What common mistakes are leadership teams making with Big Hairy Audacious Goals?

If your BHAGs aren’t alive, driving growth and inspiring the team, then you’ve probably gone down the wrong path. BHAGs should be like a North Star that helps guide you.

If a goal is worthy of the next decade of your team’s creative effort, you feel great about it, and driving towards it encompasses intrinsic rewards – then you’re on your way.

In this podcast, Kevin Lawrence and Brad Giles discuss why Big Hairy Audacious Goals matter, and how to make sure they are ingrained in the hearts and minds of your people.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:12

Hi there, and welcome to the Growth Whisperers where everything that we talk about is building enduring, great companies. As always, today I’m joined by my co host, Kevin Lawrence, who lives in Vancouver, and I live in Australia. Kevin, Hello, how are you doing today?

Kevin Lawrence  00:30

Today’s a great day where I got to get out and, and hang out with some, some family and get out in a boat and get around town, do a few things. Have some time to get organized for the week, because it’s my Sunday.

Brad Giles  00:54

Good to hear. So as always, we’d like to start with a word or phrase of the day, what might you have today?

Kevin Lawrence  01:03

I would say is the magic of modern science. Oh, my mom was going through some health stuff right now. And she’s had a pretty rough week. And what’s amazing is how quickly the medical system and science and how they know how to help people. Like it’s incredible. They can quickly diagnose things, figure things out. And you know, you trust it’s quite easy, at least to trust, that there’s very, very highly capable people that can deal with almost any situation. So I’m just really impressed by doctors and nurses. And that’s a field that I couldn’t ever see myself doing. But just yeah, the what science is capable of doing is spectacular. And I’m very in awe of what they can do.

Brad Giles  01:46

That’s good. I’m fascinated to see how you’re going to stitch these two together as you normally do. Mine is about digging into the numbers. And I’ve got a client we were working earlier today. And we discovered that they’ve switched from b2b to b2c model. They don’t really have a lot of competencies in that area. And we discovered that when they’re talking to a customer, and the customer says no, in fact, we’re just letting them go, rather than putting him into some kind of marketing funnel to because it’s no it’s really short for not right now. And so we wanted to we identified that and we’ve built that out. And you know, we could really, perhaps even double our conversion rate. So that’s, that’s what’s on my mind today. Love it.

Kevin Lawrence  02:37

So it’s using them is how using numbers to help improve the miracles of modern science, because they use a lot of data. Yeah, there’s a lot of data. So it’s numbers and science, and how they work together to come up with better conclusions. A bit of a week. So together, but we’re gonna run with it. So let’s dig into today. This is a topic that will be a lot of fun today, and a short one

Brad Giles  03:09

We have not yet spoken about big hairy, audacious goals on the podcast. So today, we’re talking about the five main big hairy audacious goal or BHAG mistakes, the five main BHAG mistakes, because we, you know, for a lot of people, they know the phrase has become common in business culture, obviously coined initially by Jim Collins. Yeah. But so many times I see people just butcher BHAGs.

Kevin Lawrence  03:52

Yeah, that we see. And so let’s just start with defining what a BHAG is a big, hairy audacious goal. It’s it’s a goal that’s meant to lead a company into the future. And what Collins found in his research and Good to Great, the Great, good, great or built the last. One of those two earlier books is that the enduring great companies, one of the things that he found is that many of them had B hags were in the comparison companies they didn’t. And the whole idea is it’s a massive goal of what yeah, what you want to be when you grew up, but they’re usually, you know, pretty, pretty, pretty hairy and audacious. Like, they’re really, really things that you can’t see happening with lots of organizations that are run with them. And we first set them It almost takes people’s breath away, and they people can’t even believe it. But it’s a massive mechanism to be a catalyst to stimulate progress and keep people really engaged. Much like, you know, the US had that that version of it was like to put a man on the moon. Right? Yeah, a human on the moon would be a more appropriate way to say it today. But that was an initially it was a B hag where they just they said we Want to do that and they rallied like crazy. And you know, most people believe that they did it. You know, there’s always the people who believe things didn’t happen, but you know that they have the they have video footage and that they achieve that massive goal.

