A big hairy audacious goal, or better known as BHAG, is an ambition for a business.
The concept of BHAG was introduced by Jim Collins, author of Built to Last: Successful Habits of Visionary Companies.
BHAG is a long term goal. This North Star serves several purposes.
First, BHAG paints a picture on where the business wants to be. Examples of BHAG are ‘to reach a valuation of $500M,’ or ‘to be the biggest manufacturer of hardwood floors in the country.’ These BHAGs are inspiring.
Second, BHAG gets employees to think differently. This lofty ambition drives innovative thinking. To achieve that goal, the business would need to be creative in developing value-added products, or finding new ways to fulfil needs.
Third, and perhaps the most important of all, is it encourages the business to keep improving. Leaders would constantly challenge their teams to take risks in exploring. Learning from failure is part of the journey to great innovation.
To summarize, it is beneficial to set a big hairy audacious goal for your business. Without it, you might be coasting along while missing opportunities that would take your business to new heights.