“Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realised. Make big plans; aim high in hope and work… Let your watchword be order and your beacon beauty. Think Big.”
– Daniel Burnham, Chicago architect (1864-1912)
One of the most important strategic decisions small and medium-sized enterprises (SMEs) can make (and probably the most difficult in a time when predicting the future of the economy seems more out of reach than ever) is to set a long-term, collective company goal.
Not just any long-term goal. More specifically, it’s critical for SMEs to establish bold, dauntless challenges – or what is commonly referred to as BHAGs (Big Hairy Audacious Goals) that can play a guiding role within a company’s overall growth trajectory and its measurement of success.
You may be wondering what exactly a BHAG is and why it is of relevance to you and your business. With so many short-term goals already becoming difficult to achieve, due to varying factors largely related to COVID-19, it might seem as though your 10 to 25-year goals need to be pushed to the side in order to keep your business afloat. However, many visionary companies such as Nike, Ford, and Honda owe their success to the long-term challenges that they’ve set for their companies, and SMEs are sure to reap similar rewards and gain the ability to launch themselves away from mediocrity by following in the footsteps of these industry giants.
A BHAG Is Critical For Your Business. Here’s Why…
The term BHAG was first coined in the book “Built to Last: Successful Habits of Visionary Companies” by Jim Collins and Jerry Porras. To quote Collins himself, a BHAG is “a powerful mechanism to stimulate progress”. BHAGs are more than just ordinary goals. They are tools that allow a business to excite, challenge, and unify company leaders and employees around a singular, clearly defined goal that, unlike short-term goals, remains as constant as the Northern Star and is more likely to reflect the company’s values and purpose.
Having a BHAG in place is the ultimate solution to the ever-looming stagnation period within a company’s lifespan. Having a clear finish line allows your company to make thoughtful decisions pertaining to recruitment efforts, expansion opportunities, product and service offerings, etc. The bottom line never changes, which means your team can remain aligned with one another due to the simple fact that they are all asking one question. Will this decision get us closer to our goal?
Not Just Any BHAG Will Do – Make It Good, Make It Hairy!
According to Collins, “a BHAG engages people – it reaches out and grabs them in the gut. It is tangible, energising, highly focused. People “get it” right away; it takes little or no explanation”. With that being said, to unlock the key to determining an effective Big Hairy Audacious Goal that has the ability to grab people in the gut and skyrocket your company into greatness, you need to ensure that your BHAGs are also centred around your ‘hedgehog concept’, which Collins describes as a deep understanding about the intersection of three predetermined questions and their answers.
1. What you are deeply passionate about
2. What you can be the best in the world at
3. What best drives your economic or resource engine
Determining the answers to the above questions will allow you to establish a BHAG or BHAGs that are at least 70% within reach, crystal clear and easy to measure, effortlessly divided into sub-goals that can be achieved on a short-term basis, possible to fit within a specific timeframe, and – most importantly – able to inspire your employees to strive toward brilliance, with or without you leading the charge.
It’s Not a One Size Fits All – Discover Which BHAG Model Suits You
Collins further expands on the concept of BHAGs by establishing the four broad categories that BHAGs can be filed under. Determining which category is most relevant to your BHAG is a great way to discover which driving factor will be the most suited to your company and ultimately end up being the most fruitful.
1. Target Oriented – Comprising qualitative or quantitative targets.
Example: Become a $125 billion company by the year 2000. (Wal-Mart, 1990)
2. Common Enemy – BHAGs in this category are focused on outperforming a company competitor.
Example: Crush Adidas. (Nike, 1960s)
3. Role Model – Aspiring toward the greatness that is associated with companies that you admire.
Example: Become the Nike of the cycling industry. (Giro Sport Design, 1986)
4. Internal Transformation – This BHAG is focused on internal systemic change and is more beneficial for larger companies.
Example: Transform this company from a chemical manufacturer into one of the preeminent drug-making companies in the world. (Merck, 1930s)
The Big Hairy Road Ahead: Steps for Moving Forward
Big Hairy Audacious Goals are the tinder needed to stoke the fire within your business. Not only do they become the compass that guides you throughout the journey toward scaling and innovating within your industry, but they align the people within the business and rally them behind a common goal.
No matter which BHAG you identify for your business or which category you align with, the end goal can only be reached with clever leadership and professional relationships bound by trust and a shared vision. At Retail Capital, we believe in the ambition and passion of SMEs. The collective vision for a brighter, more innovative, and creative future is what binds us to our community at large and it’s what will allow South Africa’s SMEs to achieve their potential and take their offering to the next level.
By choosing Retail Capital as your funding partner, you can invest in your Big Hairy Audacious Goals and break the ceiling of the limitations that you’ve previously tied your business to. Don’t need to delay your dreams any longer – fund them instead.