tool in corporate and personal strategic planning.
BHAG simply stands for ‘big hairy audacious goal.’ It’s a goal that’s out of reach at present, but possible if everyone believes in it and puts in the effort too see it become reality.
What is a BHAG?
A BHAG is a long-term goal, usually 10 to 20 years out or even more.
In the late 1950s Americans looked into the sky and saw a satellite orbiting the earth. The satellite’s name was “Sputnik” and it was launched by the Soviets. This brought on a great deal of fear and concern; concern that the Soviets were winning the space race.
So, early in President John F. Kennedy’s administration, he announced that Americans would put a man on the moon by the end of the decade. People were flabbergasted. The goal seemed impossible. It’s something that had never been considered in the history of planet earth. And yet… what if it could be accomplished?
Once the initial shock was over, scientists, manufacturers, politicians, and others joined forces to see what it would take for America to reach this goal.
Sure enough, in July 20, 1969, Neil Armstrong was the first human being to actually walk on the moon. America had achieved its BHAG.
However:
No one knew exactly how to achieve it.
Many believed it couldn’t be done.
The BHAG rallied and inspired the whole country to work together toward a goal bigger than any one person.
All BHAGS have these elements in common.
Elements of a good BHAG
Here’s how to know if your BHAG is on the right track:
- It paints a picture of the future which produces passion
Nothing great is achieved without passion. Passion doesn’t come until there’s enthusiasm. And enthusiasm is sparked by an exciting vision of the future. If you have the right BHAG, it will generate immediate excitement in the room. Everyone will be able to visualize what life would look like if it could be achieved. - It rallies the whole organization
A good BHAG excites everyone, not just the executive team. In order to achieve a BHAG, everyone needs to be involved, so it needs to appeal to everyone. - It brings out the organization’s fighting spirit and desire to win
If you’re going to win, you’re going to have to fight for it, and your people are going to have to get fired up about it. A good BHAG makes this happen at every level in the organization. - It forces you to make choices today if you’re going to achieve it.
As the saying goes, good is the enemy of great. If you’re going to achieve your BHAG, you’re going to have to let go of things today that don’t help you get there. - Once you examine your business priorities in light of the BHAG, you will have to jettison initiatives that don’t matter in the bigger picture. It forces you to focus your efforts on what really counts. It’s far enough away that it’s hard to argue about. You’re not going to be there for ten or more years. So, stop arguing and get going!
Examples of business BHAGs
Here are two famous examples of business BHAG.
1. Microsoft
When Microsoft was founded, Bill Gates had a vision. A BHAG (although he didn’t use that term). It was to ‘put a computer on every desk.’ This was an outrageous vision at that time. Decades ago, computers were a rarity. They were owned by governments and universities. They took up a lot of space and required large amounts of maintenance. Like JFK and the moon,
- No one knew how to get there
- Many believed it couldn’t be done
- It inspired the whole company to achieve a goal that was bigger than any one person
2. Starbucks
Starbucks founder Howard Shultz worked hard to come up with a BHAG. Finally, he decided to set a BHAG to become the #1 consumer brand in the world. This meant that Starbucks had to give up ideas that they held dear up to that point. They dropped “Starbucks Coffee” from their logo. They made their coffee available on planes and in Costco and other stores. And they tested new markets such as high-end wines and cheeses, smoothies and other coffee store concepts. Whether they will achieve their BHAG or not remains to be seen, but they’re working on it.
Four types of BHAGS
- Target oriented – A good example of this type of BHAG comes from Heinz. Theirs is: “To be the world’s premier food company offering nutritious, superior tasting foods to people everywhere.”
- Competitive – Nike famously adopted the BHAG to ‘Crush Adidas!” They are a sports company after all. It makes sense that they would choose a very competitive, very motivating BHAG. You can read more about Nike’s BHAG in “Shoe Dog” by Phil Knight, founder and chairman of Nike here
- Role model – A good role model BHAG example is from Watkins-Johnson. Their BHAG was “To become as respected in 20 years as Hewlett-Packard is today.” They chose a company they admired and worked to become like them. Good idea.
- Internal Transformation – This is a category for large, well established companies to look at. Their BHAG often needs to look inward, not outward. Here’s a good example from Merck in the 1930s: “Transform this company from a chemical manufacturer into one of the preeminent drug-making companies in the world.” And they achieved their goal.
- Mixed BHAG – You may want to try mixing these categories to create your own, as Amazon has done. Here’s theirs: “To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might way to buy online.” This is a mixture of a target-oriented BHAG and an internal transformation BHAG.
In Summary
- A BHAG is an acronym for a ‘big hairy audacious goal.”
- A good BHAG:
- Paints a picture of the organization which produces passion
- Rallies the whole organization
- Brings out everyone’s fighting spirit and desire to win
- Forces you to make choices today if you’re going to achieve it.
- There are four types of BHAGs to choose from:
- Target oriented BHAGs
- Competitive BHAGs
- Role model BHAGs
- Internal Transformation BHAGs
- Mixed BHAGs
Even if you don’t reach your BHAG, it will transform your organization, because it will force everyone to dig deep and push to achieve something… big!
