Imagine standing at the helm of a company, your gaze cast over an ocean of relentless competition and rapid innovation. You're seeking a game-changing strategy that enables your company to stay afloat and navigate confidently toward untapped horizons.
You need more than just a business plan, you need a grand vision — a BHAG.
What’s a BHAG?
Pronounced “bee-hag,” Jim Collins and Jerry Porras coined this term in their seminal work, “Built to Last: Successful Habits of Visionary Companies." The term stands for “Big Hairy Audacious Goal.” These aren’t your everyday targets. Instead, they’re long-term, moon-shot objectives designed to push your team to unexpected heights.
Like the diverse companies that adopt them, BHAG goals come in various shapes and sizes. Here are four common types:
1. Role model
A role model BHAG is a powerful vision that projects a company's ambition to mirror or surpass the achievements of a benchmark entity, often from a different industry. The chosen role model usually exemplifies success, influence, and attributes that align with the aspiring company's purpose, mission, and vision.
This type of BHAG is particularly relevant for companies operating in sectors where benchmarks are unclear or disruption has opened up new opportunities. A local food delivery startup might set a BHAG to become "The McDonalds of Food Delivery." Here, McDonalds' revolutionary business model and global success serve as the yardstick against which the startup aspires to measure its progress.
This form of BHAG leverages the role model's proven success as a blueprint while aiming to adapt and surpass it in their context. It effectively harnesses the power of emulation while nurturing a vision of distinctive greatness.
2. Common enemy
The common enemy BHAG provides a competitive focus, rallying a company against a particular rival. This goal type leverages healthy competition, asking teams to outperform or dethrone a specific competitor.
A classic example was the Cola Wars of the 1980s, where PepsiCo set a BHAG to "Beat Coke." This BHAG defined the company's strategy and united its workforce in a common cause, contributing to a competitive dynamic that spurred innovations and expansions in the soft drink industry.
The common enemy BHAG can galvanize a company's spirit, fostering a sense of camaraderie and purpose to tackle a lack of motivation. But competition must remain healthy, centered on improving products, services, or market share, rather than resorting to negative tactics.
3. Targeting
Target-based BHAGs are clear, quantifiable, and set around specific company objectives. These are usually externally focused, concerning market presence, customer reach, or product innovation. Target-based goal-setting is incredibly important as it provides a definite endpoint and a direct way to measure progress.
Sixty years ago, JFK and NASA presented a quintessential example of a target-based BHAG by launching America’s space race with the objective of "landing a man on the moon." While the goal appeared broad on its face, requiring significant advancements in various scientific and engineering fields, it was also measurable, with the completion marked by the physical act of a man setting foot on the lunar surface.
Setting a target-based BHAG necessitates a keen understanding of the industry, robust mechanisms to track progress, and the flexibility to adjust strategies as the circumstances evolve. But that shouldn’t make it any less audacious.
4. Internal transformation
This form of BHAG shifts focus inward, spotlighting the need for significant change within the company. Creating these means you seek to redefine how the company operates, improve inefficiencies, or enhance employee engagement.
A manufacturing company might set a BHAG to "Become the industry's safest company with zero incidents by 2030." This reiterates the company's commitment to its workforce and drives significant improvements in operational practices, safety training, and organizational culture.
An internal transformation BHAG usually requires structural and policy changes as well as sustained efforts to bring about significant, enduring change. But it's a powerful way to align the entire organization toward shared improvement, fostering team pride and cohesion and increasing employee engagement as they contribute to a greater cause.
The importance of BHAGs for your business
Setting a BHAG is a strategic move that provides many benefits for a company, like illuminating a clear and compelling future or fostering a sense of urgency that ignites your entire organization.
A BHAG business goes beyond the confines of conventional short-term planning. It's a commitment to a journey, moving your company out of its comfort zone and into the realms of extraordinary achievement. Research even suggests that there’s a direct correlation between setting goals and achieving success.
But don’t take setting BHAGs lightly. These must be realistic goals with achievable milestones that align with your company's mission, core values, and long-term strategy. A good BHAG promotes progress and innovation while offering a concrete, measurable metric for success.
As such, formulate these with due consideration of potential challenges and the strategies required to overcome them.
4 tips for creating BHAGs
Crafting BHAGs with your team is an exciting venture that necessitates introspection, aspiration, and strategic thought around how to achieve long-term goals. To guide you through this process and ensure your BHAGs are SMART — specific, measurable, achievable, relevant, and timely — consider these four crucial tips.
