BHAG – many of you may remember that terminology. It was originally defined by Jim Collins and Jerry Porras in a 1996 article “Building Your Company’s Vision” and was highlighted in their book “Built to Last.” Collins and Porras defined a BHAG as…
“a form of vision statement …an audacious 10-to-30-year goal to progress towards an envisioned future."
I worked at a company where we had an “all hands” meeting and the leadership, obviously smitten by the book, announced our “BHAG” and then spent a day talking about why we needed it and what we would all reap from achieving it.
It went nowhere. Don’t get me wrong. It was a good BHAG (as BHAGs go.)
It was specific. It was BIG. It was visionary. It was a failure.
At the time I thought the reason the company didn’t achieve the BHAG was a fault of our leadership, our company politics, and even to a degree my ability. What I didn’t know is that the BHAG our leaders laid out in front of us had little chance of success from the get-go because it wasn't based on any previous experience.
It was, for all intents and purposes – a fantasy. A wonderful, great, big, fun, fantasy.
Some folks will tell you that you need to “envision the future” and have a “law of attraction mindset” – but what they don’t tell you is that any future scenario you envision that doesn’t have some connection to past success is a fantasy.
Setting Goals Based in Reality
The article discusses 2002 research on the difference between fantasizing about future outcomes and expecting future outcomes. Pulling from the article:
"They measured how much they fantasized about a positive outcome and how much they expected a positive outcome.
The difference might sound relatively trivial, but it's not. Expectations are based on past experiences. You expect to do well in an exam because you've done well in previous exams, you expect to meet another partner because you managed to meet your last partner, and so on.
Fantasies, though, involve imagining something you hope will happen in the future, but experiencing it right now. This turns out to be problematic."
What I read into that is any incentive and reward program that has a goal based on what you “hope” will happen is less effective overall than a program with a goal that has some historical validity. In other words – it might be nice to say you want your sales team to do 50% more than last quarter (a somewhat BHAG no?) and you may even provide a reward associated with it. However, if your company or your sales team has never seen a 50% increase or seen anyone even come close to a 50% increase – it might be more of a fantasy than an expectation.
Setting goals based on history is a better way.
To their credit, Collins and Parros did outline the need to connect a BHAG to your company's core values and core competencies. But I've seen a number of incentive programs where the goals are just plain fantasies. The thinking is that if we put it out there the team will rally around the sheer audaciousness of it. But that is a plan for failure.
Instead, find what has been accomplished before. What were some big successes? Add a little to that. Use that as your benchmark. Setting appropriate goals in your incentive program will change the mindset and the discussion from envisioning a fantasy – to figuring out how to achieve the goal based on previous successes.
Don’t go BHAG – go MSAG – Medium Scruffy Aggressive Goal – you’ll have a much better shot at achieving it!
Originally posted on on Incentive Intelligence