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If you're here, you're not merely content with the run-of-the-mill goals for your team.
You're aiming for something monumental – but also thinking of the struggle to find that delicate balance between ambition and reality and the challenge of rallying your team around it.
For this, you have BHAG or Big Hairy Audacious Goals.
BHAG Goals aren't just your average objectives. They're the Everest of goal-setting – the North Star that guides organizations and individuals toward transformative success.
But how do you turn these colossal ambitions into actionable reality?
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BHAG stands for "Big Hairy Audacious Goal," a concept introduced by James Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies.
BHAG involves setting an ambitious and long-term goal that inspires the organization to take action and give their best to achieve it.
BHAGs are characterized by their ability to:
It is a goal-setting framework that is intentionally designed as bold. It may seem almost impossible to achieve, yet it's a compelling goal that helps create momentum and shared commitment among teams.
➡️ Not ready to commit to BHAGs just yet? Learn about other goal-setting frameworks in our comprehensive analysis.
After studying 18 long-lasting and visionary companies, Jim Collins and Jerry Porras introduced the term 'Big Hairy Audacious Goal' in their best-seller Built to Last: Successful Habits of Visionary Companies.
Here's a snippet from the book that explains the concept with the historic moon landing as an example:
"Most corporate statements we've seen do little to provoke forward movement (although some do help to preserve the core). The moon mission didn't need a committee to spend endless hours wordsmithing the goal into a verbose, meaningless, impossible-to-remember "mission statement." No, the goal itself—the mountain to climb—was so easy to grasp, so compelling in its own right, that it could be said one hundred different ways, yet easily understood by everyone."
Thus, when writing a Big Hairy Audacious Goal, ensure it has below five characteristics:
BHAG helps stimulate progress within your organization by inspiring employees to push their creative talents and energies to achieve an audacious goal. Its 'challenging' nature gets people's juices flowing to help your organization register wins that a mission or vision statement often fails to incite.
A good BHAG aims to stimulate the forward progress of your organization by creating a transformative vision with long-term strategic planning. This is unlike other goals that may be specific, measurable, practically relevant, and may involve a time frame.
Let us understand the difference between a BHAG and a regular goal with an example of a growing sustainability company:
Regular goal example: Increase quarterly sales of reusable wooden toothbrush category by 10%.
Characteristics:
BHAG goal: Become the global market leader in sustainable and eco-friendly consumer products within the next decade.
Characteristics:
There are four broad categories of Big Hairy Audacious Goals to choose from to build a visionary company:
Competitive BHAGs focus on outperforming competitors or the company becoming the leader in a particular field or industry.
Nike's original mission in the 1960s was to "Crush Adidas." Adidas was an international brand with huge factories that had been doing business for nearly fifty years.
Amazon, on the other hand, does not take the angle of crushing a specific competitor but to be the best on Earth:
"Amazon strives to be Earth's most customer-centric company, Earth's best employer, and Earth's safest place to work." Amazon, Who We Are.
Target-oriented BHAGs are quantifiable or measurable goals that aim to reach a specific numerical target.
With target-oriented BHAGs, a company aims to achieve an ambitious goal of attaining a number or taking the company to its next legacy level.
For example, SpaceX's goal is to reduce the cost of space travel to Mars to under $200,000 per person.
Another target-oriented BHAG shared by Elon Musk is achieving an uncrewed test landing on Mars within four years.
An example of a quantitative 'Big hairy audacious goal' is NASA's Artemis moon mission, which aims to land the first person of color and woman on the moon by 2025.
Internal transformation BHAGs focus on achieving a fundamental organizational transformation, often in response to existential threats or significant industry changes.
Two notable examples of transformational BHAGs are IBM's and GE's transformations.
IBM shifted from being a hardware-centric business model to becoming a global leader in IT consulting and services in the early 1990s.
General Electric embraced digital transformation in 2017. This helped them become a leader in field service management and IoT software platforms. Here's a statement that reflects their internal transformation BHAG:
"The company I joined 30 years ago made machines that made the world work better. We are still that company, but the world has changed, and the industrial world is increasingly powered by digital applications. We are part of this transformation, and we have a focused strategy that I believe is best for our customers and for GE." John Flannery, ex-Chairman and CEO of GE, in his LinkedIn article, Our Future is Digital.