1. Ensure alignment
Crafting BHAGs begins with introspection. They should resonate deeply with your company's identity, mission, and core values. Essentially, they embody the company's reason for existence and its grandest aspirations.
If your organization prioritizes sustainable practices, a BHAG might revolve around a major environmental impact, like achieving complete carbon neutrality. By doing so, your BHAG becomes more than just a distant target — it’s a constant, palpable expression of what your company stands for.
2. Understand its long-term nature
Setting a BHAG is a declaration of long-term commitment. BHAGs typically span upwards of 10 years, expressing a future that may be several business cycles away. With such a long time horizon, these objectives put short-term goals into context by keeping the overall mission in focus. This journey-oriented approach requires ambition, patience, and resilience.
When Starbucks established its BHAG — “To turn Starbucks into the most recognized and respected consumer brand in the world” — it was committing to an aspiration that extended far beyond immediate possibilities.
Starbucks had to innovate consistently in its menu and customer experience, withstand economic volatility, and adapt to evolving consumer preferences and market trends. Understanding the long-term nature of a BHAG will guide you in managing expectations to prepare for a marathon rather than a sprint.
3. Make it measurable
A great BHAG isn’t just a vision — it's a measurable target. It should offer a specific, quantifiable objective that serves as a sign of progress. This allows your company to assess where it stands, how far it has come, and what lies ahead.
If your company's BHAG is “To become the market leader in green technology by 2040,” this implies a measurable goal in terms of market share and sales volume. Making your BHAG measurable ensures it’s a strategic commitment your team can pursue, track, and achieve.
4. Make it inspirational
Perhaps most importantly, BHAGs should inspire your team. They’re lofty ambitions meant to stir excitement, passion, and a sense of purpose among employees to boost employee morale. An inspiring and audacious goal transcends the mundane and propels everyone toward a shared, meaningful aspiration.
Uber has a BHAG that's as inspiring as it is audacious: “to make transportation as reliable as running water everywhere, for everyone.” This goal not only outlines a measurable target but also ignites a collective passion to reshape the future of transportation.
4 BHAG examples
Several successful companies have set and achieved audacious BHAGs, demonstrating the transformative potential of these objectives. To see firsthand some of the best ways to set team goals, here are four exceptional BHAG goal examples from four exceptional companies.
1. Google
Google’s initial BHAG was to "Organize the world’s information and make it universally accessible and useful." This ambitious goal, set in the early days of the internet when information was scattered and difficult to access, set the direction for the company's strategic planning.
It drove Google to develop various now-ubiquitous services, such as Google Search, Gmail, and Google Docs. More than two decades later, this BHAG continues to fuel innovation at Google, pushing the company to continually improve its services and extend its reach.
2. Microsoft
In the late 1970s and early 1980s, when computers were large, expensive machines found only in academic and corporate settings, Microsoft set a BHAG to have a “computer on every desk and in every home." This audacious goal challenged the status quo, imagining a world where personal computing was the norm.
It spurred the development of Microsoft's range of software, most notably its Windows operating system and Office suite, which transformed personal and professional productivity. Today, Microsoft has largely realized its BHAG, with personal computers a staple in homes and offices worldwide.
3. Nike
In the 1960s and '70s, Nike was a fledgling sports brand looking to carve out a space in a market dominated by established players like Adidas. It set a BHAG to "Crush Adidas." This bold goal drove the company to innovate, expand product lines, and invest in powerful marketing campaigns.
And this hard work led to the creation of iconic products, collaborations with sports legends, and memorable advertisements. Over the years, Nike accomplished its BHAG and went on to become a global leader in sports apparel and equipment, known for its innovation, style, and influence in sports culture.
4. Netflix
After reinventing the media landscape with streaming, Netflix set an audacious goal to entertain the world. Determined to revolutionize the streaming industry, the company aims to cater to a diverse global audience, regardless of geographical location.
With its expansive reach across more than 190 countries and content in over 30 languages, Netflix is steadfast in its mission to redefine entertainment, creating a universal platform that transcends linguistic and geographic boundaries as the go-to platform for streamable stories.
Embracing your BHAGs
Embarking on a BHAG-focused journey is like launching a mission to the moon. It's a path lined with challenges and uncertainties, but it's also one paved with opportunities for innovation, growth, and unparalleled success.
BHAGs aren’t just about setting lofty goals — they’re about aspiring to make a significant impact. Use these goals to push your team’s boundaries, not settling for good when you can aim for great.
It's time to dream audaciously, work diligently, and strive to leave a lasting legacy.
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