BHAG (Big Hairy Audacious Goal): The North Star for Scaling Your Business
What Is a BHAG?
Let's cut right to it: a BHAG (Big Hairy Audacious Goal) isn't just another corporate buzzword—it's a concept that can fundamentally transform how you run your business.
First coined by Jim Collins and Jerry Porras in their 1994 book "Built to Last," a BHAG is a long-term, ambitious goal that serves as a powerful mechanism to stimulate progress within an organization. It's not a quarterly target or even a five-year plan. We're talking about a 10-25 year vision that's both daunting and exciting.
I've worked with dozens of small businesses that set modest goals because they're afraid of failure. But here's the truth: playing small doesn't protect you—it limits you. A properly crafted BHAG pushes your company beyond comfortable planning horizons and forces you to think bigger than you normally would.
The Anatomy of an Effective BHAG
Not all big goals qualify as BHAGs. A true BHAG has specific characteristics that separate it from typical corporate objectives:
Clear and Compelling: A BHAG should be so clear that it requires little or no explanation. When John F. Kennedy declared, "We will put a man on the moon by the end of the decade," everyone understood exactly what success looked like.
Bold Yet Believable: Your BHAG should make people raise their eyebrows—but not roll their eyes. It exists in that sweet spot between audacious and absurd.
Time-Bound: A proper BHAG has a clear finish line, typically 10-25 years out. This long time horizon forces strategic thinking beyond the usual quarterly or annual planning cycles.
Aligned with Core Values: Your BHAG must connect directly to your company's purpose and values. Otherwise, it's just an arbitrary target that won't inspire your team.
I once worked with a local construction company that set a BHAG to "Build structures that define our city's skyline within 15 years." Was it ambitious? Absolutely. But it was also specific enough to guide decision-making and inspire their team.
BHAGs in the Rockefeller Habits Framework
If you're familiar with Verne Harnish's Rockefeller Habits (or its updated version, Scaling Up), you know that a BHAG is a cornerstone of this business scaling methodology.
In the Rockefeller Habits framework, your BHAG sits at the top of your strategic planning hierarchy. It's the ultimate destination that informs all other goals and initiatives. Here's how it fits in:
- BHAG (10-25 year vision)
- 3-5 Year Targets (milestones toward your BHAG)
- 1-Year Plan (what must happen this year)
- Quarterly Rocks (priority objectives for the next 90 days)
The beauty of this system is how it creates alignment between daily activities and your long-term vision. When implemented correctly, every employee can see how their current projects connect to the company's ultimate ambition.
I've seen too many businesses create a BHAG as a checkbox exercise, then promptly forget about it. That's a waste. Your BHAG should be referenced regularly in meetings and decision-making processes. It should help you decide which opportunities to pursue and which to decline.
Types of BHAGs (With Real-World Examples)
Collins and Porras identified four categories of BHAGs. Understanding these can help you craft one that's right for your business:
1. Target-Based BHAGs
These focus on measurable achievements. They're clear, compelling, and leave no room for ambiguity about whether you've succeeded.
Example: When Microsoft was a small player, they set a BHAG to "Put a computer on every desk and in every home." At the time, this seemed almost impossible—now it's reality.
Small Business Application: A local accounting firm might set a BHAG to "Become the go-to financial advisor for 1,000 small businesses in our region by 2035."
2. Competitive BHAGs
These goals are about beating a clearly defined competitor or becoming #1 in your field.
Example: Honda's BHAG in the 1970s was to "Crush Yamaha" in the motorcycle market.
Small Business Application: A regional grocery chain might set a BHAG to "Surpass Whole Foods in customer satisfaction scores in our market within 15 years."
3. Role Model BHAGs
These involve identifying another company (often in a different industry) and setting a goal to become like them in some way.
Example: Stanford University once set a BHAG to become "The Harvard of the West."
Small Business Application: A local marketing agency might set a BHAG to "Become the McKinsey of digital marketing for small businesses."
4. Internal Transformation BHAGs
These focus on dramatically changing something about your organization.
Example: Walmart's early BHAG was to "Become a $125 billion company by the year 2000" (which required complete transformation from its humble beginnings).
Small Business Application: A traditional manufacturing company might set a BHAG to "Transform from a product-based business to a solutions provider with 75% recurring revenue by 2035."
Why Most Small Businesses Get BHAGs Wrong
I've reviewed hundreds of BHAGs from small and mid-sized businesses, and I can tell you that most miss the mark. Here's where they typically go wrong:
They're too vague: "Become the best accounting firm in the region" doesn't cut it. How will you measure "best"? What's the timeline?
They're too modest: If your goal doesn't make you at least a little uncomfortable, it's not a BHAG. It should stretch your imagination of what's possible.
