Few strategic planning strategies are as empowering and downright intimidating as a company’s BHAG. What is a BHAG you ask? Simply put, this acronym stands for “Big Hairy Audacious Goal”. It is a definitive statement of where a company wants to go and how it wants to get there, albeit with an audacity and sense of purpose rarely encountered in the business world. It is direct, to the point and empowers employees and management to use their greatest attributes and skills in order to enact the company’s strategic planning initiatives. So, where did this term come from and why is it such a powerful tool in strategic planning?
Before discussing its origins, it’s important to note the inherent flaws companies encounter within strategic planning. For the most part, companies have good intentions when it comes to planning. They aim to provide themselves with a long-term goal and a purpose to their pursuits. They establish this goal by determining the company’s long-term strategy and by outlining where they want to be in a given period.
Strategic planning forces companies to commit to a goal, define their objectives, and properly allocate their resources to achieve their objectives. Unfortunately, goals can be pushed out or changed. When that happens, companies rationalize the decision to move those goals out and in most cases, rationalize why they weren’t able to attain those goals. It’s somewhat of an easy pass and it allows companies to change their plans and focus on new endeavors. However, a BHAG is different because it is bold and direct in its prediction.
The term “Big Hairy Audacious Goal” was coined by Jerry Porras & James Collins in a 1996 article called “Building Your Company’s Vision”. Its purpose was to do away with conventional goal setting strategies. Unfortunately, a number of companies move their goals out, delay measuring their ability to attain those goals, or simply ignore them altogether. However, a BHAG aims to provide a clear and bold definition of where the company wants to go and what it wants to achieve. Its purpose is to be so compelling and impactful that it immediately provides a call to action to the company’s management and its employees.
Companies that declare their audacious goal not only declare it to upper management, but they also make it a point to declare it to the company’s employees, their market and to the customers they sell to. This ultimate goal drives initiative, encourages collaborative efforts and provides companies with a definitive purpose. So, how do you come up with a BHAG?
1. Define Your Company’s Ultimate Purpose
This form of strategic planning works because it forces a company to clearly outline its aspirations to management and employees. Regardless of the size of your market, or your company’s size, make it a point to clearly define your company’s purpose within your BHAG. A company’s BHAG need not be so grandiose that it involves taking over the world. Instead, focus in on that goal your company wants to attain. It could involve becoming the market leaders in a small market, or attaining a certain amount of business revenue within a given time period.
2. Declare the BHAG to Management & Employees
Ideally, you want your management to play an active role in your strategic planning and in coming up with your company’s BHAG. However, if you’ve got a clear goal in mind, make sure you declare it to your employees and management. The purpose here is to hold yourself, your company, your management, and every employee, accountable for attaining this ultimate goal. This immediately solidifies your promise to take them along for the ride. It states your intention and doesn’t allow you to back out of your statement.
3. Have Committed Team Members
In order for your company to benefit from collaborative efforts, there must be an outcome that benefits all. In this case, it’s a good idea to link your company’s BHAG with employee incentives. Nothing is as powerful as having a common purpose and rewarding employees and management for perseverance.
4. Stay Committed to the BHAG
For this ultimate goal to be successful means it must push the boundaries of your comfort zone. This means it must be so challenging that it forces management and employees to go above and beyond their normal responsibilities. It must be so audacious that it forces your company to be daring, bold and committed to achieving this long-term goal. Therefore, it's best that your BHAG is set out 5 or even 10 years into the future. It must be attainable but difficult enough to force the company and its employees to continually challenge themselves. Reaching this audacious goal is the pinnacle of strategic planning and could lead to changing the company and its market forever.
In the end, it’s far more difficult to commit to a BHAG than to come up with one. Why? Simply put, it forces us to declare our intentions to the world. It’s out there, for all to see and all to judge. It forces us to stay committed to the goal. Your company’s goal planning starts with understanding where you want to take your company.
Think back to when your company first got off the ground and use that as inspiration. Commit to your ultimate goal and make it clear to everyone what your company's BHAG is. Doing this will force everyone to remain focused on that ultimate accomplishment.
The above video explains two critical strategic planning tools; the SWOT and TOWS analysis. You can read about the differences between these two by going to: Strategic Business Planning: SWOT & TOWS Analysis
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