Role model BHAGs involve emulating the success or characteristics of a well-regarded company and applying it to your own context. The role model company may or may not be a part of their industry.
Mosh, a protein-bar company, targets "Becoming the Nike of brain health":
"We aim to make a difference in the zeitgeist of how people think about brain health to help them stay cognitively sound as they age. With people living longer these days, more families are becoming increasingly multi-generational. Many are living under the same roof, taking care of one another. As my family watched my father slowly lose his mind to Alzheimer's, we want to help other families avoid the same painful experience. And we're so encouraged by the number of people ready and willing to begin their journey to a mindstyle lifestyle, including Millennials and Gen Zers." Maria Shriver, founder of MOSH, quoted by ceoblognation.
Here's a detailed comparative analysis of BHAG vs other goal-setting frameworks that will help you make the right choice:
A good BHAG is broad, overarching, and unifying. It serves as a guiding vision for the organization's long-term future. Writing OKRs helps achieve performance targets and align teams from top to bottom via a structured and measurable approach to goal-setting.
➡️ Learn to enable high-performing teams using OKR performance management.
Use BHAGs to guide aspirational and overarching visions. Simultaneously, use OKR software tools like Zavvy to strategically implement focused, measurable, and incremental goals that contribute to realizing this broader vision.
➡️ Explore the best OKR software to complement your BHAGs. We analyze some of the best solutions on the market.
Take the example of a Generative AI infrastructure company:
BHAG: Ensure Artificial General Intelligence (AGI) benefits all humanity
OKR:
SMART Goals are specific, measurable, achievable, relevant, and time-bound, thus providing a structured and practical framework for goal-setting. Unlike BHAGs that encourage thinking beyond conventional limits, SMART goals offer a realistic approach to achieving specific outcomes within defined parameters.
SMART goals are effective for short to medium-term objectives where it's essential to have clarity and precision. Meanwhile, BHAGs are ideal for innovation, breakthroughs, and establishing a broad future direction.
Take the example of an electric vehicle company:
BHAG: Accelerate the world's transition to sustainable energy by 100% replacing traditional fuel vehicles.
SMART goal: Increase the fuel efficiency of our existing hybrid car model by 20% within the next two years.
➡️ Check our extensive leadership SMART goals and employee SMART goals examples for inspiration.
KPIs are specifically defined quantitative metrics to measure business processes or aspirations. While BHAGs give the right direction and inspiration to achieve bigger-picture outcomes, KPIs give a detailed understanding of ongoing operations to monitor and optimize performance.
KPIs help track daily operations and employee performance by offering a detailed and quantifiable perspective. BHAGs are suitable for inspiring teams to stimulate progress and achieve an ambitious goal over a longer time frame.
Take the example of an eCommerce activewear brand:
BHAG: Become the #1 activewear brand with at least 45% market share.
KPI: Reduce cart abandonment rates on mobile apps to below 10%.
Align your organization's core values and vision statement to craft BHAGs with a unifying focal point. The copy should reflect the organization's identity, voice, and purpose to align employees with company goals.
Craft a compelling company narrative to convey the BHAG that outlines:
"Choosing a BHAG is only the first step. Then the real, hard and sustained work of explaining and selling it internally begins. There are only three things to remember if you want your BHAG to really take hold in the hearts and minds of your team members: communicate, communicate and, last but not least, communicate again!" Francis Dion, CEO at Strategic Thinking Systems.
It is good practice to convey BHAG via interactive channels like town hall meetings, newsletters, or media interviews for maximum impact and reach.
Align existing routines and practices with your BHAGs to reinforce their importance.
For example, incorporate elements of the BHAG into:
➡️ Get inspired by these complete employee engagement survey examples.
Employees may feel anxious and rethink their commitment when they learn about your company's BHAGs. This happens because they aren't convinced about the organization and their capability to achieve them.
To overcome this, you must instill a sense of ownership and accountability within employees.
"The best bosses balance performance and humanity, getting things done in ways that enhance rather than destroy dignity and pride." Robert I. Sutton, PhD, Good Boss, Bad Boss.
