Q. 117  BHAG (Big Hairy Audacious Goal) pronounced as Bee-HAG as a concept that proposes setting up of Audacious Business Goals. Should such goals be considered as driving force for Black Belt projects? 

While answering this question, please keep in mind that in Lean Six Sigma world, we focus on SMART goals (that are achievable), while BHAG is likely to be seemingly unachievable.  

  

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BHAG, an acronym for Big Hairy Audacious Goal conceived by James Collins and Jerry Porras indicates long-term goals of companies. While BHAG encourages companies to have clear goals with commitment and confidence of stakeholders, it becomes pretty contradictory as we focus on SMART goals in Six Sigma when compared to goals with a time-limit of 10-30 years. 

3 most important aspects which we can consider here for successful implementation of BHAG is: Zeal, Knowledge and Monetary.  Would all the stakeholders have the same zeal to work-for 10 to 30 years..?  Knowledge - Sufficient knowledge and information plays a critical role here, and finally - Monetary Returns for the company at the end of a project.  Answer for all the 3 aspects is to be 'Yes' to think-over if we can use BHAG in the orgnaization. 

Referring to SMART Goals vis-à-vis BHAG: while BHAG cannot be considered as a driving force for Black Belt Projects - Black Belt Projects can be considered as a driving force to achieve BHAG.  Considering examples like NASA (landing a man on the moon and returning him safely to the earth), Google (organize the world's information), Tesla (accelerate the world's transition to sustainable energy), Uber (Transportation as reliable as running water, everywhere for everyone), Etc. - every organization must have a clear visionary Big Hairy Audacious Goals which should be a Superset of many Black Belt Projects.

 

Let us see what is BHAG first. Per wikipedia definition, BHAG pronounced as Bee-HAG , is a strategic business statement, which portrays an organisation wide goal which is audacious and is likely to be questionable externally but within the organisation would be regarded as impossible.  The term, was first coined by James Collins and Jerry Porras in the book titled " Built to Last: Successful Habits of Visionary Companies".

 

What BHAG does ?

BHAG provides
 - Visionary goals which are strategic and Emotionally/mentally demanding
 - Goals to be achieved in the Long term (period of 10-30 years)
 - the platform by which an organisation can transcend itself to a new level
 - a platform by which you can be an Industry Leader, because your organisation planning is long term and you are miles-ahead of the rest of the industry players

 

There can be multiple BHAGs in an Organisation. Because we speak about a range of years say 10-30 , we can even have short term BHAGs and long term BHAGs.

 

Examples of BHAG:

1. Microsoft changing the digital world by introducing Personal Computers. Every house has a PC and even offices which used to have only mainframe systems , moved to PC. EVery place is with a computer.

2. NASA's mision on Mars Exploration since 1960  

3. Google organising the information all over world and make it accessible to all (eg: Courtesy wikipedia) . More often than not, we say "Google" it to find something, rather than saying, search it in Google. Thats the influence, Google has achieved , because of its audacious goal.

 

Having talked about BHAG, let me discuss on how BHAG can be used in driving Black Belt projects.  Here is my take on this. Strongly believe that in a company where Six Sigma culture is not there and if the top brass are Process-Oriented, then BHAG is a great choice. I will correlate here SMART can be applied to BHAG. Imagine now you define that you plan to have a short term BHAG(Say 10 years) for your IT company. In this 10 years, you want 300 Black Belt projects to be done (just for sake of discussion.. Anyways - does it sound Questionable for you? If yes, then that is BHAG- as you are external :-)  ).  Will expand SMART in BHAG's context

 

1. Specific:  Just for instance - You can suggest how many BB projects to be completed in a year, how many to be started in a quarter, how much minimal value savings you should showcase....such quantifiable needs can be put. This is just only a sample.

