Importance of SMART goals, Stretch Goals (BHAGs) and KU Model: Business Lessons from Charles Duhigg, Jack Welch, Donald Rumsfeld and Socrates

Do we need to define goals in a SMART way as specific, measurable, achievable, relevant, and time-bound or do we need to define them in a big hairy audacious way? Damned if you do and damned if you don't. These kind of catch 22 situations will face you certainly if you are either looking for greatness or if you at the very extreme if you are looking for immortality in business and in life. Some of the immortals of the business world have spoken about these things in many places. In academics, I think we speak too much about SMART goals and their theories than talk about BHAGs or Big hairy audacious goals which kind of look unrealistic to the observers.

According to Charles Duhigg's book "Smarter Faster Better" Jack Welch who is one of my business heroes too (I was impressed once I read "Jack: straight from the gut", his biography) used to demand that General Electric (GE)'s executives followed SMART goals but also emphasized on stretching their goals to BHAGs. This was done after he learnt that SMART goals were making people complacent about their work goals and that was simply not good enough for GE and its' game changer CEO Welch. The actual explanation used by Duhigg was that SMART goals was encouraging the executives towards a psychological bias called cognitive closure (individuals’ desire for a firm answer to a question and an aversion toward ambiguity). This is was counter-productive to businesses like GE because when faced with heightened ambiguity or unknown unknowns as discussed in last article and a lack of known answers, individuals need to know the answer as quickly as possible. This could lead to worse mistakes in business decisions than correct ones. Thus Welch and GE encouraged both SMART and stretch goals or BHAGs. Duhigg further emphasizes on how that happened in Yom Kippur war which was explained in my last article how how ambiguity or unknown unknowns was avoided. Thus Israeli intelligence adopted the strategy of the Unknown knowns or biased thinking in cognitive closure which led to massive losses in Yom Kippur war.

Same thing happened in the Iraq war after 9/11 when America attacked Iraq without credible intelligence about whether Iraq and Saddam Hussain had weapons of mass destruction. It was proven later that Iraq had none and the war was done with a falsified information about them having weapons of mass destruction. Later Donald Rumsfeld the secretary of defense then popularized this Known Unknown (KU) model by giving an interview to journalists saying that US had been let down by the unknown unknowns.

What should we as humans and as businesses learn from this jumbled of mess of known knowns, known unknowns, unknown knowns and unknown unknowns then? Or is this just a jargon that should be forgotten because it leads nowhere?

My take on this KU model and also regarding whether SMART goals or BHAGs or both should be adopted by individuals and businesses is that take it in perspective from the KU model and your life or your business might elevate to immortality. Most of the human population or businesses are failingly and constantly involved only in the Known known domain (the comfort zone of living as I would like to say). Lots of these humans and businesses cross over to think about the unknown knowns or being trapped by psychological biases that makes their life and their decisions worse and cause their ultimate failure. Very less people reach greatness by adopting the known unknowns or being aware about the actual situation of life or businesses. They normally ask questions in the right way to get into the right answers and become great for that reason. But immortality of individuals or businesses now that lies and only lies in the domain of Unknown unknowns and thinking that there are answers that we currently don't know but we will embrace the uncertainty and the answers will appear in their own time as we make efforts. People like Socrates, Galileo, Einstein and Buddha are still immortal after thousands of years of existence. Why? Socrates decided to embrace the uncertainty of death than exile, Galileo questioned who indeed will set bounds to human ingenuity and supported that Earth revolved the Sun even when everyone ostracized him, Einstein challenged Neutonian physics which had never been questioned in almost 400 years and Buddha challenged the notion of suffering and death when everyone was trying to escape it. These people decided to embrace the unknown unknown and from there came immortality. Same with businesses as well and the evidence is everywhere about the immortal businesses around us.

My final conclusion is that we should both embrace BHAGs and SMART goals but with eye on the unknown unknown too asking ourselves "what if I am wrong?. A better statement would be "All I know is that I know nothing" as asserted by the pillar of western thought process Socrates when it was told he was the most intelligent person in the world. We here at Voyage ride believe that our duty towards humanity is towards making individuals and businesses aware that they have been living in a narrow boundaries of "known knowns, known unknowns and Unknown knowns". Let's transcend boundaries of human existence with us by embracing the Unknown unknown as our slogan says "Serendipity guaranteed".