Collins and Porras introduced this wonderful concept in their extremely successful book Built to Last (1994) in which they presented their research on habits of visionary companies.
A Big Hairy Audacious Goal – or BHAG for short – is a huge and daunting long-term challenge you set yourself as a company. Its function is to stimulate progress. A BHAG is clear and compelling and has a clear finish line. In other words, it defines the destiny of the company in broad but clear terms.
For example, GE had the following BHAG:
Become #1 or #2 in every market we serve and revolutionize this company to have the speed and agility of a small enterprise.
Henry Ford in 1907 had the following:
To build a motorcar for the great multitude … It will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God’s great open spaces… everybody will be able to afford one, and everyone will have one. The horse will have disappeared from our highways, the automobile will be taken for granted.
So why are BHAG’s important? It gives focus and makes explicit where your business wants to go. This is especially important if you have employees or work with outside partners. You want your employees or partners to contribute to reaching your goal and they cannot do so if they do not know what it is you are aiming for.
It could be that (future) employees or partners do not subscribe to your goals. Because they conflict with their beliefs, or because they realize that they do not have the skills to help you reach them. This is totally fine because in this way this BHAG act as a self-selecting criterion.
Another reason is that a BHAG can be a source of inspiration.
A BHAG can be very powerful that way.
How to define your BHAG?
Formulating your BHAG is not a matter of stating something eloquently; being clear and compelling is key. It is a goal, not a statement. People have to get it right away. A BHAG should fall well outside the comfort zone. You have to believe you can pull it off, but accomplishing your BHAG would be nothing short of heroic. Lastly, your BHAG has to run parallel to your values and beliefs. For instance, if your BHAG would be all about being green and eco-friendly, but, in reality, you do not care about the environment, it is not a good BHAG for your business. It would be unbelievable, but also hard to reach as it doesn’t come naturally to you.
Coming up with a BHAG is not rocket science. You probably have your big dream in the back of your head already. You just have to write it down and share it.
- Define your timeframe. The literature says that you would have to take a minimum of 10 years, but if you are starting a business at 50, you may want to take a shorter period of time. Just do not make it too short, because if it can be accomplished in 1 year, it is probably not outside your comfort zone.
- Sit back, put your feet up on your desk, or do whatever you need to do to put yourself in BHAG dream mode and write down your BHAG. If you have written down that your BHAG is retiring at 55 and travelling the world, then that is a good BHAG for you as a person, but not for your business. Describe what you want to accomplish with your business just before that moment when you sell, retire, and spend the rest of your life traveling from tropical island to tropical island.
- Share your BHAG with those people that are critical in helping you reach your goal.
Translating your BHAG
Of course, you can define a 5 or 10 year BHAG, but then you can break it down into steps and define your BHAG for the year to come (even if we are a month into the year already). Have you defined your BHAG for 2016?