The plague of strategic goals?

How an audacious strategic goal can crush a great company

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Jim Collins, the author of Built To Last: Successful Habits of Visionary Companies, coined the term BHAG, Big Hairy Audacious Goal, thirty years ago, in 1994.?

His intentions were good, so he had no idea how much damage he caused.

We love bold goals. We call them ‘North Stars’ and ‘Moonshots.’ We believe they can help us stretch our imagination and push beyond possibility.

Setting a bold goal has its (questionable) advantages. But we shouldn’t forget about the three points that reflect the dark side of big goals:

1. We don’t know the future?
2. A ‘North Star’ can pave us the way to dead ends
3. Setting BHAGs biases our strategic thinking (yes, it’s true)

We don’t know the future

When we set a bold goal for our business, two possible premises may fuel our enthusiasm:?

1. We believe we know the future – or at least we can predict it accurately.?
2. We think it will make our team change their thinking, stretch their imagination, and push beyond possibility.?

The first one is entirely wrong. The future is unpredictable, and our ability to anticipate it is very limited. Even the most prominent companies with the best analysts can’t make accurate projections.?

And the idea that our big aspirations can change the material world is an excellent example of ‘magical thinking .’?

Quote: “Magical thinking is the belief that one’s ideas, thoughts, actions, words, or use of symbols can influence the course of events in the material world.”?

No strong evidence exists that ‘magical strategic thinking’ can help build a great business.

What’s more, big, audacious targets can blind us.

Typewriters and bold goals

Imagine it’s the 1970s. A CEO of a company that manufactures typewriters sets a BHAG – to double sales in three years. The market is booming. Some guys are soldering homemade computers in garages, but no one is paying attention to them – so far.

What are the chances that the CEO will recognize the threat and change the strategy? They are slim – he has a BHAG.

A goal isn’t just a number. It’s a commitment.?

It narrows down our thinking – that’s what goals are for.?

Moreover, setting lofty goals biases our strategic thinking.

Goals and assets

“Strategy is a means to an end.”?

You may have heard it many times.?

I believe it is a totally bankrupt management concept. I’ve written about it in detail?here .?

Our thoughts determine the words we use. And vice versa, the words we use affect our thinking. It is called the ‘misinformation effect’ or ‘framing effect.’?

When we call something a ‘goal,’ we turn everything else into ‘assets,’ a means to an end.?

We turn our customers, employees, suppliers, and business partners into resources to achieve our goals. We signal our team to use them to make us rich.?

But doing business?means ?treating all the stakeholders equally.?

Goodharth’s law?says : “When a measure becomes a target, it ceases to be a good measure.”?