Brad Giles  05:13

Yep. So Jim Collins has this Yin Yang symbol I’m sure you’ve all seen the Yin Yang, it’s a circle, and it’s got one side of it is black. And once I’ve it is white, one side says, protect the core. So that’s about the values and the purpose and the ideology. The other side is stimulate project progress. A part of that stimulating progress is this big, hairy, audacious goal. I like to say to teams, when we’re setting and B hag that there’s perhaps a 70% chance that we could hit it A and then B, there’s someone in the room who’s kind of muttering, I think you guys might be a little bit insane. Like that sounds a little bit too far out there. Now, doesn’t mean it needs to be completely unrealistic. But it needs to be audacious within it. Yes. Definition. Yeah,

Kevin Lawrence  06:01

absolutely. So we got, you know, five points here to really are five common mistakes. Number one is that it’s generally entrepreneur who’s motivated by revenue, and they pick the well, we’re going to be $100 million company or a billion dollar company, two of the most common ones that we see. But there’s that’s not tied into anything. Besides, we’re just going to do big numbers. That’s not I mean, look, if that works for you, please go ahead. We fight hard not to have that because based on really doing it, well, it should sit right in the center of what Collins calls your hedgehog principle. Hedgehog is kind of three intersection intersecting circles in a Venn diagram. And it’s What can you be the best in the world at? What do you deeply passionate about, and what drives your economic engine or what he calls profit per X? No, a profit driver in your company now figured out your hedgehog is your own his exercise, and we normally set that initially before we do the B hag, but the B hag should be right in the middle of all those it should, it should relate nicely to all of those things. Doing 100 million of revenue or a billion of revenue doesn’t relate to much of that.

Brad Giles  07:14

Because in terms of underlying strategic logic, all that we’re doing is saying, what’s the next biggest incremental number? And then we’ll just call that our goal. So there isn’t an underlying set of Yes, prevailing evidence and logic that can tell us how, why that makes sense. So it when, as practitioners for many decades, between the two of us, we look at these types of big numbers, like 100 million or a billion as just being this is just like, primary school, this is just this is yes.

Kevin Lawrence  07:53

What does it No, it says, it just says, we’re gonna get big, which is not a bad thing. But when you do it through the Hedgehog, you’re applying a strategic filter to it and weaving it into the strategy of your business. So that’s the first big mistake is it doesn’t fit into or relate to your hedgehog.

Brad Giles  08:11

So what I like to say on that is, imagine that the Big Hairy Audacious Goal is a mountain that we’re climbing. And the Hedgehog is like you’re driving a car up the mountain, that the Hedgehog is the guardrail that stops us falling off the mountain. So the hedgehog maintains the discipline through that journey over and over like time, yeah, over time. And therefore, to reverse engineer that when we begin to set the be hag, what we’re doing is we’re looking, and we’re saying, If we maintain discipline at the center of that Venn diagram, for 10 to 30 years, where could that possibly take us and that’s how we set

Kevin Lawrence  08:50

the goal some way, awesome way to put it. And so that’s the next piece number two, the mistake people make is they get the timeframe wrong. Oh my god. And now it’s meant to be 10 to 25 or 30 years, which means it’s far enough in the future that logic shouldn’t prevail. It shouldn’t be about logic. So there’s two mistakes on the timing one, people don’t think far enough out, and they have a three to five year goal, right, or a short term goal. That’s not what this is. It’s meant to be very far in the future. So you can think big, dream big, and not be caught up in today’s environment. The second mistake that people make on that is they pick a specific date, they’re going to achieve it. And they say we’re gonna achieve, you know, 2500, whatever it happens to be by 2025 because it rhymes and it sounds good. The one thing I’ve seen with B hags and I think we had a conversation with this before, but what I’ve seen is to be able to predict the year where you land it. It’s incredibly, incredibly difficult. And especially when you’re looking that far out to plan how something’s going to land in 12 to 15 years. Good luck, you know, and And so that’s the second mistake. So the two mistakes, not having a long enough time frame, and to picking a specific year.

