BHAGs [Big Hairy Audacious Goal] have animated great leaders throughout history, who have used them to stimulate progress and galvanize people. It doesn’t really matter whether you call it “mission” or “BHAG” or anything else that works for you. What matters is that you commit to something that meets the tests of a BHAG. Ask yourself the following questions about any BHAG:

• Do you and your people find the BHAG exciting?

• Is the BHAG clear, compelling, and easy to grasp?

• Does the BHAG connect to the purpose of the enterprise?

• Is the BHAG undeniably a goal, not a verbose, hard-to-understand, convoluted, impossible-to-remember mission or vision “statement”?

• Do you have substantially less than a 100 percent chance of achieving the BHAG yet at the same time believe your company can achieve the BHAG if fully committed?

• Would you be able to clearly tell if you’ve achieved the BHAG?

The best BHAGs make you think big. They force you to engage in both long-term building and short-term intensity. The only way to achieve a BHAG is with a relentless sense of urgency, day after day, week after week, month after month, for years. What do you need to do today, with monomaniacal focus, and tomorrow and the next day and the day after that to defy the probabilities and ultimately achieve your BHAG? If you’re going to put a powerful computer in every pocket, or eradicate malaria, or give every kid a solid K–12 education, or cut crime rates by 80 percent, or render impotent the dark forces of terrorism, or build the most admired company in your industry, or accomplish whatever the goal might be, you cannot possibly achieve the BHAG in mere days or weeks or months. The best corporate BHAGs require 10 to 25 years of relentless intensity to achieve.

Guided by a set of Core Values and a purpose, it chooses a Big Hairy Audacious Goal (BHAG®)* to achieve in the next 10 to 25 years. To break up the journey, the leadership team sets a series of three- to ve-year targets divided up into annual goals. These are further broken down into specific actionable steps the business takes over the next few weeks or months, adjusting tactics as the market conditions dictate.

BHAG is a registered trademark of Jim Collins and Jerry Porras.*

Employees can articulate the following key components of the company’s strategy accurately. You want all employees to align their actions with the strategy of the company. To do this, they need to know and understand the company’s 10- to 25-year goal (BHAG®); who the core customers are; the three Brand Promises everyone needs to keep; and what the company does — and be able to explain it when asked (the elevator pitch).

As we mentioned before, if your customers don't all fall in the same operating segment — if they don't all want the same things, in the same order of priority — you have two basic choices. Your first choice is to focus without apology on one operating segment, to build a single service model around one segment's needs and keep your finger on its pulse. That's what Walmart and Southwest do. If a customer outside these companies' core constituency wants to do business with them, Walmart and Southwest will certainly take the money. But the companies won't contort their service models to also meet the needs of these secondary customers. Your second choice is to build different service models for the operating segments you uncover. Think emergency rooms and outpatient clinics within a single hospital.

As we mentioned before, if your customers don't all fall in the same operating segment — if they don't all want the same things, in the same order of priority — you have two basic choices. Your first choice is to focus without apology on one operating segment, to build a single service model around one segment's needs and keep your finger on its pulse. That's what Walmart and Southwest do. If a customer outside these companies' core constituency wants to do business with them, Walmart and Southwest will certainly take the money. But the companies won't contort their service models to also meet the needs of these secondary customers. Your second choice is to build different service models for the operating segments you uncover. Think emergency rooms and outpatient clinics within a single hospital.