They're disconnected from core values: A BHAG that doesn't reflect what your company stands for won't inspire your team.
They're forgotten after creation: A BHAG isn't a one-time exercise—it should guide your strategy for years to come.
I worked with a software company that initially set their BHAG as "Become a leader in our industry." After some pushback, they refined it to "Create software that eliminates 1 billion hours of administrative work by 2030." The difference was dramatic—suddenly they had a goal that was measurable, inspiring, and directly connected to their mission of saving people time.
How to Create a BHAG That Actually Works
Creating an effective BHAG isn't complicated, but it does require thoughtful consideration. Here's a process I use with my clients:
- Start with your core purpose and values: Your BHAG should be a natural extension of why your company exists.
- Look 10-25 years ahead: Force yourself to think beyond the usual planning horizons.
- Consider all four BHAG types: Which approach resonates most with your team and culture?
- Draft several options: Don't settle on your first idea. Create 3-5 potential BHAGs.
- Test them with these questions:
- Is it clear and compelling?
- Is it bold yet believable?
- Does it align with our purpose and values?
- Will it stimulate progress?
- Can we articulate how we'll know when we've achieved it?
- Get feedback: Share your draft BHAG with trusted advisors, key employees, and even select customers.
- Commit and communicate: Once finalized, your BHAG should be communicated widely and referenced often.
I recently helped a family-owned manufacturing business develop their BHAG. The founder wanted something around revenue, but his children (who would eventually take over) pushed for something more meaningful. After several discussions, they landed on: "By 2040, create 10,000 manufacturing jobs in communities that have lost their industrial base." This goal connected to their values, gave them a clear metric, and provided a north star for strategic decisions.
Integrating Your BHAG into Daily Operations
Having a BHAG is one thing; using it to drive your business is another. Here's how to make your BHAG part of your operational DNA:
Make it visible: Your BHAG should be physically present in your workspace. Put it on walls, in meeting rooms, on your intranet.
Connect the dots: Regularly show how current projects and quarterly objectives connect to the BHAG.
Use it in decision-making: When facing strategic choices, ask "Which option moves us closer to our BHAG?"
Celebrate milestones: Create intermediate targets and celebrate when you hit them.
Review and refine annually: While the BHAG itself shouldn't change often, your understanding of what it means and how to achieve it might evolve.
One of my clients prints their BHAG on the back of everyone's business cards. Another starts every all-hands meeting with a reminder of their BHAG and recent progress toward it. These simple practices keep the long-term vision front and center.
Common BHAG Pitfalls to Avoid
Even with the best intentions, companies can stumble with their BHAGs. Watch out for these common traps:
Setting a BHAG by committee: While you want input, designing a BHAG to please everyone usually results in a watered-down goal that inspires no one.
Confusing a BHAG with a mission statement: Your mission is about why you exist; your BHAG is a specific destination you want to reach.
Making it too easy: If you're 100% confident you can achieve your BHAG, it's not big or hairy enough.
Changing it too frequently: A BHAG should remain stable for many years. If you're changing it annually, you've missed the point.
Failing to break it down: While the BHAG itself is long-term, you need to create shorter-term targets that mark the path toward it.
I once worked with a company that changed their BHAG three times in two years. The result? Staff stopped taking any long-term goals seriously. Your BHAG needs to be stable enough to orient your organization over time.
Is a BHAG Right for Every Business?
I'm going to say something controversial here: Not every business needs a BHAG.
If you're running a lifestyle business with no growth ambitions, or if you're planning to sell in the next few years, a 20-year vision might not make sense for you.
But if you're building something meant to last—if you want to create a company that makes a significant impact—then a well-crafted BHAG can be transformative.
The businesses I've seen achieve remarkable growth all share one thing: clarity about where they're headed. A BHAG provides that clarity in a way that few other tools can.
Final Thoughts: Your BHAG Journey
Creating a BHAG isn't the end—it's the beginning of a journey that will span years or decades. The process of pursuing your BHAG will transform your organization in ways you can't fully anticipate.
I've seen businesses completely reinvent themselves in pursuit of their BHAGs. I've watched leaders grow into visionaries. I've seen teams accomplish things they initially thought impossible.
Your BHAG shouldn't just describe a future state of your business—it should inspire the people who will create that future. When done right, it becomes more than a goal; it becomes a rallying cry that aligns and energizes your entire organization.
So ask yourself: What could your business become if you dared to think bigger? What impact could you make if you extended your planning horizon? What mountain seems just barely climbable from where you stand today?
Answer those questions honestly, and you'll be well on your way to creating a BHAG that drives your business forward for years to come.
