Do you need a big hairy audacious goals or do you need to define more constraints?

Every company should have a clear mission or vision. A common goal that people can gather around such at least some decisions can be made autonomously without the need of micro-managing from a single leader.

Some companies even have big hairy audacious goals, BHAGs in short.

Walmart had one, to become a $125 billion retail company by the year 2000 - when they were at $30 billion only.

Southwest airlines wanted to be the most loved and affordable for the everyday American.

Google wanted to organize the world’s information and make it unversally accessible and useful.

These were all - more or less - BHAGs that became a reality - even though they were very ambitious at the time. But they empowered the employees of these companies, because it helped them to make decisions, avoided lengthy meetings and discussions.

Imagine a team at Southwest evaluating new catering products. The parameters were clear: It needed to make flying more affordable, and customers would need to love the product offered. It provides clear guidance on how to evaluate the offerings, and makes discussions more obvious.

BHAGs can provide clarity and ease decision making. At the same time, they need to be chosen wisely and within the constraints of the market and the company.

Walmart’s BHAG was very general (make a lot of money), but still specific enough, because it was limited to the retail space. The company also had the ability to fund the growth into all kinds of new markets, leading to super stores.

A different company, Enron, set out the goal “To become the world’s leading company.” Very general, and creating a toxic culture of “success at any cost.” They achieved their goal through accounting fraud which - in the end - led to the company’s collapse.

WeWork, for example had BHAG “To elevate the world’s consciousness.” A target that was completely detached from their business. It led to no or little guidance for the team. As an employee, I might have plenty of ideas on what might elevate the world’s consciousness, but I don’t know if there is money or a critical mass of supporters in the company to make the idea a reality. WeWork also collapsed.

BHAGs are especially dangerous when they are adopted by only part of the company:
If the marketing department tells the story of an achieved goal, while the product cannot hold pace yet. Or if the engineering department hyper-focuses on the future technical problems ahead, and gets stuck. I’ve seen both, but don’t want to call names.

Of course, big hairy audacious goals can provide powerful guidance, but - like any powerful - tool, they need checks and balances.

Reflection of the Day

• Start with your personal life: Do you have an audacious goal or some values that provide you guidance? If so, is it the right guidance? If not, should you have a BHAG?
• In your work / business: Are the goals your company operates on too audacious or too constraint?

With care,

Martin