The Power of a Big, Hairy, Audacious Goal: How to Choose Yours
Over the years, I’ve identified five types of goals that successful companies use to set their long-term direction.
I’ve worked with countless companies on setting bold, long-term strategies, and one thing remains true: The best businesses know exactly where they’re headed. And as a former founder and CEO who scaled a company onto the Inc. 500 list multiple times, I’ve seen firsthand how a big, hairy, audacious goal (BHAG) creates clarity, alignment, and momentum.
A great BHAG isn’t about finding the perfect goal—it’s about choosing a compelling one and getting everyone moving in the same direction. If half your team is climbing one mountain while the other half is climbing another, you won’t reach the summit. Over the years, I’ve identified five types of BHAGs that successful companies use to set their long-term direction.
1. Quantitative BHAGs: The number-driven target
A quantitative BHAG focuses on achieving a specific, measurable milestone. These goals work well when a company wants to define success in clear numerical terms—revenue, market share, or operational scale. The advantage of this type of BHAG is that it removes ambiguity, giving teams a direct and focused target to chase.
Examples: A company may set a goal to become a $1 billion company by 2030, forcing it to rethink its growth model, acquisitions, and customer expansion strategy. Another example is capturing 50 percent of the electric scooter market within 10 years, requiring dominance in distribution, brand recognition, and supply chain efficiency. A SaaS business could commit to serving one million paying customers worldwide, driving product development and customer retention innovation.
2. Qualitative BHAGs: The reputation or market position
Not every BHAG is tied to numbers. A qualitative BHAG focuses on brand identity, reputation, or cultural impact. Companies that adopt this type of BHAG are driven by purpose and reputation. This works especially well for mission-driven businesses or industries in which trust and credibility are paramount.
Examples: To lead the market, a fashion brand aiming to become the most respected name in sustainable clothing must rethink its supply chain, materials, and branding strategy. A nonprofit could set a BHAG to eradicate hunger in its community, aligning fundraising, partnerships, and distribution to maximize impact. A technology company might declare its ambition to be the leader in ethical AI, ensuring that all its product decisions reinforce transparency, fairness, and responsible innovation.
3. Competitive BHAGs: Taking on an industry giant
Some companies thrive on a direct competitive challenge. This type of BHAG aims to overtake or outperform a major rival. It’s a rallying cry that unites teams and creates urgency by defining success in relation to another player. A well-executed competitive BHAG forces a company to sharpen its strengths and relentlessly push innovation to close the gap or take the lead.
Examples: Nike’s legendary BHAG in its early days was simple—Crush Adidas. This mindset drove aggressive product innovation, marketing, and sponsorship deals that changed the sports apparel industry. A fintech startup could set a goal to outpace PayPal in transaction volume within a decade, requiring a focus on customer trust, seamless user experience, and strategic global expansion. A newer social media platform could commit to surpassing TikTok in engagement among Gen-Z users, meaning it would need to build cutting-edge features and community-driven interactions.
4. Role model BHAGs: Emulating the best
Some companies look outside their industry for inspiration instead of focusing on internal goals or competitors. A role model BHAG is about applying a successful approach from another business category to your field. This approach works well when an organization sees a proven model that aligns with its vision and adapts it to its specific strengths.
Examples: A fitness technology startup might aim to become the Apple of home fitness technology, focusing on sleek design, seamless software integration, and a high-end customer experience. An airline might strive to be the Southwest Airlines of private aviation, bringing cost-effective and efficient air travel to a new market through innovative pricing and streamlined operations. A B2B consulting firm could set a BHAG to become the McKinsey of the small-business sector, ensuring world-class strategy services are accessible to growing companies.
5. Transformational BHAGs: The caterpillar-to-butterfly
This BHAG is for companies that need a fundamental reinvention. When an industry is shifting rapidly, businesses that successfully redefine themselves before they’re forced to do so win the future. A transformational BHAG is about becoming something new, leveraging an existing core strength to move into a different space. The defining characteristic is that once the shift happens, the company, as it existed before, is effectively gone.
Examples: Merck transitioned from a petroleum company to a pharmaceutical leader, capitalizing on its chemistry expertise to enter a vastly different industry. IBM evolved from a hardware manufacturer to a cloud and AI powerhouse, completely reshaping its workforce, product focus, and brand identity. Netflix transformed from a DVD rental-by-mail business into the world’s leading online streaming service, requiring a complete overhaul of its business model, technology infrastructure, and content strategy.
The most important step in setting a BHAG is picking one. A company that debates endlessly and fails to commit ends up stuck in strategic limbo. The right BHAG doesn’t need to be perfect—it must be bold, clear, and inspiring enough to align and motivate the entire organization. The companies that execute best aren’t those that choose the “right” BHAG but those that rally behind a clear vision and pursue it relentlessly.
