Built to Last, by Jim Collins and Jerry I. Porras

Vision-Level BHAG
Chapter 11, pages 232–234

All companies have goals. But there is a difference between merely “having a goal” and becoming committed to a huge, daunting challenge—like climbing a big mountain. A true BHAG (Big Hairy Audacious Goal) is clear and compelling and serves as a unifying focal point of effort and acts as a catalyst for team spirit. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines. A BHAG engages people—it reaches out and grabs them in the gut. It is tangible, energizing, highly focused. People “get it” right away; it takes little or no explanation. For example, the 1960s moon mission didn’t need a committee to spend endless hours wordsmithing the goal into a verbose, impossible-to-remember “mission statement.” The goal itself—the mountain to climb—was so easy to grasp, so compelling in its own right, that it could be said one hundred different ways, yet be easily understood by everyone. When an expedition sets out to climb Mount Everest, it doesn’t need a three-page mission statement to explain what Mount Everest is. Most corporate statements we've seen do little to provoke forward movement because they do not contain the powerful mechanism of a BHAG.

Although organizations may have many BHAGs at different levels operating all at the same time, vision requires a special type of BHAG—a “vision level” BHAG that applies to the entire organization and requires 10 to 30 years of effort to complete. Setting the BHAG 10 to 30 years into the future requires thinking beyond the current capabilities of the organization and current environmental trends, forces, and conditions. Indeed, inventing such a goal forces an executive team to be visionary, rather than just strategic or tactical. A BHAG should not be a sure bet—perhaps only 50 pecent to 70 percent probability of success—but the organization must believe “we can do it anyway.” It should require extraordinary effort, and perhaps a little luck.

In creating such a vision-level BHAG we suggest thinking about the following four categories: target, common enemy, role model, or internal transformation.

Target BHAGs can be quantitative or qualitative. Examples:
• Become a $125 billion company by the year 2000 (Wal-Mart, 1990)
• Democratize the automobile (Ford, early 1900s)

Common-enemy BHAGs involve focusing on beating a common enemy—a David versus Goliath BHAG. Examples:
• Knock off RJR as the #1 tobacco company in the world (Philip Morris, 1950s)
• Yamaha Wo tsubusu! (We will crush, squash, slaughter Yamaha!) (Honda, 1970s)

Role Model BHAGs are particularly effective for up-and-coming organizations with bright prospects. Examples:
• Become the Nike of the cycling industry (Giro Sport Design, 1986)
• Become the Harvard of the West (Stanford University, 1940s)

Internal Transformation BHAGs tend to be effective in old or large organizations in need of internal transformation. Examples:
• Become #1 or #2 in every market we serve and revolutionize this company to have the strengths of a big company combined with the leanness and agility of a small company (General Electric, 1980s)
• Transform this division from a poorly respected internal products supplier to one of the most respected, exciting, and sought-after divisions in the company (components support division of a computer products company, 1989)