Understanding the Law of the BHAG and What it Means for Innovation

Elbert Hubbard is seen as one of the great writers, philosophers, and artists of the late 1800s. Why is that? He understood that he didn't attain that status solely because of his intelligence. He was able to share his thoughts with the world because he first set a goal to be the greatest traveling soap salesman in the northeast—and he achieved it. Hubbard proved to the world that setting a seemingly insurmountable goal is the way you achieve greatness. In today's world, companies achieve innovation in a similar way. It is called the Law of the BHAG. By setting a Big Hairy Audacious Goal, organizations are able to provide their workforce with a singular vision and passion, one that gets the wheels of innovation turning.

BHAG: The Facts

Pronounced ‘BEE-hag', this guideline for strategic business statements was developed by Jerry Porras and James Collins in the mid-90s. The acronym stands for Big Hairy Audacious Goal and, at its core, is a vision statement or goal that might seem outlandish to organizational outsiders, but is seen as both possible and exciting to those on the inside.

The goal should check off the following items:

• Be developed by the leadership team
• Focus the entire organization
• Be singular (i.e. one very specific goal)
• Be medium to long-term (roughly 10 to 30 years)
• Be both strategic and emotionally compelling (i.e. not “increase sales by 15% over the next 2 months”)
• Be clearly defined so that your team knows when they have achieved it

An essential aspect of developing a BHAG is to avoid defining the “how.” The leadership team defines what the goal is, but they should allow others in the organization to determine how they are going to achieve it. This invites the workforce to use their creativity, collaborate effectively, and unify behind a purpose. If the workforce feels that they have a hand in the creation and achievement of the goal, they will work towards it more passionately.

BHAG: Why It Works

A big goal sets innovation into motion. It does this because it serves as both a roadmap for the innovation your organization is seeking and as a rallying cry for your team. But it's more complex than that.

Often, there can be an invisible glass ceiling in organizations. It can feel like there is a limit to the possibilities, a limit to growth, and a limit to innovation. When a team accomplishes a BHAG, it blows this misconception out of the water. New life is breathed into the organizational culture.

Rather than settling for small, easy-to-swallow goals, your team will crave big, inspiring goals. No longer are employees externally motivated by the threat of being fired or getting a paycheck every month. They now have an internal motivation that gets them excited to come to work every morning.

BHAGs also help set priorities. When a BHAG is the big vision, everything else is forced to align around it. Tasks, assignments, and projects that don't fit into accomplishing the goal are clearly seen as the waste that they are. Your workforce stays focused, rather than just going through the motions of tasks that aren't effectuating innovation.

To gain these benefits of a BHAG, it is absolutely necessary that the goal comes from the top down. This creates an understanding amongst your team that leadership is 100 percent behind the goal and whatever steps are required to achieve it. When leadership sets a goal, the workforce doesn't ask if it can be achieved. The mindset shifts instead to concentrate on how it can be achieved. Doubt dissipates.

BHAG: A Tool to Become an Industry Leader

When you create and achieve a BHAG, you become an industry leader. You are seen as a big thinker, an inspiring leader, a motivating innovator. When other companies in your industry see the work that you and your team have accomplished, their level of respect for you is unchallenged. When you can excite and challenge your competitors in a new way, you will have an industry that rallies behind you and your organization.

So this is where you need to step up and really think. You need to contemplate what innovations your industry is missing. You need to discover what it is that will revolutionize both your company's market position and your industry as a whole. You need to think big—really big. The best place to start is envisioning what, in 10 years, would make your industry the most exciting industry out there.

I recently created a BHAG for the cable industry, an industry that largely works behind the scenes in people’s homes and businesses—despite the innovations that have occurred. Cable and the networks they support have the potential to change how people live, how people interact with one another, and how people interact with the things they own. Virtual reality, autonomous cars, and even holographic tables are inevitable parts of our technological future, and my BHAG is aimed at becoming the network provider that powers those technologies.

The Law of the BHAG has the potential to turn companies around and create world-altering innovations, as well as illuminate true industry leaders. To learn more about how the law of BHAG can help establish you as a leader in your industry, check out how I and my team can help.