Jim Collins says that in 1994 when he and his co-author, Jerry Porras, were writing the seminal book Built to Last, they debated what to call ambitious long-term goals that galvanize successful companies. Porras favored something businesslike and decorous, like “corporate mission.” Collins held out for a term that vividly conveyed the excitement, energy, and envelope-pushing boldness stirred up by such endeavors. He prevailed, and BHAGs (Big Hairy Audacious Goals) came galumphing into the management lexicon.
Inc. Editor-at-Large Leigh Buchanan spoke to Collins about entrepreneurs who build their whole companies around BHAGs.
How are companies that pursue BHAGs different from others?
The power of the BHAG is that it gets you out of thinking too small. A great BHAG changes the time frame and simultaneously creates a sense of urgency. It’s a real paradox. So on the one hand, you’re not going to get a BHAG done in three years. You’re not going to get it done in five years. A really good BHAG probably has a minimum length of about a decade, and many take longer than that. Two decades. Three decades. So time frames extend to where you are no longer managing for the quarter but for the quarter century.
On the other hand, because it’s so big and so audacious and so hairy it increases the sense of urgency. You look at it and say, “Oh my goodness, if we’re going to bring the world into the jet age or transform education or put a computer on every desk, then we have to get to work today with a level of intensity that is unrelenting.” Because the only way you can achieve something that big is an absolutely obsessed, monomaniacal, overwhelming intensity and focus that starts today and goes tomorrow and the next day and the next day and the next day for 365 days and then for 3,650 days--that’s how you do it.
Also, one of the roles of the BHAG is that if it’s really good and big enough you can’t achieve it if, in the process, you don’t build a great company, a great organization. If you think back to the moon mission, NASA had to really operate at a superb level to achieve that. Henry Ford was trying to democratize the automobile, which required an exceptionally well-run company. At Teach for America Wendy Kopp is achieving her BHAG by building systems, building the organization, building a way to teach, building culture, recruiting. A BHAG helps you build a great company. Because if you don’t have a great company you can’t achieve the BHAG.
Is there a difference between companies founded to pursue BHAGs and companies that adopt BHAGs as they go along?
I’m not sure there really is much of a difference. Starting from zero with the idea of building a great company is actually a BHAG in and of itself. Most enduring great companies scaled their goals as they went along and began to get traction. Some exceptionally impactful companies started out solving a problem right in front of them and then discovered how big the potential contribution of solving that problem could be. And they recognized they could achieve that. Very often for companies it’s organic how they get into that. I think the whole entrepreneurial mindset is infused with a BHAG perspective.
How do you judge if your BHAG has the appropriate level of size, hairiness, and audacity?
We have a number of tools to help you determine whether you have a good BHAG. One interesting one is, do you believe that the company has less than a 100% chance of achieving it, but that the organization can achieve it if fully committed? A 50% to 70% chance of achieving it is ideal. Not 100%. Not like 10%--gosh, if we did everything right and everything went our way we have a 10% chance of achieving this BHAG. A 50% to 70% chance is better than 100% and better than 10%.
Another key element is would it require a quantum step in your own capabilities? Because, in the end, the purpose of a BHAG is to make your organization better. It forces you to dramatically improve because otherwise you won’t be able to achieve it. It’s a mechanism to stimulate progress. Also, in 25 years will you know if you have achieved it? Would you be able to look at it and say, yeah, we actually did that? If you wouldn’t know if you’ve achieved it, it wouldn’t be a helpful BHAG.
I always think of BHAGs as a modern management idea. But, of course, we’ve had them throughout history.
I remember once somebody arguing that we weren’t the first to come up with the idea of BHAGs. And I said I don’t think any of us can claim the idea of a BHAG is something new to the world. The question then was: How far back do you think BHAGs go? Well at least to Moses, if you think about it. BHAGs have been around for a very, very long time. In industrial history, think of Henry Ford. We’re going to democratize the automobile. In 1925 there was a tiny little company called the Computing, Tabulating and Recording Company. Tom Watson changes the name to The International Business Machines Corporation. Tom Watson Jr. writes about looking at his father and thinking, you mean that little company? But Watson was setting a BHAG that it would become THE International Business Machines Corporation. Which of course it did.
What is distinctive about BHAG-driven leaders?
The true BHAG-orientated leader is less interested in success. You’re more interested in the sheer exhilarating pain of the journey. You’re not going to have that immediate gratification of accomplishment. You are going to be immersed in it and working and suffering toward it for a long time--the way artists suffer. You have to enjoy that sense of extended discomfort. It’s the quest, it’s the training, it’s the growth, it’s pushing yourself. You really get off on that. If you think standing at the top of the cliff is where the joy is, you don’t understand it. The real joy is in all the pain and growth and suffering and creativity required long before you get to the summit.
Achievements are very fleeting in terms of how they make you feel. Real BHAG people are kind of lost without the thing that pushes them, the thing they can throw themselves into. It provides an organizing construct for their lives. You wake up every single morning and get out of bed and it’s standing in the corner with large, furry feet and big glowing eyes--the BHAG. You go to bed at night and just before you close your eyes you see there in the corner with large, furry feet and big glowing eyes--the BHAG. It lives with you.
Do BHAGs affect the relationship between the leader and the led?
You guys have written a lot about dependence on the founder and the post-founder stall. One way to get around that is to make people loyal to the BHAG rather than loyal to the leader. To have a goal that is much bigger than the leader and cannot be achieved during the leader’s tenure, so that after the leader is gone it continues to provide its own momentum. You say, “See, you don’t need me. You have the goal.” If the BHAG is the beacon and inspiration, then the business is much more durable. The moon mission was one of the great BHAGs, but the person who articulated that goal was tragically taken from us in 1963. And yet the goal went right on. I think that’s something that’s really cool for entrepreneurs to grasp.
I spent the last couple of days with Tommy Caldwell, the greatest rock climber of our generation. Tommy has done more free climbs than anyone, ever. There’s like half a dozen routes he’s done that no one has even repeated. For four years he has been working on a climb that will be the hardest climb in the world. People in the climbing community have a hard time comprehending how extreme this thing is. I was asking him, “What keeps you going on this? How will you feel if, in the end, you don’t succeed?” And he said, “Every step of the way is making me grow and making me stronger and making every other climb look relatively easy. And if I don’t succeed, then I’ve given a gift to future generations. I’ve pointed the way for them.” I think he probably will succeed. But what’s interesting is that as a climber he has the same philosophy as these entrepreneurs. I’m going to put myself out there. I’m going to be pushed so hard. And in the end, what might happen is it’s an inspiration to the next generation who will pick it up from there.