Brad Giles  10:09

So many times I’ve heard people say, so our BHAG is in three years to do X, or in five years to do X. Okay, that’s not a BHAG, that’s just a three year goal or a five year goal. And that’s fine, it’s good to have those things. But it’s it, it is a completely different conversation to think this is what we want to achieve in 10 to 30 years, acknowledging that there’s a 20 year gap in between, this is where we want to get this is the mountain that we’re climbing, this is not a short term goal, three years will come around quite quickly. So you know, you, that’s a fundamental rule there. So let’s move on to number three. They don’t know or Cape aren’t capable of making it happened. So there has to be a connection within the Hedgehog, of what you can be the best in the world at so that’s drawn from your competencies, what are you competent in achieving? Now, maybe you could buy in another, another business, you could acquire a business to help with that. But how can we continue on this path, executing relentlessly on the boring basics and continuing to get better around what we can be the best in the world at what drives our profit per X ray, our sole kind of economic profit focus, and what we’re deeply passionate about? That connects to that first one, but you’ve got it, if you can’t be the best in the world at it, then it can’t form a part of your core business.

Kevin Lawrence  11:45

Yeah, so there’s two mistakes people make. One is that they’re not focused on things that are in their capabilities, ie, things that they’re amazing at and can be the best in the world that they’re focused on. Secondly, is that they limit themselves based on those same things as well. Because if you can see a nice little easy path to get your B hag, it’s not right. It should challenge your existing capabilities. And there should be massive holes in your plan that you don’t know how to fill yet. So this should be massive. So within your capabilities, but dramatic stretches and big gaps, because if it’s too easy, it’s not going to get you to make you’re not going to make the changes required to continue to get better and better and move towards that behind. So we need to really challenge you, although I really challenge you on stuff that you’re good at.

Brad Giles  12:37

The fourth mistake is the big hairy, audacious goal actually inspiring? Is it something that people think that’d be awesome if we could do that? Because if your bag is simply something like, we’re gonna sell 2 million pairs of glasses, that that might be just a number, but does it actually get the creative juices of the team flowing? Is it a worthy Northstar? And what I like to say to teams is, is, as we sit here today, if you could look back 10 years and say, I’ve devoted 10 years of creative energy, and we all have short careers, like 40 years or something, I’ve created 10 years of my creative energy to this big, hairy, audacious goal. Is it worth the effort? And if they’re not vigorously saying, yes, then I’d say is that really a good BHAG?

Kevin Lawrence  13:38

Right. And many people will have they’ll call it a mission, which is, you know, a term Colin’s used earlier on, but the be hag is a very specific way of looking at it is that we’re going to be the leading supplier of paint products to the consumers of Canada and United States, and be great corporate stewards, and take care of the environment. And do this and do this through sustainability. And purple butterflies, and green puppy dogs, and happy days, and a wonderful rainbow. Like people have these kind of mission statements that are in this. It’s just a bunch of corporate blah, blah, blah. There’s nothing in it. That is a single point of excitement that you can drive people to is just everything including, it’s like people bring brainstormed, hey, we’ll be really cool to achieve in the company. They put it up on a big whiteboard, and then they made it into one paragraph. It doesn’t work. It’s not engaging, it needs to be boiled down to simple impactful things. And you know, and if you take for example, the best b hags are connected to the company’s purpose. So if it was to sell 2 million pairs of glasses, maybe you landed on that, you got to bring it to life. You know if the company was about the book, the joy of seeing life vividly. just made that up. ends up, we’re gonna change the life of 2 million people. And we’re gonna allow them to more easily and affordably Enjoy, enjoy the world vividly. And there was a story and a reason behind that. And we were doing a countdown to how many people were happening to help them every week. And we were donating extra pairs are old pairs to charity. And now that like, there’s a whole thing around that you can build. But just 2000 glasses, isn’t that exciting there? It needs to mean something. And that’s where ideally it taps back into the purpose. And that’s what the best companies do.  But then it takes us number five. You got to breathe life into these things constantly. It becomes wallpaper before you know it wallpaper meaning words that disappear, you don’t even see it. And it’s got to be ingrained into the hearts and minds of the entire company. And he got to keep it there and keep it alive. Because it’s like our rallying cry. Yeah, it’s like who we are and what we’re about and the difference that we’re making. And for a lot of companies, they sometimes start strong, but then it fades really, really quickly, just like culture, it fades away and slips into mediocrity before you know it.