2. Measurable: This talks about the measuring techniques. In this context, if we are saying 30 projects / year and across multiple verticals(read sectors) such as Health, Insurance, Banking, Retail, Manufacturing, Automobile, then say we need to take data for 5 projects to be measured across 6 verticals

3. Achievable/Attainable: The goal of 5BBs/vertical per year, should be realistic. If we look at the definition of BHAG, it is likely to be questioned by external parties and not within the organisation which implies the fact this can be achievable. May be a bit of stretching might be required due to nature of the activity, in my opinion.    

4. Relevant: This will say about alignment with other business goals (Say another short term BHAG which talks about creating 100 MBBs in 10 years- just an example)  

5. Time-bound: All BB projects to complete between 6-10 years and the whole goal to be completed on say, May 29th 2028.

 

As we had seen here, even though BHAG seems to be unachievable, it could be only an external perception. A company would know the strength and weakness of its workforce and would be the best judge to decide what can be a good BHAG for itself. I portrayed two short term BHAGs that could have been a subset of one long term BHAG as well.

 

Conclusion: Every company may not have a BHAG. But companies that successfully implement BHAG can or probably will become pioneers in their industries, though it would be emotionally demanding for the employees of those companies. For Companies, which do not have an inherent quality or Six Sigma culture and if that company is a big-sized one, then probably i feel BHAG has the potential to turn the company from a rookie to an expert process-oriented organisation and storm through the ladder and go up, in its industry. For companies which are having some BB projects, here and there , but require more BBs and MBBs, then having a short team BHAG related to Six Sigma can be driven , but the short term BHAG can be linked to a long term BHAG related to something like Business Process Modernisation.

 

Benchmark Six Sigma Expert View by Venugopal R

 

BHAG is no doubt a vision for a long-term, usually ten-plus years. It is a transformation goal and aims to position the organization for a revolutionary change. The guideline for Black Belt projects is to have a SMART goal and Black Belt projects need to get completed at the maximum within a few month's time. The strategic element of Six Sigma calls for annual goal setting and deployment of goals to identify the need and opportunities to improve, re-design or newly design processes. The famous approaches viz. DMAIC, DMADV and DFSS are popular methodologies that guide the teams towards executing such projects. While deciding the annual goals for an organization, the senior leadership would consider the BHAG vision and ensure that the annual goals are aligned to steer the organization towards BHAG goals. It then translates to more specific objectives that could be chartered as BlackBelt projects. Thus the Black Belt projects would certainly serve as a vehicle to provide substantial traction to steer the organization towards the BHAG, provided the senior leadership makes use of the Six Sigma organization effectively. However, the Black Belt projects alone may not be sufficient to fulfill the aspiration of BHAG. It will certainly need emphasis on strategic fortitude using tools and methodologies applying creativity and and innovation as well.

BHAG for me is always staying ahead of the curve.

 

Competition will be there always the best situation is keeping a mile distance under same operating circumstances and setting new benchmarks.

 

Example 

If a safety standard is applicable at present to a product and keeping one product at a higher level safety standard is a BHAG.

 

Keeping goal to achieve productivity as 100% is ok as following standard operating conditions.

 

But keeping is as say 110% will be a BHAG. Now from where this extra 10% will come is challenging and sets the ball rolling in direction beyond set parameters or SOPs and venture into area of Lean. 

 

Cut down losses 

Simplify processes 

Sustain the learning

Benchmark new horizons 

Set new role models

 

All come into picture

 

And believe the taste of success of achieving beyond 100% is altogether different.

 

 

 

BHAG - as the name suggests, is an audacious goal for an organization whereas goals should be SMART. BHAG differs from SMART in terms of A and R i.e. Achievable and Relevant. BHAG will be Specific so that it is understood by all in the organization, Measurable so that the organization can validate whether it has met it or not and Timebound (say in another 10 years). However, it might not seem to be Achievable to some, even though the organization strongly believes otherwise. At times, it might also be irrelevant simply because it is audacious or if it something that changes the industry landscape. 

 

Answer provided by Venugopal Sudheendra highlights these aspects in the answer and hence has been selected as the best answer.