Stanford University successfully transformed itself from a good regional institution into one of the country’s greatest universities after setting a goal to become the “Harvard of the West.”
Walt Disney created a cult-like following after setting a goal to create the happiest place on earth.
Amazon acquired Zappos with a $1.2 billion valuation less than 10 years after Tony Hsieh, the visionary CEO of Zappos, set a goal to reach $1 billion in sales.
These are all examples of what Jim Collins and Jerry Porras called a BHAG (Big Hairy Audacious Goal) in their book, Built to Last. A BHAG is a goal that is a bit too far out of reach and challenges you to stretch. BHAGs push you harder, can take decades to reach, and help you achieve things you never imagined. And it’s one of the things that Collins and Porras found distinguishes GREAT companies from average ones.
Collins even goes so far as to say that if you don’t have a BHAG, chances are that you’re not in business for the long haul. “A BHAG will stimulate growth and make us better and stronger, even if it is cumulative failure along the way,” Collins said during a speech at an Inc. 500/5000 conference.
So, what makes a good BHAG?
According to Collins and Porras, a good BHAG is:
Compelling. BHAGs aren’t the same old status quo goals. They are a bit outrageous and ambitious—if your first reaction to a BHAG is that it’s impossible, you’re most likely on the right track. BHAGs are interesting, exciting, energizing, and unifying.
Attached to a Clear Target. People shoot for the finish line. Give your BHAG a clearly stated target so that people know when the goal has been achieved.
Highly Focused. People should understand yourBHAG right away. It shouldn’t require an explanation, be verbose, or include corporate language. A simply stated BHAG will help drive forward motion. A complex BHAG will do little to stimulate progress.
Aligned. When you tie your BHAG to your company’s purpose and what’s most important, you can create true transformation.
Achievable, but Difficult. It’s important to set a BHAG that is achievable as opposed to impossible. If your team believes that there is no way to reach the BHAG, they won’t get on board. BUT when you set a goal that requires ingenuity, innovation, and different thinking, you generate team spirit.
Collins says the best way to determine if you have a good BHAG is to ask the following questions:
- Does it stimulate forward progress?
- Does it create momentum?
- Does it get people’s juices flowing?
- Do they find it stimulating, exciting, and adventurous?
- Are they willing to throw their creative talents and human energies into it?
Instead of setting a regular goal, take the bold action of creating a good BHAG. Not only is this a powerful way to stimulate growth in your company, it’s also an excellent way to distinguish yourself from others, encourage discipline, and ignite transformation.