What is a BHAG and are you more likely to succeed if you have one?

According to a study by Bain & Company, companies with clear, ambitious goals are 1.6 times more likely to outperform their peers in terms of growth and profitability. Similarly, research by the Harvard Business Review found that companies setting bold, long-term goals are 2.5 times more likely to be innovation leaders in their industry.

Several renowned companies have set BHAGs that have driven their extraordinary success:

Microsoft: “A computer on every desk and in every home.” This BHAG, set by Bill Gates, was instrumental in transforming Microsoft into a household name and a leader in the tech industry.

Amazon: “To be Earth’s most customer-centric company.” Jeff Bezos’ ambitious goal has guided Amazon’s relentless focus on customer satisfaction and innovation.

Tesla: “To accelerate the world’s transition to sustainable energy.” Elon Musk’s BHAG has not only driven Tesla’s growth but also spurred advancements in the electric vehicle and renewable energy sectors.

Achieving remarkable success often requires more than just small, incremental improvements. It demands bold, visionary goals that inspire and challenge teams to reach new heights. This is where the concept of the Big Hairy Audacious Goal (BHAG) comes into play.

A BHAG, or Big Hairy Audacious Goal, is a long-term, ambitious target designed to unify and inspire an organisation. Coined by Jim Collins and Jerry Porras in their 1994 book “Built to Last: Successful Habits of Visionary Companies,” a BHAG is intended to be a clear and compelling vision that drives a company forward. Unlike typical goals, BHAGs are meant to be bold, almost audacious, pushing the boundaries of what seems possible.

BHAG vs. Mission vs. Vision

To understand the power of a BHAG, it’s crucial to distinguish it from a mission and a vision statement. A mission statement defines the core purpose of the organisation, explaining why it exists and what it aims to achieve in the present. It’s about the here and now, focusing on the immediate objectives and approach of the company.

A vision statement, on the other hand, describes what the organisation aspires to become in the future. It provides long-term direction and inspiration, painting a picture of the desired future state. The vision is forward-looking and serves as a guide for strategic planning.

A BHAG goes a step further by being exceptionally bold and specific. It’s a concrete, measurable, long-term goal that is designed to galvanise the entire organisation. While a vision provides general direction, a BHAG offers a tangible target that is ambitious and achievable, pushing the company to strive for greatness.

Do Companies Need Both a Vision and a BHAG?

One might wonder if a company needs both a vision and a BHAG, or if a BHAG is simply a modern replacement for a traditional vision statement. The answer lies in the unique roles they play.

While a vision statement provides a broad, inspirational direction, a BHAG offers a specific, challenging goal that can unify and motivate the team. Both can coexist, with the vision setting the stage and the BHAG providing the concrete objective that drives efforts and measures success.

The key differences between a vision and a BHAG are their specificity and timeframe. A vision is broad and inspirational, designed to motivate and guide, whereas a BHAG is precise and audacious, aimed at propelling the organisation towards remarkable achievements through clear and challenging objectives.

Using a private mental health care provider as an example:

Vision: “To be the leading provider of compassionate and innovative mental health care, transforming lives and promoting mental well-being for all.”

BHAG: “To reduce the incidence of untreated mental health conditions in our service areas by 50% within the next 10 years.”

The vision focuses on the company’s aspiration to be a leader in mental health care through compassion and innovation. The BHAG sets a bold and measurable target of significantly reducing untreated mental health conditions, which challenges the organisation to develop effective outreach, treatment, and support programs.

Why Having a BHAG Matters

A well-defined BHAG serves as a powerful strategic compass. It helps organisations navigate through challenges and opportunities by maintaining focus on the ultimate goal. Companies with BHAGs are often more innovative and resilient, as these goals encourage thinking beyond the status quo and drive continuous improvement.

How to Define Your BHAG

Defining a BHAG requires strategic thinking and introspection. Here’s a basic step-by-step guide:

1. Aligned: Ensure your BHAG resonates with your organisation’s mission and values. It should reflect what your company stands for and aspires to achieve in the long term.

2. Specific: A good BHAG is clear and quantifiable, allowing you to track progress and stay focused on the end goal.

3. Audacious: Your BHAG should be bold and challenging, with a realistic chance of success (50–70%). It should stretch your organisation’s capabilities and inspire everyone involved.

4. Committed: BHAGs typically span a decade or more, requiring sustained effort and resilience. This long-term perspective helps maintain focus through various business cycles.

A well-crafted BHAG can transform an organisation by providing a clear, ambitious target that inspires and challenges the entire team. As former President John F. Kennedy famously said, “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.” This spirit encapsulates the essence of BHAGs — setting goals that push the boundaries of what is possible and drive extraordinary achievements.

By defining and committing to a BHAG, your organisation can unlock new levels of motivation, innovation, and success.

published on www.jcrc.co.uk