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Think Big and I Mean BHAG Big by Nigel Wall
Setting focussed goals for your organisation is a sure recipe for success. If you make them big and
hairy as well then you are almost guaranteed to create a durable growing business. BHAG is an acronym
for the phrase Big, Hairy, Audacious Goal. It was coined by Stanford professors Jim Collins and Jerry
Porras in their book ‘Built to Last’. They picked on 18 businesses that had the most consistent growth.
Their measurement was that they must have significantly outperformed the stock market over a long
period of time. Companies that met this criteria at the time included HP, Procter & Gamble, Sony
and Johnson & Johnson. There were several key differentiators between these companies and the rest;
- They have clear values and principles
- They experimented and set BHAG’s
- They usually used home grown management
- They had a strong culture or identity
The fact is that most companies die young. A study in 1997 showed that the average life span of a company was a mere 12.5 years. Believe it or not, one third of the Fortune 500 companies in 1970 had gone by 1983. Also the average life expectancy of a Fortune 500 multinational is only 40-50 years. So size isn’t everything!
A Dutch national and long term employee of Shell, Arie de Geus was intrigued by this and supported Collins and Porras view that there was more to corporate longevity than just money making. De Geus argued “The dichotomy between profit and longevity is false, the successful company is one that can learn effectively”.
So working on the culture of your organisation, creating a learning environment and setting bold missions or BHAG’s is more likely to give you a sustainable, growing business than any other strategy.
What does a BHAG look like though? Remember one of the boldest BHAG’s ever made "I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth." Pres. Kennedy, May 25, 1961. Surely it was a crazy statement, NASA shuddered, the treasury wondered at the cost, the engineers didn’t have a line on the drawing board. However the effect was astounding and the BHAG created a wave of action and motivation. The result was that Kennedy's dream became a reality on July 20 1969, when Apollo 11 commander Neil Armstrong took a small step for himself and a giant step for humanity, leaving a dusty trail of footprints on the moon. Not only was the goal met, but such was the momentum created, that it was achieved early and allegedly under budget!
What does a BHAG look like to my company? Firstly you need to answer the 5 ‘p’ questions;
- What are we passionate about?
- What is our power, i.e. what are we, or can we be, the best at?
- What are our priorities, what is important?
- What provides, i.e. what drives our economic engine?
- What is our purpose and core values?
Once you have these you can set your BHAG, but follow these guidelines
- Set them as challenging, but avoid bravado.
- They must fit and support your 5 ‘p’ areas
- Have a long time frame 5+ years.
- Make them clear, compelling and easy to grasp.
- They must directly reflect your values.
Here’s an example of one of the original BHAG’s. Some of us remember the days when ‘Made in Japan’ meant a cheap product with shoddy workmanship. How could a Japanese company succeed when the country was tarnished with that reputation? Why not set a BHAG?
Sony set this 25 year BHAG in the 50’s
“We will become the company most known for changing the worldwide image of Japanese products as being of poor quality.”
This became their overriding goal for the foreseeable future and they set ambitious short term goals with specific actions that all took them in this direction, the rest of that story, as the saying goes, is history.
But I’m not Sony, so what can I do now? Firstly in the 50’s nobody had heard of Sony either, so firstly lift the bar and aim very high, then in a few years you too could have a multi billion dollar global branded business all of your very own! Secondly start by identifying your 5 ‘p’ areas. Next write your BHAG’s. Then implement them. Easy, isn’t it?
Nigel Wall is Regional Director of IBB Ltd.
Email him at nwall@ibbglobal.com
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