This article explains the concept of Big Hairy Audacious Goal (BHAG), developed by Jim Collins and Bertil Ohlin in a practical way. After reading it, you understand the core of this strategy theory.
What is a Big Hairy Audacious Goal (BHAG)?
BHAG is an acronym for Big Hairy Audacious Goal. Big Hairy Audacious Goal (BHAG) was conceived by the American management guru Jim C. Collins. As an author in the field of sustainability and growth of companies, he used the term in 1994 for the first time in the groundbreaking book ‘Built to Last’ that he co-wrote with co-author Jerry Porras.
A Big Hairy Audacious Goal (BHAG) indicates that ambitious long-term goals can stimulate successful companies. Concrete, clear end goals separate successful companies fundamentally from less successful companies. It is precisely the pursuit of bold ideas that makes companies very successful. A clear company goal within a certain time frame ensures a strong Big Hairy Audacious Goal (BHAG).
BHAG focuses on clearly formulated, daring goals. It is a powerful mechanism that allows companies to think ahead and that stimulates their progress.
Of course, all companies have certain objectives, but with BHAG, it goes a step further. It is a dedicated goal with a high challenge. Moreover, the objective is clearly defined, compelling and creates team spirit within the entire organisation. What has to be achieved on the finish line is clear to everyone. It is necessary that all employees across the organisation are involved with the BHAG objective from the start. Specifically, a time limit of 10 to 30 years applies. This is comparable to a SMART formulated objective, which not only has to specifically state what the final goal is, but must also be measurable, acceptable, realistic and time-bound. Features that also apply to a BHAG.
A company that will work with a Big Hairy Audacious Goal (BHAG) will have to meet a number of requirements. First, it must be able to attract the right employees. It must also be able to position itself properly. Only with passionate staff is it possible to work towards the finish line together. It’s also up to all managers at every hierarchical level to excite all employees about the final goal. They also know exactly which next steps are needed to get closer to that goal. This will ensure that every employee knows what is expected of them. Everyone will set the same course in the same way.
The power of BHAG
A Big Hairy Audacious Goal (BHAG) is not only clear, ambitious and with a time limit of 10 to 30 years. In addition, the power lies with three elements; passion, knowledge and return. Where an organisation and its employees work with passion, they will also be driven to pursue an ambitious goal. Also, there must be sufficient knowledge and expertise in the company to be able to carry out the goal expertly. Eventually, the company will also have to yield a return. It is not ambitious to just make investments. In the end, the company must also generate money at the finish line.
Because a Big Hairy Audacious Goal (BHAG) is so big and daring, it increases the sense of urgency within an organisation. An ambitious BHAG plan will change in the time frame of 10 to 30 years. That means that everyone must always be focused and feel the urgency to work hard on this goal. During the entire process, it is necessary for the organisation to grow and take its employees with it. The BHAG-oriented managers are less interested in direct success and focus on what they ultimately want to achieve. This allows them to inspire and motivate their employees.
In the past, many good BHAG ‘s have already been set by organisations and leaders. The American president John F. Kennedy had the ambition in the 1960s to put a man on the moon. Everyone said he was crazy, but it happened in the end. A few decades before, it was Henry Ford, who strove to produce an automobile for the ‘ordinary man’. This was impossible in that time.
Thanks to industrialisation, Ford was the first car manufacturer to produce a Ford with an assembly line. As a result, this car was no longer so expensive, and became accessible to a larger audience. At the moment, some companies have set a goal to produce aircraft within 30 years that will not require fossil fuel but can fly safely with electricity and/or solar energy. Too ambitious for many, but nonetheless a good example of a BHAG.
Now it’s your turn
Could you use a Big Hairy Audacious Goal (BHAG) to benefit your business? Do you recognize the practical explanation or do your have any additions? Do you have any tips or tricks that you want to share about BHAG ‘s?
Share your experience and knowledge in the comments box below.
- Amabile, T., & Kramer, S. (2012). How leaders kill meaning at work. McKinsey Quarterly, 1(2012), 124-131.
- Collins, J. C. (1999). Turning goals into results: The power of catalytic mechanisms. Harvard business review, 77, 70-84.
- Collins, J. C., & Porras, J. I. (1994, 2005). Built to last: Successful habits of visionary companies. Random House.
- Collins, J. C., & Porras, J. I. (1996). Building your company’s vision. Harvard business review, 74(5), 65.
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