DEFINITION of 'Big Hairy Audacious Goal (BHAG)'

Big hairy audacious goal, or BHAG, refers to a clear and compelling target for an organization to strive for. The term was coined in the book “Built to Last: Successful Habits of Visionary Companies” by Jim Collins and Jerry Porras. A BHAG – pronounced “bee hag” – is a long-term goal that everyone in a company can understand and rally behind. BHAGs are meant to excite and energize people in a way that quarterly targets and lengthy missions statements often fail to.

BREAKING DOWN 'Big Hairy Audacious Goal (BHAG)'

BHAGs have a proven record of motivating businesses to reach for success. Collins and Porras point to a number of well-known mission statements – BHAGs – that galvanized organizations to achieve incredible results. The most powerful example is President Kennedy’s 1961 declaration 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 earth.” The result, of course, was a historic moon landing in 1969.

Creating a BHAG

Collins has expounded on the concept of a BHAG, laying out criteria for creating one. Because BHAGs are supposed to pull people out of short-term thinking, the time frame for a BHAG is supposed to be at least ten years, if not more. The BHAG should have a reasonable chance of being achieved – ideally, it should have at least 50% chance of success. It should also be action-oriented and exciting. The BHAG is meant to pull a team together, upgrade its desire and capabilities and push it to achieve something that wouldn't have been possible without the shared commitment.

Types of BHAGs

There are four broad categories of BHAG: role model, common enemy, targeting and internal transformation. Role-model BHAGs are about emulating the success of a well-known company. This has been overdone a bit, with many companies seeking to be “the Uber" of their industry. Common-enemy BHAGs focus on overtaking your competitors, aiming often at beating the top companies in the industry. Targeting BHAGs cover things such as becoming a billion-dollar company or ranking #1 in the industry. Internal-transformation BHAGs are generally used by large, established companies to remain competitive by revitalizing their people and their business.

Unlike many mission statements, BHAGs do seem to catch on even with people outside the companies setting them. For example, SpaceX’s goal to “enable human exploration and settlement of Mars” caught international attention. Facebook has set a few BHAGs over time, including to “make the world more open and connected” and “give everyone the power to share anything with anyone.” Google wants to “organize the world’s information and market it universally accessible and useful.”

Given what these companies have achieved already, it seems that setting BHAGs does work.

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