The notion of a big hairy audacious goal was first introduced by Jim Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies. A big hairy audacious goal (BHAG) is a clear and compelling long-term goal guided by a company’s values and purpose.
Component
Description
Origin
Coined by business scholars James Collins and Jerry Porras in their book “Built to Last: Successful Habits of Visionary Companies” (1994).
Purpose
A BHAG is a long-term strategic goal that inspires and motivates an organization or team. It serves as a bold and clear vision of what the organization aims to achieve, often driving innovation, focus, and commitment.
Components
A BHAG typically includes the following elements:
1. Ambitious Objective: A BHAG sets a significant and audacious objective that may seem unattainable at first.
2. Clear Time Frame: It has a defined time frame or deadline, creating a sense of urgency.
3. Inspiring Vision: A BHAG should be inspiring and capture the organization’s core purpose and values.
Characteristics
– Audacious: BHAGs should be daring and ambitious, pushing the organization beyond its comfort zone.
– Long-Term: They are typically long-term goals, often spanning 10 to 30 years.
– Measurable: BHAGs are quantifiable and come with specific metrics for tracking progress.
Examples
– Google’s BHAG: “Organize the world’s information and make it universally accessible and useful.”
– NASA’s BHAG (1960s): “Put a man on the moon and return him safely to Earth before the end of the decade.”
Applications
– Strategic planning and goal setting.
– Motivating teams and employees.
– Driving innovation and breakthrough thinking.
Benefits
– Inspires and aligns the organization’s efforts.
– Encourages a long-term perspective.
– Fuels innovation and creativity.
Drawbacks
– BHAGs can be intimidating and demotivating if they are too unrealistic or unattainable.
– They may require significant resources and effort to achieve.
Key Takeaway
A Big Hairy Audacious Goal (BHAG) is an ambitious and inspiring long-term strategic objective that guides an organization’s efforts and motivates its members. BHAGs are characterized by audacity, measurability, and a clear time frame.
Table of Contents
Understanding a big hairy audacious goal
The notion of a big hairy audacious goal was first introduced by Jim Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies.
Several key points define a BHAG. The goal must:
Shift the way the company does business or how it is perceived in the industry. These goals may be audacious or innovative and be the result of out-of-the-box thinking.
Encourage the company to work outside its comfort zone with confidence, commitment, and even a little arrogance.
Require little explanation. In other words, people should understand what the company is trying to do with little effort. NASA and its mission to put a man on the moon is one such example.
Be aligned with organizational strategy, lest it becomes a hollow aspirational statement.
Be worked toward every day with a sense of urgency, even if it may not be realized for decades.
Creating a big hairy audacious goal
When companies sit down to create a big audacious hairy goal, many make the mistake of not aiming high enough.
Indeed, the goal has to be audacious enough that there is a realistic chance of not achieving it.
To counteract this tendency, it is useful to set a goal with a 70% chance of success.
This encourages the organization to be brave and take a risk, which stimulates progress and forces it to dramatically improve its processes.
With that said, below is a general framework for creating a BHAG:
Conceptualize
An idea must first be brainstormed that will change the business, industry, or the lives of consumers.
It’s important to let go of constraints and allow imaginative ideas to be considered.
The idea must be action-oriented, innovative, compelling, exciting, and take a minimum of 10 years to implement.
Test
Run each idea through a feasibility test to determine whether it is something the company can realistically fund.
Commit
This may be the hardest part.
Commitment means the goal is broken down into smaller parts and work is started as soon as possible.
Progress should be monitored over the years to ensure the organization does not lose interest in its goal.
To that end, the goal should be measurable and have a clear finish line.
This motivates employees to work toward a defined endpoint.
Big hairy audacious goal examples
Here is a look at a few big hairy audacious goals from notable companies or organizations:
General Electric – “Become #1 or #2 in every market we serve and revolutionize this company to have the speed and agility of a small enterprise.”
Walmart (1990) – “Become a $125 billion company by year 2000.”
Starbucks – “Become the most recognized & respected consumer brand in the world.”
Amazon – “Every book, ever printed, in any language, all available in less than 60 seconds.”
Microsoft – “A computer on every desk in every home.”
Stanford University – “Become the Harvard of the west.”
Big Hairy Audacious Goal examples
Here are some Big Hairy Audacious Goals (BHAGs) from some well-known companies.
Microsoft has a diversified businessmodel, spanning from Office to gaming (with Xbox), LinkedIn, search (with Bing), and enterprise services (with GitHub). In 2021, Microsoft made over $168 billion in revenues, of which over $52 billion came from Server products and cloud services and $39.8 billion came from Office products and cloud services. Windows generated over $23 billion, Gaming generated over $15 billion, LinkedIn over $10 billion, and search advertising (through Bing) over $8.5 billion.