To nurture ownership, you need to encourage active involvement in the BHAG goal-setting and alignment process. Here are five ways to do that:
"Take prescriptions of greatness with a grain of salt. In particular, watch out for the common tendency to underplay the role of context and luck, and over-attribute success to things that are easily visible, controllable or flattering. Go to the substance, not the form: It's not the fact you have a BHAG (Big Hairy Audacious Goal) but whether or not it is actually a good one. And, above all, respect the trend, do everything you can to get ahead of it, and don't kid yourself that you can fight it. Even the greatest companies couldn't hold back the tide." Chris Bradley, Partner at McKinsey & Company.
Chris Bradley emphasizes aligning BHAGs with the business context and market trends.
Conduct a comprehensive market feasibility study, scenario planning, and risk assessments to anticipate challenges.
To visualize and gauge progress, set intermediate milestones. Then, monitor the effectiveness of BHAGs and create agile contingency plans for responsiveness.
🚨 Remember: It is better to course-correct and rethink goals than spend resources on BHAGs that no longer make sense.
Here's a list of 'blockbuster' BHAGs Netflix successfully achieved since its 25 years of operation:
These BHAGs have made Netflix the leading streaming platform with the highest OTT market share. One of the successful habits of visionary companies like Netflix that helped them achieve multiple BHAGs over decades is their open work culture.
"But we had one thing that Blockbuster did not: a culture that valued people over process, emphasized innovation over efficiency, and had very few controls." Reed Hastings, Co-Founder and executive chairman of Netflix, Inc., in No Rules Rules: Netflix and the Culture of Reinvention.
✍️ Key takeaway: Netflix has mastered employee engagement to instill accountability and ownership. Thus, employees give their best to Netflix's visionary goals and pivots because they know they are an active part of its legacy story.
➡️ Get a glimpse of Netflix's work culture with this case study on their employee performance review process.
The New York Times Company's shift to a subscription model, a landmark experiment in journalism strategy, was prompted by the challenges of legacy readership and declining ad revenues.
"On the one hand, I think there is some anxiety around it. On the other hand, I think the model we have chosen mitigates 90 percent of it." Martin A. Nisenholtz, ex-SVP of Digital Operations at The New York Times Company, quoted in Times's Online Pay Model Was Years in the Making.
Martin's anxiety illustrates the experience of embracing the internal transformation BHAG approach. His unwavering belief in their solution exemplifies the strategic planning and execution that companies adopting BHAGs should aim for.
NYT's execution for digital transformation was not random. They tested a pay model with TimesSelect, analyzed competitors' approaches, and examined reader behavior through over 20,000 survey responses.
Das Ergebnis?
As of November 8, 2023, The New York Times boasts a total subscriber base exceeding 10 million, including a net addition of approximately 210,000 digital-only subscribers since the second quarter of 2023.
✍️ Key takeaway: Back up your BHAGs with a comprehensive research and execution strategy. Conduct pilots of your BHAGs to assess feasibility, risks, and opportunities.
Boeing led the jet age in the 1970s with its low-cost and larger passenger capacity Boeing-747 aircraft, making flying accessible to the middle class.
Then, in 2016, Boeing announced its ongoing revenue target BHAG to triple its service revenues to $50 billion in a decade. They set up the Boeing Global Services (BGS) business unit to dominate the MRO (maintenance, repair, and operations) market and integrate 'service' as a core offering.
"We can show customers how we can get them better [operational] availability at a lower cost." Gene Cunningham, Head of Global Sales at Boeing Defense, quoted from an article by AIN online.
✍️ Key takeaway: Both BHAGs focus on making air travel accessible and affordable for their customers - aligning with their core values. They have successfully balanced their legacy, customer trust, and disruptive technology to achieve their BHAGs.
Under Bill Gates's leadership, Microsoft set forth a BHAG (Big Hairy Audacious Goal) that seemed nearly unthinkable during the early 1980s: to put "a computer on every desk and in every home, running Microsoft software."
This vision propelled Microsoft to develop user-friendly operating systems that revolutionized the computing industry. Through continuous innovation, strategic partnerships, and aggressive marketing, Microsoft played a pivotal role in making personal computers accessible and essential to daily life.
