“A goal should scare you a little and excite you a lot.”
— Joe Vitale
“I have no idea where to start,” said Greg, the owner of an aeronautics safety company in western New York. “I know that I want to grow, but what do I do? Buy a competitor? Increase my product line? Even if one of those was the answer, what’s the first step?”
Greg needed to set a long-term goal, then figure out a plan to achieve it. An objective set five years into the future seemed like a lifetime to him. However, an organization requires a long-term perspective to accomplish goals of significance. Your goal must be big enough to be worth putting in the effort and not so accessible that it doesn’t require a written plan.
Greg had a nebulous vision of what he wanted for the company; he couldn’t accomplish it because it wasn’t clearly articulated.
Suppose your goal is to grow, sell more, or some other ambiguous objective. In that case, you won’t have as much success as you would if you defined a big, hairy, audacious goal (BHAG) for your company.
A BHAG is a concept presented in "Built to Last: Successful Habits of Visionary Companies," written by Jim Collins and Jerry Porras. A BHAG (pronounced “bee hag”) is a far-reaching but attainable long-term target for a company to strive for. In "Built to Last," it was revealed that the most successful companies weren’t the conservative ones, but rather the ones that set adventurous and compelling goals, or BHAGs.
For example, Amazon’s BHAG is “to build a place where people can come to find and discover anything they might want to buy online.” Starbucks' is to be “the most recognized & respected consumer brand in the world.” Microsoft was “a computer on every desk in every home.” Stanford University is to “become the Harvard of the west.” Nike’s was “Crush Adidas.” All are clear, long-term objectives.
Your BHAG should be compelling and serve as a unifying force for the team. It should be precise while simultaneously reinforcing core culture and ambitions. Don’t make it financial; revenue and profits will follow if you accomplish your BHAG.
If you’re a business owner, then you’re no stranger to BHAGs. Getting your company started was a BHAG. We bring it to the next level to ignite team spirit and create momentum. BHAGs are implemented by the ambitious, as well as by organizations needing a path to find their way out of a slump.
Your BHAG will be unique to you. It should consider what you strive to be the best at in the world, what drives profit and what your team is deeply passionate about. It defines your ultimate level of success. It should be a clear target, not some fanciful statement that’s disconnected from the business model.
If you set a goal that you’re entirely sure you can achieve, then the goal isn’t big, hairy and audacious enough. But, if it is genuinely impossible, your team will disengage from the process entirely. It needs to be achievable through proper planning and struggle.
“Most people overestimate what they can do in one year and underestimate what they can do in ten years.”
— Bill Gates
A feature of a BHAG is that it improves your organization by forcing you to improve to accomplish it. Greg’s stumbling block wasn’t knowledge; it was execution. Tasks need to be defined and assigned to the right people. Don’t try to do it alone; management should be involved in strategizing. Start with the BHAG and work backward.
Hold your management team accountable for accomplishing each achievable task. I advise using the Entrepreneurial Operating System (EOS) technique of managing your quarterly “rocks.” (A “rock” is an important priority that you must accomplish in the next 90 days.)
This tool is described in Gino Wickman’s book "Traction: Get a Grip on Your Business." Since this is a 1,000-word column and not a book, I’ll demonstrate by sharing a template of a three-year plan broken into achievable steps.
This template was presented in my book, "Build It, Sell It, Profit: Taking Care of Business Today to Get Top Dollar When You Retire." This plan was used to help a business owner create a better-functioning company. While it’s not a BHAG “rocks” plan, it does demonstrate that we start small, build momentum and hold people accountable for tasks. (Plus, you’re setting your BHAG up for failure if the foundation is not established.)
As you can see in our three-year example, the planning should set specific goals at regular intervals — in this case, every 90 days.
• Talk to an insurance agent about reviewing and updating business policies.
• Consider a new incentive program for sales teams.
• Talk to the sales team about effective and ineffective lead sources.
• Talk to lawyers about updating buy/sell and noncompete agreements.
• Complete a review of your insurance and sign new documents.
• Talk to the marketing group about focusing on the best lead sources.
• Speak to Customer Relationship Management (CRM) software vendors with sales-tracking capabilities.
• Introduce new marketing campaigns, noncompete agreements and incentive plans.
• Select the CRM and educate employees on its use.
• Discuss next year’s goals (e.g., employee training and disaster preparedness).
• Launch your marketing plan on the selected medium(s).
• Assign expectations of certification for particular employees.
• Document procedures and have management write descriptions of roles for review.
• Have management detail steps to assigned roles and responsibilities.
• Review vendor costs and put work out to bid for competitive prices.
• Have management create smart redundancies by walking employees through steps.
• Discuss next year’s goals (e.g., raise prices on services).
Obviously, your BHAG plan will look completely different. For now, I want you to understand what the bones of a plan would look like before you put some meat on it. A good BHAG should feel overly ambitious, connected to your company’s strategy and combine core ideology (values and purpose) with your envisioned future.
It’s not enough to have a BHAG; you need to commit to it, do whatever it takes to achieve it, and not be distracted. When confronted with a business decision, ask yourself, “Is this getting us closer to our BHAG?”