In a 2006 conference where Bill Gates announced he would be spending more time on his philanthropic endeavors, the billionaire businessman took the audience back to when he and Paul Allen founded the company over 30 years ago.
“We talked about a computer on every desk and in every home. It’s been amazing to see so much of that dream become a reality and touch so many lives,” Gates explained.
Boeing
In the second example, take yourself back to 1952 and imagine you are a member of Boeing’s management team.
The company’s engineers have a BHAG to build a large commercial jet aircraft despite:
Zero presence in the market and several previous attempts that ended in failure.
Expertise in military aircraft only.
Little interest in Boeing’s jet-powered product from the few commercial airline companies that did exist in the 50s, and
With over $555 billion in net sales in 2021 the company operates a differentiated Omni business model with three primary units comprising Walmart U.S, Walmart International, and Sam’s Club (approximately 12% of its net sales) a membership-only warehouse clubs. Together with Walmart+, a subscription service including unlimited free shipping, unlimited delivery from its stores, and discounts launched in 2021.
Walmart’s BHAG to become a $125 billion company by the year 2000 is one we mentioned earlier that deserves a more detailed explanation.
While this particular BHAG is now well documented, a lesser-known fact is that Sam Walton had a history of setting audacious goals.
In 1977 he set out to reach a $1 billion valuation and then, in 1990, wanted to double the number of Walmart stores by the end of the millennium.
When the original goal of making Walmart a $125 billion company was slated in 1991, critics believed the odds of reaching this objective were slim.
Walmart had around $30 billion in revenue at the time and it was doubtful whether it could continue to grow at a suitable pace.
Adding to these doubts was the fact that Walton had recently stepped down as CEO and handed the reins to David Glass – a man lacking in charisma who did not inspire the confidence of others.
However, history will show that Glass led Walmart to a $125 billion valuation. He even managed to pull off this Big Hairy Audacious Goal two years ahead of schedule.
Nike vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”
In the 1960s, Nike had a simple BHAG: “Crush Adidas”.
At the time, Nike was an obscure company known as Blue Ribbon Sports with only one shirt and one pair of shoes in its product lineup.
Adidas, on the other hand, was the dominant player in the sportswear industry.
The two companies have been locked in an incessant battle ever since.
BHAG: “Become #1 or #2 in every market we serve and revolutionize this company to have the speed and agility of a small enterprise.”
Achievement: General Electric’s BHAG emphasized market leadership and agility. While GE faced challenges along the way, this BHAG guided the company’s strategic decisions and transformations, contributing to its enduring presence and innovation in various industries.
Starbucks
BHAG: “Become the most recognized & respected consumer brand in the world.”
Achievement: Starbucks’ BHAG focused on brand recognition and respect. The coffeehouse chain has made significant strides in achieving this goal, expanding its global footprint and becoming synonymous with premium coffee experiences.
Amazon
BHAG: “Every book, ever printed, in any language, all available in less than 60 seconds.”
Achievement: Amazon’s BHAG in the early days of the company aimed to revolutionize the way books were distributed and accessed. While Amazon has diversified far beyond books, this BHAG was instrumental in shaping the company’s commitment to speed, convenience, and a vast product selection.
Stanford University
BHAG: “Become the Harvard of the west.”
Achievement: Stanford University’s BHAG sought to establish itself as a prestigious academic institution on the West Coast of the United States. Over the years, Stanford has achieved recognition as one of the world’s leading universities, fulfilling its BHAG.
Key takeaways
A big hairy audacious goal is a clear and compelling long-term goal that requires innovative thinking. The concept was first introduced to the world by Jim Collins and Jerry Porras.
A big hairy audacious goal must change the landscape of a business or industry and requires that employees work outside their comfort zones. These goals must also be self-explanatory and easily understood.
Big hairy audacious goals have been set and then accomplished by visionary companies such as Amazon, Microsoft, Starbucks, and Walmart.
Key Highlights
Big Hairy Audacious Goal (BHAG): Coined by Jim Collins and Jerry Porras, a BHAG is a clear and compelling long-term goal that shifts the way a company does business or is perceived in the industry. It encourages the company to work outside its comfort zone and is aligned with the organization’s values and purpose.
Creating a BHAG: When creating a BHAG, it’s important to aim high enough and set a goal with a 70% chance of success to stimulate progress and improvement. The process involves conceptualizing an innovative and action-oriented idea, testing its feasibility, and committing to breaking it down into smaller parts and working towards it every day with a sense of urgency.
Examples of BHAGs: Notable companies like General Electric, Walmart, Starbucks, Amazon, Microsoft, and Boeing have set and achieved BHAGs that have revolutionized their industries and changed the way they do business.
Key Takeaways: BHAGs are transformative long-term goals that require out-of-the-box thinking and confidence to work outside the comfort zone. They have been successfully implemented by visionary companies, leading to significant achievements and industry shifts.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
