BHAGs (Big Hairy Audacious Goals)
Set bold, clear, compelling goals that energize the entire organization and stimulate extraordinary progress through audacious commitment
A BHAG (pronounced bee-hag) is a Big Hairy Audacious Goal that serves as a unifying focal point of effort, often creating immense team spirit. It has a clear finish line so the organization can know when it has achieved the goal. A BHAG engages people and reaches out and grabs them in the gut. It is tangible, energizing, highly focused. People get it right away and it takes little or no explanation.
BHAGs differ from ordinary goals in their level of audacity and commitment. All companies have goals. But there is a difference between merely having a goal and becoming committed to a huge, daunting challenge like a big mountain to climb. The moon mission did not need a committee to spend endless hours wordsmithing a verbose mission statement. The goal itself was so easy to grasp, so compelling in its own right, that it could be said a hundred different ways yet easily understood by everyone.
The essential point of a BHAG is not whether it is the right goal or whether it points in the right direction. The essential point is captured in questions like: Does it stimulate forward progress? Does it create momentum? Does it get people going? Does it get people's juices flowing? Do they find it stimulating, exciting, adventurous? Are they willing to throw their creative talents and human energies into it?
Critically, a BHAG only helps an organization as long as it has not yet been achieved. Ford suffered from the 'we've arrived' syndrome after democratizing the automobile, becoming complacent and watching GM set and achieve the equally audacious goal of overcoming Ford. Organizations should think about what comes next before completing the current BHAG.
- A true BHAG is clear and compelling and serves as a unifying focal point of effort. It has a clear finish line so the organization can know when it has achieved the goal.
- BHAGs are bold, falling in the gray area where reason and prudence might say 'This is unreasonable' but the drive for progress says 'We believe we can do it nonetheless.'
- It is not just the presence of a goal that stimulates progress but also the level of commitment. A goal cannot be classified as a BHAG without a high level of commitment.
- A BHAG only helps an organization as long as it has not yet been achieved. Once achieved, it must be replaced with a new one or the organization risks complacent lethargy.
- An equally important question alongside whether a BHAG is energizing is whether it fits with the organization's core ideology.
- Assess Your Current StateDetermine whether your organization currently has a BHAG or is suffering from the 'we've arrived' syndrome. If you once had an implicit or explicit BHAG that you have attained and not replaced, that may explain organizational malaise. Look at your existing goals and mission statements and ask honestly whether they are energizing and compelling or verbose and forgettable.Pro tipCompare the compelling clarity of GE's BHAG ('Become number one or number two in every market we serve and revolutionize this company to have the speed and agility of a small enterprise') against verbose corporate vision statements that no one can remember. If your goals require explanation, they are not BHAGs.WarningDo not confuse a list of performance targets with a BHAG. Revenue goals, market share targets, and profit margins are not BHAGs unless they are embedded within a larger compelling challenge that grabs people in the gut.
- Craft the BHAGDefine a goal that is bold and audacious enough to fall in the gray area where reason says it is unreasonable but your drive for progress says you believe you can do it. The goal should have a clear finish line, be easy to grasp without lengthy explanation, and connect to your core ideology. It should make people excited, not just informed.Pro tipThink of BHAGs in categories: target BHAGs (like Philip Morris aiming to become the General Motors of tobacco), common-enemy BHAGs (like Nike in the 1960s aiming to crush Adidas), role-model BHAGs (like a small company aiming to become the Nike of its industry), or internal-transformation BHAGs (like GE's speed and agility goal).WarningA BHAG should not be a random audacious goal. It must fit with your core ideology. An equally important question alongside 'Does it stimulate progress?' is 'Does it fit with who we are and what we stand for?'
- Commit IrreversiblyMake a visible, public, and if possible irreversible commitment to the BHAG. It is not just the goal that stimulates progress but the level of commitment. Boeing's chairman responded to the suggestion that they could back out of the 747 program by stiffening and declaring that if Boeing says it will build this airplane, it will build it even if it takes the resources of the entire company. This level of commitment transformed a goal into a BHAG.Pro tipThe risks do not always come without pain. Boeing laid off eighty-six thousand people during the 747 development. Staying in the comfort zone does little to stimulate progress. But the commitment must be genuine and visible to the entire organization.WarningCommitment without core ideology alignment can be reckless. A BHAG pursued outside the context of enduring values and purpose is just a gamble. The commitment should be bold but grounded in who you are.
- Plan the Next BHAG Before Achieving the Current OneBegin thinking about the next mountain to climb before you reach the summit of the current one. The 'we've arrived' syndrome is a complacent lethargy that arises when a company achieves one BHAG and does not replace it with another. Ford achieved its goal of democratizing the automobile and then became complacent, watching GM overtake it. Have a succession of BHAGs planned to maintain momentum.Pro tipWal-Mart set successive BHAGs decade after decade: becoming the best store in Arkansas, then a billion-dollar company in four years, then doubling stores and increasing sales per square foot by sixty percent, then reaching $125 billion when the largest retailer in the world had only reached $30 billion.WarningDo not let the energy of achieving a BHAG dissipate into self-congratulation. The moment of achievement should be a launching point for the next audacious challenge.
In 1952, Boeing had virtually no presence in the commercial aircraft market and four-fifths of its business came from one military customer. Commercial airlines expressed little interest in a Boeing jet. Rival Douglas believed propeller planes would dominate. Yet Boeing committed roughly a quarter of its entire corporate net worth to develop a prototype commercial jet. The estimated cost was about three times the company's average annual after-tax profit for the prior five years.
In 1952, Sony sent its limited engineering staff in pursuit of a seemingly impossible goal: build a radio that could fit in a shirt pocket and become a pervasive product worldwide. In the early 1950s, radios depended on vacuum tubes, no company had successfully applied transistor technology to a consumer radio, and an outside adviser warned that transistors were only used for defense purposes where money was no object. Ibuka responded that this would make the business all the more interesting.
In 1961, Philip Morris was a sixth-place also-ran with less than ten percent market share in an industry dominated by R.J. Reynolds at thirty-five percent. Philip Morris set the audacious goal of becoming the General Motors of the tobacco industry, meaning the dominant worldwide player. MBA students trained in strategic planning analysis would almost unanimously advise against such a goal, saying the company lacked the right strategic assets and should stick to its niche.
Collins and Porras identified BHAGs as a powerful mechanism used more consistently by visionary companies than comparison companies in fourteen out of eighteen cases studied. The concept was inspired by examples like Boeing betting a quarter of its entire corporate net worth to build the 707 commercial jet when it had virtually no presence in the commercial market, Sony pursuing the seemingly impossible goal of a pocketable transistor radio when no company had successfully applied transistor technology to consumer products, and President Kennedy committing the nation to landing on the moon within a decade when the most optimistic scientific assessment gave fifty-fifty odds.