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.
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.
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.
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Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles.
Adaptive leadership is a model used by leaders to help individuals adapt to complex or rapidly changing environments. Adaptive leadership is defined by three core components (precious or expendable, experimentation and smart risks, disciplined assessment). Growth occurs when an organization discards ineffective ways of operating. Then, active leaders implement new initiatives and monitor their impact.
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Developed by business consultants Kenneth Blanchard and Paul Hersey in the 1960s, delegative leadership is a leadership style where authority figures empower subordinates to exercise autonomy. For this reason, it is also called laissez-faire leadership. In some cases, this type of leadership can lead to increases in work quality and decision-making. In a few other cases, this type of leadership needs to be balanced out to prevent a lack of direction and cohesiveness of the team.
Distributed leadership is based on the premise that leadership responsibilities and accountability are shared by those with the relevant skills or expertise so that the shared responsibility and accountability of multiple individuals within a workplace, bulds up as a fluid and emergent property (not controlled or held by one individual). Distributed leadership is based on eight hallmarks, or principles: shared responsibility, shared power, synergy, leadership capacity, organizational learning, equitable and ethical climate, democratic and investigative culture, and macro-community engagement.
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A leader is someone within an organization who possesses the ability to influence and lead others by example. Leaders inspire, support, and encourage those beneath them and work continuously to achieve objectives. A boss is someone within an organization who gives direct orders to subordinates, tends to be autocratic, and prefers to be in control at all times.
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Likert’s management systems were developed by American social psychologist Rensis Likert. Likert’s management systems are a series of leadership theories based on the study of various organizational dynamics and characteristics. Likert proposed four systems of management, which can also be thought of as leadership styles: Exploitative authoritative, Benevolent authoritative, Consultative, Participative.
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.
