First BHAG™ then 3HAG

More Goals? Yes, more Goals!

If you thought that this article title sounded like a chapter title from one of Jim Collins' books then you would be right, that was very much my intent.

Jim Collins revolutionised how we think about business and introduced the concept of the Big Hairy Audacious Goal (a BHAG™) in his 1994 book "Built to Last". Jim described a BHAG™as "a clear and compelling goal that serves as a unifying focal point of effort - often creating immense team spirit". A company's BHAG™ should be inspiring, long term, almost unachievable and yet inspire the team to greatness.

Many companies now have BHAGs™(some are better than others) but for many, the path to achieving the BHAG™is not clear. It might show the team which mountain to climb but it doesn't show which track to take or the best strategy to get there. In short, BHAGs™ are invaluable, but they are not enough. You need something that shows the path towards your BHAG in incremental, evolutionary steps and that is where the 3HAG comes in.

Shannon Susko captured the details of the 3HAG (3 year Highly Achievable Goal) in her book "The 3HAG Way" and she describes a 3HAG as where the long term and the short term meet. If a BHAG is inspirational and almost impossible to achieve, then the 3HAG is more real. It is Highly Achievable and gives you a definite target to aim for when you set out your plan. So, you need both. The BHAG sets out the long term, 10 to 30 year goal that is where you aim for whereas the 3HAG is medium term goal that you can plan for and start you execution journey right now.

Test Questions for BHAGS

 
But why 3 years and not 5 years? The real answer to this is that we are looking for a compromise between strategic clarity and execution stability, A 5-year plan might be easier to write than a 3 year plan but it is really just a guess. 5 years is just too long whereas you can almost reach out and touch 3 years out from now. Three years is only 36 months or 12 quarters out and as we reset our 3HAG every year, our strategy is never out of date.

So What is a 3HAG?

A 3HAG is made up of the following components

Our 3HAG Statement

A statement or sentence that describes our company in 3 years time - with no numbers.

Fiscal Numbers and/or Measures

What do we want our fiscal numbers/measures to be in 3 years time. This could be Revenue, Operating Costs, Profit and Cash in the Bank

Our "Widgets"

How many "Widgets" will we have to sell in order to achieve the fiscal numbers/measures we defined above. This might be units sold or new/cumulative customers.

3 - 5 Key Capabilities

What are the 3 - 5 Key Capabilities we will need in place to deliver on these 3HAG goals. These are the critical organisation capabilities that position you where your 3HAG can be achieved.

What do we want to be known for?

Finally, what do we want to be known for in 3 years time. What will our core customers say about us in 3 years time?

Here is an example that has been anonymised.

How final is a 3HAG?

When we work with our clients, we work very fast and very much follow the approach that perfection is the enemy of done. We "gut out" a 3HAG with our clients in just a few hours and ask for agreement from the leadership team that the 3HAG is "good enough for now". That is OK as we will be refining and iterating our 3HAG as we go.

Another thing to bear in mind is that as we redefine our 3HAG every year it is never more than 12 months old. In 12 months time, we create a new 3HAG and our 3HAG from last year becomes our 2HAG and our 2HAG from last year becomes our 1HAG. We roll it forward so our 3HAG, our strategy and our 1 year and quarterly execution plan is always up to date.

Whats next?

So now you know what a 3HAG is and how it fits with a BHAG; I'll cover off other aspects of the 3HAG method in my subsequent posts.

Interested in finding out more or need a Certified 3HAG coach to show you how to implement 3HAG, give me a call on +61 415 534239 or mail me at predictablegrowth@crystalyzer.com.

 

Posted by : ged | On Sunday, 12 January 2020 | Modified On Sunday, 12 January 2020


 

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We are based in Sydney, New South Wales, Australia and we work primarily in Greater Sydney but are also open to working with clients from Forster, Newcastle, the Blue Mountains and down to Wollongong. We also work with clients across all of Australia and the Asia Pacific region, specifically in Bali, Indonesia.  If you would like to find out more about the work we do and the results we achieve, please contact us at hi@crystalyzer.com or call us on +61 415 534239.

 

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