Brad Giles  16:40

Oh, it does, it does, we’ve got a tool that we use called actions to live, which is what we need to do in the next 90 days to get more people to more deeply understand core values, core purpose, big, hairy, audacious goal. And it’s like brushing your teeth, it’s something that you always need to do, I want to just touch on an example of a big, hairy, audacious goal. Tesla, the electric car company, to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible. And so for that big, hairy, audacious goal, the employees in the leadership team, the employees in the business, they can all get behind that. And they all believe in that. And they all must think to themselves, this is worth devoting my creative energies to, and that’s what we want. We want it to be inspiring and compelling. And not just another blah, blah goal that’s placed it up on the wall, as you said, turning, you’re turning into wallpaper.

Kevin Lawrence  17:49

Yeah, there’s lots of ways a lot of our client BHAGs don’t want to share them, because that’s very, you know, it’s private strategic tools that they’re using. But there’s a lot of great ones, it takes a bunch of time to get it right. It requires a lot of debate. But if you go through and get your hedgehog nailed, and then you go and work on your behalf, and then you, you know, sync it back with your purpose to make sure it’s in sync with that. It’s incredibly powerful. And it keeps you focused for the long haul, which is inspired and focus for the long haul, which is what it’s about. So as a reference is a great article from Harvard Business Review, Jim Collins, wrote, I think Jerry Porras was also part of it, it was called Building your company’s vision. It’s a great article, we recommend people use it all the time. And it walks you through purpose B hag. And some of those other tools in there are really, really, really is very powerful. It just it’s bothersome when it’s misused. And it’s not that compelling, powerful tool it can be or it’s also bothersome when they have a good one. But it fades to wallpaper like we’ve talked about. So a question to leave you with is, is your it? Hopefully you have one? And if you do is it relevant? does it align your team? And is it inspiring the growth that it should in your company? And when sometimes you might need your updated or dusted off, which obviously we can help you with if needed. People that we work with can help you with it. But if you don’t know what it do you think it would make a difference to how your company operate if you don’t think you need it, and that’s your choice. But if you don’t have one, consider it and go and read that article and we’ll give you some great ideas to start.

Brad Giles  19:27

Awesome. So let’s review do a quick review of the five main BHAG mistakes that we see. Number one, it should fit your hedgehog. You can’t build a BHAG with any substance unless you’ve nailed your hedgehog unless you’re confident about the hedgehog. Number two, it should be 10 to 30 years and you’ve said before 10 to 25. But the point is it’s not three and it’s not five years it’s at a minimum 10 years at a maximum 30 years. And then number three is that you must be you must know that you can draw a parallel to the capabilities to execute on that even if it takes a long time, kept you want to walk us through four and five.

Kevin Lawrence  20:13

Yeah, and needs to be inspiring, kind of like a North Star Southern Cross that helps to guide you. And it’s worthy of the next decade of you and your team’s creative effort that you’ll feel great about it. And driving towards this needs to be that intrinsic reward. And finally, it needs to be ingrained in the hearts and minds of your people. You may have an awesome one that’s faded into the background and needs to be alive and kicking in the company.  So thanks for listening. This has been the growth whisperers podcast with Brad and I’m Kevin if you haven’t subscribed, please hit the subscribe button and even share it with some of your friends and colleagues that might find it valuable. For the video version youtube.com Search the growth whisperers to reach Brad evolution partners.com.au and myself, Lawrence and co.com Hope you have an awesome week.