Monthly Archives: January 2012

The term Big Hairy Audacious Goal (“BHAG”) was proposed by James Collins and Jerry Porras in their 1994 book entitled Built to Last: Successful Habits of Visionary Companies. A BHAG encourages companies to define visionary goals that are more strategic and emotionally compelling. – Excerpt from http://en.wikipedia.org/wiki/Big_Hairy_Audacious_Goal

There are many terms to describe what a grand vision is. Big Hairy Audacious Goal, or ‘BHAG’, is arguably the top industry term used to describe a truly compelling vision that sits atop your strategic plan. Since it was coined in the mid 90’s by Jim Collins and Jerry Porras, its’ use has spread around the world and is commonly used by top strategy management organizations and Harvard strategy professors alike. It’s certainly one of the least ‘professional’ sounding industry terms related to strategy, but that seems to be what makes people pay attention. It’s unusual and bold, just like the statement is intended to be.

It blows by all of the questions of why what your organization is doing may be important. Not to be mistaken for the boring “vision” statements that most organizations write and then ignore, a bold vision (BHAG) carried by bold and capable leaders inspires employees and engages the best they have to offer. Visions are meant to impact decisions people make all year long.

What makes a BHAG powerful is that if it’s matched with equally capable leadership, it mobilizes engaged employees in a way that elicits their discretionary effort. The combination of:
• The reach of the vision
• The culture of the organization
• Employee confidence in the leadership, and
• The sense of opportunity this creates
… ultimately sets the temperature for everything related to strategy and planning within an organization. If the leaders are trusted, and capable, employees will gladly follow them down the path toward something great and exciting.

All of the other components of a well-articulated strategy management system (value discipline, strategy map, balanced scorecard, accountability framework, etc…) require a compelling vision to drive them. They are mechanisms, this is the path. Inevitably, decisions made outside of the context of a well-articulated strategy and compelling vision are always challenging (as it should be), because there’s no context.

“A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines.” — Jim Collins and Porras

BIG HAIRY AUDACIOUS GOALS ARE:
• Action-oriented
• Clear (who, what, where, by when)
• Compelling and gripping – people “get it” right away
• Bold; bordering on hubris and the unattainable

If there isn’t a clearly expressed gap between where you are, and where you want to be, motivation in your organization will be weak. There’s just no way around that. The concept of “do your job” and “focus on excellence at your role” are for operational organizations that are in a holding pattern. Progression can’t be achieved when there is no compelling objective to guide where you’re moving. When you focus too long on how great you are now, it erodes the impetus for change. Celebrate, and then move on to the next challenge.

Here’s a fact: if your employees are focused only on “doing their jobs,” your organization isn’t progressing in its market. Rather, you need them “doing their part,” which is significantly different. Doing their part means doing their jobs within the context of the strategy. My favorite example of this is a WestJet employee. Typically, they understand that their job isn’t just to sell you a ticket, or show you how to put a seatbelt on. They understand that their job is to serve up the strategy (brand). Without them, the strategy doesn’t work. Sometimes this happens because executives think that strategy is supposed to only exist at their level, and other times its because there is no clearly accepted strategy and future focus for the organization. The reality is that your competitive strategy is always carried to your customers by your employees.

To that end, you need gaps. Gaps tell people where you’re focusing. The extent of the gap tells us how important closing it is. Gaps also indicate leadership, because when most leaders want to focus on making things look as positive as they can, real leadership is being brave enough to acknowledge where things aren’t perfect.

Make friends with the concept of performance gaps.

The concept of a powerful and deeply rooted purpose is one of the most powerful things. It has caused people and organizations to accomplish great feats beyond what could have been imagined previously. Just about every person you admire is a result of deeply rooted purpose because real success isn’t accidental. People with purpose have the potential to change the world (provided they have a few other things too) because they are actively steering their own destiny. They happen to life, life doesn’t happen to them.

I love the concept of the Big Hairy Audacious Goal (BHAG), which was proposed by James Collins and Jerry Porras in their book “Built to last: Successful Habits of Visionary Companies.” A BHAG is used to define goals that are strategic and compelling on an emotional level. Here are a couple of my favorites:

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Google: Organize the world’s information and make it universally accessible and useful.

AIESEC: Engage and develop every young person in the world.

Amazon: Every book, ever printed, in any language, all available in less than 60 seconds. Also: Earth’s most customer centric company.

Disney: Build Disneyland – and build it to our image, not industry standards. To be the best company in the world for all fields of family entertainment.

Microsoft: “A computer on every desk and in every home.”

Sony: Change the worldwide image of Japanese products as poor quality; create a pocketable transistor radio.

Twitter: To become “the pulse of the planet.”

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Anything is possible once you define and describe it.

For people like you and I, strategy development can be incredibly exciting and rewarding. Once you have your strategy, and you’ve got a strategy map and scorecard completely linked and tied to compensation and executive performance plans… and everything finally fits. Well, it’s fantastic.

Here’s the reality check: All of that great work is for nothing if you don’t bring your people along. Here are two truths:

1) Strategy can’t travel to your clients without first going through your employees (competitive strategy actualization, customer experience)
2) Culture trumps strategy every time

Employees may not live in the blue sky realm with your executive and OSM, but they are the ones delivering on the brand and the value discipline. Their actions create the brand, because a brand actually exists in the hearts and minds of your customers and potential customers. Culture, employee engagement and leadership are the keys to making your strategy work. Coming up with the strategy is actually the easier part, it’s making it real that only 1 out of 5 companies succeed in.

If you find yourself in the position of taking over the reins of a strategy management position, where do you begin? There are so many facets to this kind of work that it can be a daunting task. Particularly because focusing on the wrong thing can be a huge opportunity cost for your organization. Sometimes focusing on initiating strategy management processes is the first step. Other times, education is where you need to begin. It all depends on where the organization and the leadership is at.

Here are a couple base questions you need to answer to get your bearings:

Is the common view of how you’re performing truly accurate? (don’t take anyone’s word for it)
Is the vision of where you’re going compelling, and is it big enough? (are people driven by it and understand it consistently)
Is there a central competitive strategy that everyone understands and is aligning to? (everyone has a plan in place)
Are people meaningfully connected to it? (people truly get it)
Do your leaders truly lead alignment to strategy? (they act as strategy advocates)

Moving forward before you answer these questions could be a mistake. Sometimes your greatest challenge is the lack of defined direction and strategic clarity. Other times it’s a lack of real leaders. And yet other times it’s a lack of the processes that create the right conversations. But defining the issue before you proceed will set you up for success.