In Built to Last, Jim Collins developed the concept of Big, Hairy, Audacious Goals (BHAG). The idea is that, in a business, you need a goal that is big enough to inspire others. It also needs to be hairy and audacious, challenging and even scaring people a little, because the things most worth achieving take work.
Think about the BHAG you want to accomplish in your business—your dream, your world-changing idea, your life-changing legacy. It should be something huge that you want to accomplish ten to thirty years into your future.
Now think about what it would be like to accomplish that goal. How will you feel? How will your employees feel? How will the world be different? Close your eyes for a moment and really think about it.
Accomplishing that BHAG is going to feel amazing, right? But you have to get there first. Simply having and wanting to achieve your BHAG isn’t enough; you need a Strategic Plan.
Your Strategic Plan is the practical, time-stamped, incremental goals that plot your route to achieve your goal. Here’s why you need one and how to create it.
Why You Need a Strategic Plan
A Strategic Plan is the when and the how of your BHAG. It details with reasonable accuracy what you and your team need to achieve in the immediate and not-too-distant future to lead you to your goal.
The Strategic Plan considers questions like:
- What needs to happen by, say, year three to help move you toward your BHAG?
- What does that practically look like, in terms of operations and sales and growth?
- And, if that’s what needs to happen by year three, then what needs to be accomplished in year two and year one?
- What are the quarterly goals for the upcoming year?
Maybe you think the Strategic Plan sounds like overkill. Surely an experienced or confident business leader could move their company toward the BHAG without mapping out these short-term targets. Is a Strategic Plan really that necessary?
We’d say yes. Our imaginary friend, Fred, will help us explain why. Let’s say Fred sets out to build a shed in his backyard. Fred knows why he wants to build the shed, and he can mentally picture his end goal of how he wants it to look. He can imagine how his life will be better once he has it, and he has the power tools to make it happen.
But Fred never stops to draw up a plan with measurements. He thinks he can build a shed without putting together a cut list or planning it out step-by-step. It’s just a shed, after all. How hard can it be?
So Fred tries putting this imagined structure together. The result is a disaster—it’s a messy amalgamation of different ideas. Fred’s shed is ugly, missing pieces, and can’t stand up to the wind. He wasted money on materials because he didn’t bother measuring. He wasted time by undoing mistakes and making multiple, unnecessary trips to the hardware store to get items he forgot he needed. The envisioned shed had seemed like such an easy project when Fred started out—he thought it was going to work. How did it turn into this?
When you set out toward a goal without clear, specific planning, you set yourself up to waste time and money. You also may seriously jeopardize your chances of actually achieving your goal.
Think again about how it will feel when you accomplish your BHAG. A Strategic Plan will help you get to that feeling, so it’s well worth spending some time to create this plan.
How to Form a Strategic Plan
It’s actually not hard to form a Strategic Plan. In a nutshell, here’s how you do it:
- Write out your BHAG: Where do you want to be in thirty years?
- With the long-term target of the BHAG in mind, determine the goals you want to accomplish in the next three years.
- Figure out what you’re going to measure to determine whether or not you accomplished your three-year goals, such as revenue, number of customers, number of projects to complete, and/or number of employees.
- Now, identify three annual goals that will move you toward the three-year goals. These annual goals should be even more detailed than your three-year goals.
- Again, figure out what you’ll measure to evaluate whether or not you accomplished your annual goals.
- Break your annual goals into three to five quarterly targets. “By March, we will have accomplished [this]; by June, we will have accomplished [this]…”
- Assign team members to those quarterly goals so that responsibilities are clear as to who’s going to accomplish what, and keep the goals measurable.
Once you have a written Strategic Plan, make sure that each team member has the resources they need to accomplish their quarterly goals. Also, list out all the potential challenges that you might run into that could end up being a big deal. Consider how you’re going to solve those challenges, and give your staff support for problem-solving—a point person to troubleshoot with, or a contingency plan. Then, release the troops with their marching orders. They should know what to do and have the resources they need to do it.
Meet with your staff regularly and evaluate your progress. Are you on target? Are you behind? Are you ahead of schedule? Reset quarterly goals as needed and debrief on lessons learned. At the end of each quarter, create goals for the following quarter. When you complete a year, check how your progress measures up against your annual goal, and your three-year goal. By keeping all the goals measurable, you’ll be able to see clearly when you’ve crossed the finish line.
It’s important to periodically check in and revise your Strategic Plan to adapt to an ever-changing world. If your market changes or issues come up with your manufacturer, you can alter the Strategic Plan to work with those changes. Likewise, if an opportunity comes up, you have the flexibility within your Strategic Plan to accommodate that new opportunity, so long as it still helps you move toward the BHAG.
Take the Time to Plan
The very things that make BHAGs so inspiring also make them hard to achieve. When a goal is big, it can be overwhelming. When it’s hairy, it can feel too difficult. When it’s audacious, it can feel too risky. The result is stagnation, where you want to achieve your BHAG but are not making any tangible progress toward it.
When you take the time to create a Strategic Plan, you transform the BHAG from impossible dream to achievable goal. By breaking your BHAG into smaller sub-goals, you can make the steady progress needed to reach your end goal. As they say, every journey begins with a single step.
Don’t let your BHAG live in your imagination. Create a strategic plan and make it a reality.
Resource: Built to Last by Jim Collins & Jerry I Pollas