How You Set Profitable Business Goals
Ever heard a business state something like this? “Our company goal is to reach $100 million in revenue”. Perhaps that’s your business goal. Ever wondered why no one cares?
If you instead hear: “Our aim is to help 20 million people learn French by 2021”. (Or whatever their particular product/service may be). Sounds a bit more interesting? So how exactly do you set profitable business goals? Making the goal personal by describing how what you do helps people, and making it attainable and actionable by putting an end deadline to it, makes all the difference.
YOUR COMPANY IS LIKE A RUBBER BAND
Think of your company like a rubber band. Until you stretch it, it has no energy. But if you stretch it too far, it will break. If you don’t stretch it enough, there’s too little tension for change. Then, nothing will ever happen and you’ll find you never progress to the next stage.
WHAT’S YOUR BHAG?
You might have heard of BHAG (big hairy audacious goal) as it’s an often-mentioned business analogy.
The BHAG is described by Wikipedia as follows: “A Big Hairy Audacious Goal (BHAG) is a strategic business statement similar to a vision statement which is created to focus an organisation on a single medium-long term organisation-wide goal which is audacious, likely to be externally questionable, but not internally regarded as impossible.
The term ‘Big Hairy Audacious Goal' was proposed by James Collins and Jerry Porras in their 1994 book entitled Built to Last: Successful Habits of Visionary Companies. A BHAG encourages companies to define visionary goals that are more strategic and emotionally compelling. Many businesses set goals that describe what they hope to accomplish over the coming days, months or years. These goals help align employees of the business to work together more effectively.
Often these goals are very tactical, such as “achieve 10% revenue growth in the next 3 months.” In contrast, Collins and Porras define a BHAG (pronounced BEE-hag) as “…an audacious 10-to-30-year goal to progress towards an envisioned future.” The authors claim that a company may have more than one BHAG; there may be one overarching BHAG and other shorter-term BHAGs.”
HOW TO USE YOUR BHAG FOR INNOVATION
In addition, “A true BHAG is clear and compelling, serves as unifying focal point of effort, and acts as a clear catalyst for team spirit. It has a clear finish line, so the organisation can know when it has achieved the goal; people like to shoot for finish lines.” 1
In other words, the BHAG is the stretching of the rubber band; it’s the long-term stretch goal – the view from the top of the mountain.
To drive innovation in your company, it’s important to get everyone involved, to get to the finish line. The most important thing you need to understand is that the BHAG is not yours; rather, it is your company’s.
Running a profitable and successful business is all about getting the strategy development and execution right. Get our comprehensive, free e-book The Four Cornerstones of Strategic Execution to learn everything you need to know about executing your strategy well.
The post How You Set Profitable Business Goals appeared first on Advisory Works - .