What is a BHAG - Big Hairy Audacious Goal?
This article delves into the concept of BHAG, or Big Hairy Audacious Goal, a term coined by Jim Collins and Jerry Porras. It discusses the importance of setting a BHAG for your organization and how it can serve as a long-term vision that pushes the company to achieve greatness. The article also offers tips on creating a compelling BHAG and examples from well-known companies like Starbucks and Amazon. It's a comprehensive guide for anyone looking to set up a BHAG for their business.
A visionary BHAG is a 10-25 year compelling goal that stretches your company to achieve greatness. It should be a huge, daunting task, like climbing Mount Everest, which at first glance, no one in the company knows how on earth you will achieve. Jim Collins and Jerry Porras first coined the term BHAG (Big Hairy Audacious Goal, pronounced BEE-hag) in their 1994 book Built to Last: Successful Habits of Visionary Companies, and it has inspired thousands of successful companies since then to create and use this goal type.
It should have what we call a “gulp factor,”... meaning that when people hear it for the first time, they must swallow hard to take it all in. But there is magic in the gulp factor, magic in the unknown. A great BHAG will cause your team to stretch beyond the obvious and beyond the status quo. Just like stretching a rubber band creates energy, stretching your team also creates energy. Committing to a goal that you don’t know how you will achieve creates an environment of innovation. Necessity, after all, is the mother of invention. In addition to energy and innovation, a great BHAG will also provide inspiration. It gives people a vision of what the future might look like if everyone pulls together and gives their individual best to the collective effort. Combine your BHAG with a noble Core Purpose. Your people will embark on a crusade to achieve greatness.
There are 3 parts to provide you with insight as you set out to create, revise, or launch your BHAG. If you're looking for inspiration, you can see our blog post that outlines several classic BHAG examples that you can help
Comprehensive BHAG Guide
Discover The Hedgehog That Drives Your BHAG
Your BHAG will serve as a guide for your organization as you move into the future. Therefore, it is important that it be grounded in and reinforce the fundamentals of your business. That means you must understand your Hedgehog Concept. The term Hedgehog comes from the famous essay by Isaiah Berlin titled “The Hedgehog and the Fox.” The story contrasts the fox as a cunning animal who knows many things, always seeing the world in all its complexity, with the hedgehog, who knows one big thing well and simplifies a complex world through a single organizing idea.
Regarding business, "fox" companies recognize and pursue every opportunity, seeing the world in all its complexity. They work to be good at many different things to take advantage of opportunities as they are presented. They become scattered and diffused, never becoming great at any one thing. Hedgehog companies, conversely, are laser-focused, understanding and concentrating on what they are best at. They can simplify a complex world into a single organizing idea, always considering first whether or not an opportunity fits into their pattern of success.
Three Fundamental Hedgehog Concept Questions
What can you be the best in the world at? The question is not “What are you best at?” but what can you be best at? Consider what would happen if you focused your energy and effort on one main thing. What could you become the best in the world at? It’s vital that you be honest as you answer this question. It is not that you are setting a goal to become best at something; it is that you understand with certainty what you can become best at. And it is equally crucial that you know what you can NOT become best at.
What drives your economic engine? This is much more of a strategic decision than a matter of metrics. It requires you to understand what causes you to make money more than any other ratio or denominator in your business. Thinking beyond the obvious metrics of your industry can lead to fundamental breakthroughs in innovation, setting you apart from your competition and possibly disrupting the status quo. In his book Good to Great, Jim Collins asks, “If you could pick one and only one ratio - profit per X - to systematically increase over time, what X would have the greatest and most sustainable impact on your economic engine?”
What are you deeply passionate about? For a company to be great, the people in the organization must be fully committed and engaged in their work. This requires engaging their hearts along with their heads. Understanding the purpose of your work and the passion of your people and being intentional about pursuing opportunities that align with that purpose and passion is an essential piece of understanding your Hedgehog Concept. The idea is not to work to get people passionate about what they are doing; it is to make a strategic decision to do the work that naturally inspires passion in your people.
The intersection of the answers to these three questions develops your BHAG Hedgehog Concept. It is the work that inspires your team, that you have the potential to do better than anyone else, and that you can make money doing. Your company's Hedgehog Concept is understanding what that looks like and boiling it down to a single organizing idea that you can use as a filter for simplifying a complex world. We also have a handy blog article about having the proper discussions to get to your BHAG.
BHAG Examples - Creating a Great BHAG
Now that you have a clear and intentional understanding of the fundamentals of your business, your Hedgehog Concept, you are ready to begin working on your BHAG. A great BHAG will be easy to understand, will serve as a focal point for unifying team effort, and should guide decisions daily. With this in mind, you certainly want to set a goal that is aligned with your company’s “Passion,” “Best At” and “Profit per X.” Your BHAG should be clear, compelling, engaging, inspiring, and measurable. Remember that the purpose of setting this visionary BHAG is to paint a picture of a successful future, so your BHAG must also be descriptive.
Here are some classic BHAG examples:
Become the most recognized & respected consumer brand in the world (Starbucks)
Every book, ever printed, in any language, all available in less than 60 seconds (Amazon)
A computer on every desk in every home (Microsoft)
Land a man on the moon and return him safely to earth (1960's America)
Start by first talking about the vision for the company. In your wildest dreams, what would you like to accomplish? What is the ultimate picture of success? Now describe what the company will look like when it is operating at a level that achieves that success. What is the benefit for your customers, your employees, and your shareholders? Paint the mental picture for yourself and your team.
Once you are all aligned around the vision, you can start discussing and brainstorming your visionary BHAG. What is one clear, compelling, and measurable goal that will be reached when the vision becomes a reality? Make a list of potential ideas. You may even be able to combine a few ideas into one measure of success. Which of these ideas seem to convey the feeling and spirit of the vision? Narrow your list down to two or three potential BHAGs.