The company's relentless focus on software development and adaptability to changing market dynamics enabled this BHAG to become a reality. By the late 1990s and early 2000s, Microsoft's Windows operating system had become the backbone of personal and professional computing across the globe.
✍️ Key takeaway: Setting a visionary goal that aligns with your company's core competencies can create unprecedented market opportunities. Microsoft's BHAG not only transformed the tech industry but also established a legacy of innovation and accessibility in computing.
Tesla Inc., led by CEO Elon Musk, adopted a BHAG that transcends mere automotive manufacturing to "accelerate the world's transition to sustainable energy."
This ambitious goal drove Tesla to innovate beyond traditional electric vehicles (EVs), encompassing solar energy and energy storage solutions. Tesla's commitment to innovation is evident in its groundbreaking EVs, massive Gigafactories, and the Solar Roof project.
By challenging the auto industry's status quo, Tesla has spurred a global shift towards electric transportation, prompting traditional and new automakers to prioritize EV development. Tesla's approach includes significant investments in battery technology, autonomous driving, and renewable energy integration, demonstrating a holistic approach to sustainability.
✍️ Key takeaway: A BHAG that addresses a global challenge can position your company as an industry leader and change agent. Tesla's focus on sustainable energy has sparked the widespread adoption of EVs and highlighted the importance of sustainability in business strategy.
Cause: inconsistent communication strategy to convey BHAGs to employees and other stakeholders.
Effect: Employees' misinterpretation or limited understanding of BHAG statements may trickle down to incorrect execution at daily operational levels.
Mitigation: Invest time and resources to articulate BHAG clearly, concisely, and understandably. Repeat BHAGs across the organization as a reminder by making it a crucial part of your work culture.
💡 Contingency plan: Rewrite, regularly communicate, and clarify the BHAG to address emerging uncertainties.
Cause: Employees do not understand, believe in, or resonate with BHAGs
Effect: Misinterpreted BHAGs can diminish employee ownership and commitment, potentially leading to talented individuals leaving the organization due to losing belonging and purpose.
Mitigation: Involve employees in the goal-setting process and use good copywriting to communicate the 'Why' of the BHAGs.
💡 Contingency plan: Implement feedback mechanisms across onboarding, daily operations, and performance reviews to continually involve employees in BHAG-related initiatives.
Cause: Setting overly ambitious goals without assessing resource availability and gaps. Or treating BHAG as a side project and not allocating sufficient resources
Effect: Employees feeling strained, restricted, or demoralized on not making progress to achieve BHAGs
Mitigation: Develop a detailed plan outlining the steps, resources, and timeline required to achieve the BHAG.
💡 Contingency plan: Scale down the scope of BHAG defined to adjust with available resources.
Cause: Having no review mechanism to evaluate BHAGs based on progress versus investment, market dynamics, or organizational changes.
Effect: High risk of allocating resources to misaligned tasks or losing sight of the end goal.
Mitigation: Schedule regular reviews to evaluate BHAG's effectiveness and relevance for necessary adjustments.
💡 Contingency plan: Hire an external consultant to systematically help assess and re-align BHAGs.
Cause: Writing BHAGs based on 'aspirations' rather than properly assessing the market, available resources, and technology trends.
Effect: Your company jumps on a 'bubble' trend, missed market opportunities, and derailed focus on fire-fighting external factors.
Mitigation: Conduct thorough risk and impact assessment of BHAGs yearly or quarterly
💡 Contingency plan: Pause BHAG-related initiatives and assess the situation to either re-align BHAG or stop allocating resources to it.
➡️ Learn how to align employees with goals using employee goal-setting software.
What differentiates Big Hairy Audacious Goals from lofty aspirations to a guiding lighthouse?
An actionable strategy.
Having a realistic strategy and disciplined execution will make your BHAGs look achievable. For this, you will require goal-setting software that helps make your BHAG execution agile and aligned.
Zavvy's goal-setting software can help you foster a culture of continuous improvement by aligning your employees' individual goals to overarching BHAGs.
Break down silos as your teams collaborate, sync, and share feedback in a single place to achieve BHAGs.
How to execute BHAGs with Zavvy:
📅 Book a demo to explore Zavvy's goal-setting software.
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