North Star, BHAG, MTP? WTF?

In 1994, Jim Collins and Jerry I. Porras wrote a book called Built to Last: Successful Habits of Visionary Companies. Collins and Porras describe the importance of setting ambitious goals. They called them BHAGs: big, hairy, audacious – likely to be externally questionable – goals. A BHAG is visionary, clear, compelling, and (over) ambitious. It leads a company out of its comfort zone towards accomplishing the impossible. A BHAG is meant to be inspiring and provide direction.

In recent years BHAG’s have gotten new names such as North Star (an especially popular term among startups and scale-ups) and Massive Transformative Purpose, a term coined by the Singularity University and their book ‘Exponential Organizations’.

While North Star and BHAG are essentially the same, a Massive Transformative Purpose is really different, in the sense that BHAG’s and North Stars tent to be rather self-centered. They are about the organization and what it wants to achieve. In most cases just for itself. A massive transformative purpose is all about what the organization wants to change in this world. For its stakeholders, clients, society, et cetera. It is much more outward-looking and much more about the contribution of the organization to the outside world.

Different types of BHAG’s

There are four basic types of BHAGs to use as basis for your own organization.

  1. You can be very specific about a target you would like to achieve. Preferably a target that is really challenging and is almost beyond reach.
  2. Or, you can go for the common enemy, the one competitor to beat. Like Nike did in their early years with “Crush Adidas.”
  3. Sometimes companies refer to a specific role-model company. The one company that they would like to become; one, for example, that excels in service like Zappos, the American online shoe retailer.
  4. And the last type of BHAG is the one that refers to an internal transformation like Netflix has done in the recent past from selling DVDs to streaming video. By the way, they have now adopted a role model/target BHAG of: “We want to entertain everyone and make the world smile.” Netflix tries to fulfill its promise to the world by providing better entertainment, at a lower cost and greater scale than the world has ever seen.

One of our favorite target BHAGs is the one John F. Kennedy announced during his speech for the American Congress on the 25th of May 1961. The Cold War was at its height when he made a promise to the people of the United States and the world to send a man to the moon and safely back within a decade. At that time there was no technology available to actually make this happen. There was no powerful rocket system, no fueling technology, no heat shield to be able to return to Earth through the atmosphere… And we all know what happened. On the 20th of July 1969, only eight years later, Neil Armstrong spoke the famous words: “That’s one small step for man, one giant leap for mankind.”

Now this example might seem a bit over the top, but it sure demonstrates that anything can happen in ten years; even the most unlikely bold ideas can come true. And that was at the pace of change of over 60 years ago.

Why should I even have a BHAG, North Star or MTP?

Setting ambitious goals is very important in the process of creating an ambitious growth strategy. It serves the purpose of having a clear direction in which to go. A clear finish line that people, like it or not, would like to shoot for. It is aspirational. It helps to bring focus to your growth plays. A yardstick for decisions, it unifies and aligns people to give them some sense of urgency for making the necessary change happen. Furthermore, it could create a powerful pull as a recruiter for talent and attractor and retainer for the ecosystem it tries to achieve.

Now, you may ask yourself: “Should I be the next Apple, Uber, John F. Kennedy, or <place your own role model here>?” Maybe not. Maybe you still have a very long shelf life being the company you are, in the business and market you are in. Surely, your ambition should be placed in context. So, how ambitious should you be? At the very least, you should strive for retaining relevance. Customers very quickly sniff out the weaker players in an industry. They are consuming relevance. Same holds for the question of being a leader or a follower; it’s up to you! However, if you are a follower, who do you follow? It matters!

OK, but how to define my BHAG or North Star?

At RevelX we are often asked to help our clients find their BHAG or North Star and we have developed a very practical approach to this relevant question. In our BHAG game we ask a relevant group of people in our customers’ organization to ask three simple questions:

  1. What are our core values?
  2. What can you be best in the world at?
  3. What drives your economic engine?

At the intersection of the answers to these three basic questions, we always find our customers BHAG, or their North Star.
Adding the question of ‘What would you like to change in this world’ or ‘What causes your frustration over and over again’ and inclusion of the answers to the above could even help you to take your BHAG or North Star to the next level and make it a truly Massive Transformative Purpose.