Notes from the Corporate Underground

To BHAG or Not to BHAG

Stan. Sewitch

Some years ago, the bestselling book on business was "Good to Great", by Jim Collins. That book was a field study of 11 companies who fit certain criteria for being "great" that Collins proposed. One can quibble with his definition, but I think the criteria represented a fairly reasonable business definition of greatness. One of the common elements he identified was that each of the eleven subject organizations employed a rather ambitious, measurable objective towards which the entire organization could focus its collective efforts. Collins and his team coined the defining acronym for this goal: BHAG, a "big, hairy, audacious goal".

While the business community readily adopted this term, and much effort has been devoted to organizations devising their own BHAG, I have listened to recent discussions debating the value of applying this concept to any given organization. There appears to be a rising number of BHAG skeptics contesting a core of "believers" who employ the concept with continued fervor. What are the objections?

Some say that establishing objectives that are big enough, hairy enough and audacious enough to warrant the title can cause damage. Organizations can stretch themselves to breaking in attempting the goal. The BHAG can threaten to compromise ethics during the pursuit if the ends trump the means. And if the BHAG is only partially achieved, the results will be disappointing, even if they are remarkable by "normal" standards. The proponents counter that great things are only accomplished when a group envisions a truly significant change in the future. They say you have to reach high to get to the top of the tree. And they counter that if we shoot for the stars and only get to Mars, we've still accomplished incredible things. Preventing disappointment is merely a matter of education and communication along the way.

These are valuable viewpoints, in my opinion. The challenge to conventional wisdom is essential. And it's one of the many reasons why I love this country. Every point is open to debate and exploration. Americans are independent cusses, as a whole. Just because a book is a best seller doesn't mean we all adopt it like pliant pets. The dissent causes me to consider the underlying issues of establishing any goal. And as I do that, I arrive at the key ingredient for any goal that must be present for it to have any chance of fulfillment. That ingredient is meaning.

A BHAG cannot catalyze organizational efforts in a cohesive direction unless that BHAG means something to a critical mass of people within the organization. Even easy goals go unmet if they mean little or nothing to those responsible for accomplishing them. And the magnitude of a goal can indeed have an impact on its meaning, for some people. I know I'm affected by the sheer scope of a goal. It's not the only factor to create meaning, but size makes a difference to me if the size of the objective translates to breadth of positive impact on the people involved. Our investment company's mission is such a BHAG. If our goal was to be instrumental in creating ten middle class careers in ten years, instead of 10,000, I'd be much less interested in devoting the time, energy and funding required. But because the meaning I derive from pursuing this massive objective sustains me through the difficult and hard work involved, I will be satisfied if at the end of ten years we can say we gave it our all, even though we might have fallen short of the numerical target.

I suspect I'm not too different from other people. I need a goal that makes my life larger than just me. I need a goal that creates rich experiences I wouldn't have if I didn't pursue that goal. I need a goal that is worth giving my life to, worth the sleepless nights and hard work required. That is what all of us must ultimately choose. We have to decide how to spend the hours of our lives, given the cards we've been dealt and the opportunities we can create. A BHAG can be a catalyzing compass direction, providing that kind of meaning.

The key in resolving the debate is that the acronym is incomplete. It's a lot harder to glibly say, but we would do better with BMHAG, with the "M" standing for "meaningful". The critics of applying the concept of a BHAG are right, in a way. If the BHAG contains an audacious, massive metric, but no meaning, then pursuit of that BHAG will be ineffective and even destructive to the relationships within the organization. But if an organization can find the collectively supportable meaning to join the audacity, then a B(M)HAG can be the necessary ingredient to greatness that Collins suggests.



Stan Sewitch
HRG, Inc.

Stan SewitchStan is the founder and CEO of HRG, Inc. Formed in 1989, HRG initially provided organizational, operational, human resources and strategic consulting to hundreds of high-tech and middle-market companies. HRG's service assets were acquired by RSM McGladrey in 1999, and Stan continued with RSM until October of 2004. During his tenure with RSM, Stan was a Senior Partner, leading the southern California strategy and organizational consulting practice, comprised of four offices and serving clients throughout the western U.S. as well as other states. Stan left RSM to continue with HRG, developing it as a center for high-level expertise and investment financing for innovation-based ventures. HRG provides expertise and funding to qualified organizations, and consulting to clients of all types in strategy, organizational effectiveness and executive leadership development.

Stan also formed two other companies. In 1990, he launched Emlyn Systems, a software company publishing a human resources information system. In 1991 he co-founded Chromagen, a biotechnology company endeavoring to commercialize proprietary assays for drug research.

Prior to his entrepreneurial adventures, Stan held senior management positions in operations and human resources. He was manufacturing director for TRW's LSI products division in San Diego. LSI was the first company to produce one-micron analog-to-digital converters and high-speed digital signal processors in CMOS. Stan was also operations director for Elm Corporation, a salmon fishery in Bethel, Alaska. Stan's human resources management positions included Martin Marietta Aluminum, Smith International, TRW and Mycogen Corporation.

Stan holds an M.S. in Industrial/Organizational Psychology from California State University, Long Beach, and a B.A. in Psychology from San Diego State University.

Stan authored a weekly column on various issues in business for the San Diego Daily Transcript, entitled "Notes from the Corporate Underground" and is working on a book of the same title. He is a frequent speaker at professional and trade organizations. He was a faculty instructor for UCSD's Extension School of Engineering for five years, teaching a course in technical group leadership.

Personal interests include teaching the martial art of Kenpo and playing bass in the local rock band, "Big Blue Cat".