“A goal should scare you a little and excite you a lot.”
– Joe Vitale
“I don’t know where to start,” said Greg, owner of an aviation safety company in western New York. “I know I want to grow up, but what am I doing? Buy a competitor? Increase my product line? Even if one of them is the answer, what’s the first step? “
Greg needed to set a long-term goal, then make a plan to achieve it. A goal of five years in the future seemed like an eternity. However, an organization needs a long term perspective to achieve important goals. Your goal should be big enough to be worth the effort and not so attainable that it doesn’t require a written plan.
Greg had a nebulous vision of what he wanted for the business; he couldn’t accomplish it because it wasn’t clearly articulated.
Suppose your goal is to grow, sell more, or some other ambiguous goal. In this case, you won’t be as successful as setting a Big, Hairy, and Bold (BHAG) goal for your business.
A BHAG is a concept featured in “Built to Last: Successful Habits of Visionary Businesses,” written by Jim Collins and Jerry Porras. A BHAG (pronounced “bee hag”) is a large-scale but achievable long-term goal for a business. In “Built to Last,” it was revealed that the most successful companies aren’t the most conservative, but rather those with adventurous and compelling goals, or BHAGs.
For example, Amazon’s BHAG is about “building a place where people can come and find and find out anything they might want to buy online.” Starbucks must be “the world’s most recognized and respected consumer brand.” Microsoft was “a computer on every desk in every house”. Stanford University will “become the Harvard of the West.” Nike’s was “Adidas Crush”. All of them are clear, long-term goals.
Your BHAG should be compelling and serve as a unifying force for the team. It must be precise while simultaneously reinforcing the culture and fundamental ambitions. Don’t make it financial; income and profit will follow if you complete your BHAG.
If you are a business owner, you are no stranger to BHAG. Starting your business was a BHAG. We take it to the next level to ignite team spirit and create momentum. BHAGs are implemented by the ambitious, as well as by organizations that need a way out of a slump.
Your BHAG will be unique to you. It should take into account what you strive to be the best in the world at, what drives profits, and what your team is deeply passionate about. It defines your ultimate level of success. It needs to be a clear target, not some fancy statement disconnected from the business model.
If you set a goal that you are quite sure you can achieve, then the goal is not big enough, hairy, and daring enough. But, if this is truly impossible, your team will completely disengage from the process. It must be achievable through proper planning and control.
“Most people overestimate what they can do in one year and underestimate what they can do in ten years.”
– Bill Gates
A characteristic of a BHAG is that it improves your organization by forcing you to improve yourself in order to accomplish it. Greg’s stumbling block was not knowledge; it was the execution. Tasks need to be defined and assigned to the right people. Don’t try to do it alone; management should be involved in developing strategies. Start with the BHAG and work backwards.
Hold your leadership team accountable for completing every achievable task. I recommend using the Entrepreneurial Operating System (EOS) technique to manage your quarterly “rocks”. (A “rock” is an important priority that you must accomplish over the next 90 days.)
This tool is described in Gino Wickman’s book “Traction: Get a Grip on Your Business”. Since this is a 1000 word column and not a book, I will demonstrate this by sharing a three year plan template broken down into achievable steps.
This model was featured in my book “Build It, Sell It, Profit: Take care of the business today to get the best price when you retire”. This plan has been used to help a business owner build a better functioning business. While this is not a “rock” BHAG plan, it shows that we start small, build momentum and hold people accountable for tasks. (Plus, you’re setting your BHAG up for failure if the foundation isn’t established.)
As you can see in our three-year example, the schedule should set specific goals at regular intervals – in this case, every 90 days.
• Speak to an insurance agent about reviewing and updating insurance policies.
• Consider a new incentive program for sales teams.
• Talk to the sales team about effective and ineffective sources of leads.
• Chat with lawyers about updating buy / sell and non-compete agreements.
• Perform an insurance review and sign new documents.
• Talk to the marketing group to focus on the best sources of leads.
• Talk to vendors of customer relationship management (CRM) software with sales tracking capabilities.
• Introduce new marketing campaigns, non-compete agreements and incentive plans.
• Select the CRM and inform employees about its use.
• Discuss next year’s goals (eg employee training and disaster preparedness).
• Launch your marketing plan on the selected medium (s).
• Assign certification expectations for specific employees.
• Document procedures and ask management to write role descriptions for review.
• Have detailed management steps to assign roles and responsibilities.
• Review supplier costs and strive to bid competitively.
• Ask management to create smart layoffs by guiding employees through the steps.
• Discuss the goals for the next year (for example, to increase the prices of services).
Obviously, your BHAG plan will be completely different. For now, I want you to understand what the bones of a shot would look like before you put meat in them. A good BHAG should feel overly ambitious, connected to your business strategy, and combine the core ideology (values and purpose) with your envisioned future.
It is not enough to have a BHAG; you need to commit to it, do whatever it takes to achieve it, and not be distracted. When faced with a business decision, ask yourself, “Does this bring us closer to our BHAG?” “