It is important at this point to stop and make sure that all of the potential BHAGs remaining on your list are aligned... that they are painting a picture of the same future. This is a simple test to ensure that, first and foremost, the executive team shares the same vision. It may still take more time and effort to agree on how best to state it or measure it, but alignment at this stage is very important.
Once you have this alignment and have narrowed your BHAG ideas down to just a few, you can test those ideas against the following questions with our BHAG template.
The criteria for determining whether or not you have a great BHAG is that you can answer “Yes” to all of these questions:
BHAG Test Questions (from Jim Collins Vision Framework, JimCollins.com):
- Do you find this BHAG exciting?
- Is the BHAG clear, compelling, and easy to grasp?
- Does this BHAG somehow connect to the core purpose?
- Will this BHAG be exciting to a broad base of people in the organization, not just those with executive responsibility?
It is undeniably a Big Hairy Audacious Goal, not a verbose, hard-to-understand, convoluted, impossible-to-remember mission or vision "Statement"? In other words, does it pass the "Mount Everest Standard"?
Do you believe the organization has less than a 100% chance of achieving the BHAG (50% to 70% chance is ideal) yet simultaneously believe the organization can achieve the BHAG if fully committed?
Will achieving the BHAG require a quantum step in the capabilities and characteristics of the organization?
In 10-25 years, can you tell if you have achieved the BHAG?
Remember, it's a process, not an event. The best BHAGs are usually the result of an iterative process. Establish a THINK Rhythm to work on your Hedgehog Concept and your BHAG.
Big Hairy Audacious Goal Meaning
A Big Hairy Audacious Goal, or BHAG, is a term coined by management experts Jim Collins and Jerry Porras in their book "Built to Last." BHAGs are bold, challenging, and inspiring long-term goals for an organization that requires significant effort, teamwork, and commitment. They are designed to stretch an organization and its employees beyond their current capabilities and limitations. BHAGs can be a powerful tool for aligning team members toward a common purpose and igniting passion in pursuing a meaningful, audacious objective. Suppose you're interested in setting a BHAG for your organization. In that case, you can start by brainstorming aspirational, bold, and compelling ideas and then work to break the goal down into manageable achievable steps over time.
Your BHAG must be more than a poster on the wall. It should be a rallying cry! Everyone in the company should know what it is and understand exactly how their day jobs contribute to one day achieving this goal. Through this understanding, people in the company can connect everyday execution to long-term strategy.
Jim Collins says, “Strategy is as much about saying NO as it is about saying Yes.” To apply this wisdom, we must have a framework to run decisions through that will allow us to be confident when we say yes and when we say no. Using the Hedgehog Concept and BHAG, your framework for “Yes/No” decisions should look like this:
Four BHAG Example Questions
- Do we even care about this opportunity? Is it aligned with our Passion?
- Are we any good at it? Is it aligned with our Best At?
- Can we make money doing it? Is it aligned with our Profit/X?
- Does it move us closer to achieving our BHAG?
Using these four questions to evaluate opportunities will help you to say "Yes" to the right decisions and "No" to the rest.
Allow your BHAG to be a driving influence in setting your 3-5-year strategic plans and yearly plans. Every year, every milestone and every key initiative should directly correlate to your BHAG to ensure that you can reach your goal and keep your team aligned around its long-term strategic vision. When creating your execution-ready quarterly plan for your 13-week race, you must devote enough energy to keep progressing toward your goal.
Your continuous attention during planning and relentless focus every day throughout the organization on striving to achieve your BHAG will enable innovation and success in a way that would not otherwise be possible. It will drive creativity and breakthrough thinking throughout the organization as everyone in the company is challenged to ask and answer the question, “How can we...?”
Is Your BHAG Truly Audacious? Understanding the "Gulp Factor"
When setting a Big Hairy Audacious Goal (BHAG), businesses often overlook a critical element: the "gulp factor." This is the moment of hesitation, the slight catch in your breath, when you consider the sheer magnitude of your goal. A true BHAG should instill this feeling. It's not just about setting a lofty target; it's about pushing your organization to its limits. To ensure your BHAG is genuinely audacious, consider these key points:
- Risk Assessment: Evaluate the risks involved. If there's no risk, there's no "gulp."
- Stretch the Comfort Zone: Your BHAG should take you well beyond your current capabilities.
- Market Disruption: Aim for a goal that disrupts or transforms the market, not just your business.
- Timeframe: Set a long-term timeline to achieve something monumental, typically 10 to 30 years.
- Alignment: Ensure that your BHAG aligns with your core values and long-term vision.
By incorporating these elements, you'll set a BHAG that's not just big and hairy, but truly audacious.
BHAG and Business Alignment: The Risks of Misalignment
Setting a Big Hairy Audacious Goal (BHAG) is a bold move, but you're setting up for failure if it's not aligned with your business fundamentals. Here's what you risk when that alignment is off:
- Resource Drain: A misaligned BHAG can divert critical resources away from key business operations.
- Strategic Confusion: Team members may struggle to reconcile daily tasks with a BHAG that doesn't fit the company's core mission.
- Financial Instability: Pursuing a BHAG that's not financially viable can lead to budget overruns and even bankruptcy.
- Reputation Damage: Failure to achieve a publicized BHAG can harm your brand and erode stakeholder trust.
- Employee Morale: A misaligned BHAG can lead to employee disengagement, as the goal may seem irrelevant or unattainable.
To avoid these pitfalls, ensure your BHAG is audacious and deeply rooted in your business fundamentals. This alignment is crucial for long-term success.