Business success begins with a clear and compelling vision—a guiding light that illuminates the path to greatness.
This vision is embodied in what we call a BHAG, or “Big Hairy Audacious Goal.” While the term may sound whimsical, the process of defining your BHAG is a serious undertaking that can shape the future of your organization. In the next few minutes, we’ll explore the step-by-step process to define your BHAG and unleash its transformative power.
Step 1: Find Your Passion and Energy Source
The first step in defining your BHAG is to tap into your passion and identify what gives your company energy and purpose.
What gets you out of bed in the morning and keeps you burning the midnight oil?
Understanding the driving force behind your organization is essential, as your BHAG should align with your deepest values and motivations.
Consider what ignites enthusiasm within your team as well. Engage in open discussions with your leadership team and employees to discover shared passions and sources of inspiration.
Your BHAG should resonate with the collective spirit of your organization.
Step 2: Identify Your Core Competencies
Next, pinpoint what your organization can be the best in the world at.
These are your core competencies, the activities in which you excel and outshine your competitors.
A successful BHAG should leverage your unique strengths, resources, skills, and advantages.
Delve deep into what sets you apart from the competition. What can you do better than anyone else? This is not the time for modesty; it’s about recognizing and celebrating your strengths.
Step 3: Analyze Your Economic Engine
Every successful organization understands the inner workings of its economic engine—the driving force behind profitability and market potential.
To define your BHAG, you must gain a profound insight into your company’s economics.
Start by asking yourself a crucial question: “If you could pick only one ratio, profit per x, to systematically increase over time, what x would have the greatest and most sustainable impact on your economic engine?”
This question may require thorough analysis and data-driven decision-making. It involves understanding the financial dynamics that power your business and recognizing where you can optimize your profitability.
Step 4: Find the Intersection of Passion, Competence, and Economics
The heart of your BHAG lies at the intersection of your passion, competence, and economic engine. This is where the magic happens—the sweet spot that guides your actions and decisions towards long-term greatness.
Picture this intersection as a Venn diagram, where each circle represents one of these crucial elements. Your BHAG should align with the area where all three circles overlap. It’s the central idea that encapsulates your organization’s essence and potential.
Step 5: Collaborate and Choose Creatively
To ensure buy-in and alignment within your organization, involve your leadership team in the BHAG-defining process. Encourage each team member to propose their version of a potential BHAG. These initial ideas don’t need to be perfect; they serve as the starting point for creativity and exploration.
Gather these proposals and display them on a wall. It’s a visual representation of the collective imagination within your team.
Now, collectively reflect and choose the BHAG that embodies the most substantial leap of faith and elicits emotional reactions—the one with shining eyes.
Step 6: Embed and Review Annually
Once your BHAG is defined, it becomes a powerful driving force in your organization. Embed it into your company culture, communicate it to your team and stakeholders, and let it inform your strategic decisions.
Remember that a BHAG is not static. It evolves, just as your organization does. Review it annually, alongside other foundational elements like your core purpose, core values, and core customer. Adapt and refine your BHAG to reflect changing circumstances and aspirations.
Examples of Companies with Audacious BHAGs
Example 1: Google – “Organize the world’s information and make it universally accessible and useful.”
Google’s BHAG is nothing short of groundbreaking. Their vision goes beyond being just another search engine; it’s about organizing the entire world’s information and making it accessible to everyone. When you think about it, that’s an enormous task! Yet, Google has been tirelessly working toward this goal since its inception, and it’s why they’ve expanded into areas like artificial intelligence, self-driving cars, and quantum computing. Their BHAG has propelled them to innovate and push the boundaries of what’s possible in the tech world.
Example 2: Tesla – “Accelerate the world’s transition to sustainable energy.”
Tesla’s BHAG is not just about building electric cars; it’s about revolutionizing the way we think about energy. They aim to accelerate the transition to sustainable energy solutions for the entire planet. While electric cars are a big part of that equation, Tesla also invests heavily in solar energy and battery storage technology. Their BHAG has led them to develop cutting-edge products like the Powerwall and Powerpack, making renewable energy accessible to households and businesses.
Example 3: Microsoft – “A computer on every desk and in every home, running Microsoft software.”
Back in the 1980s, when Microsoft was still a young company, Bill Gates defined this BHAG. At the time, it seemed audacious because personal computers were not as ubiquitous as they are today. But Microsoft relentlessly pursued this goal, and it’s safe to say they achieved it. This BHAG not only guided their product development but also played a significant role in shaping the technology landscape we know today.
Example 4: Amazon – “To be Earth’s most customer-centric company.”
Amazon’s BHAG centres around its dedication to customers. They aim to be not just customer-centric but “Earth’s most customer-centric company.”
This BHAG has driven Amazon to constantly innovate in the realm of customer experience, from one-click shopping to Amazon Prime’s two-day delivery.
It’s why they’re always looking for new ways to make shopping more convenient and enjoyable for their customers.
Example 5: SpaceX – “Enable human life on Mars.”
Elon Musk’s SpaceX has an incredibly audacious BHAG—to enable human life on Mars.
This goal goes far beyond space exploration; it’s about ensuring the survival of humanity by becoming a multi-planetary species.
While this BHAG is still a work in progress, SpaceX has made significant strides, with missions like the Falcon Heavy launch and the development of the Starship spacecraft.
These examples demonstrate that a BHAG is not just a lofty statement; it’s a driving force that shapes an organization’s strategy, innovation, and culture. It provides a sense of purpose and inspires employees and stakeholders alike.
So, when you’re defining your own BHAG, take inspiration from these companies. Think big, think audacious, and remember that a well-crafted BHAG can set your organization on a path to extraordinary success.
Want to see how your team is doing?
Take the Scaling Up Quick Assessment: