10 Reasons A BHAG Really Matters, Policies vs Values & How to Create Company Values That Actually Resonate
12 November 2023 Newsletter
“The ship is safest when it is in port, but that’s not what ships were built for.” – Paulo Coelho
Hope you’re Thriving!
It’s been a productive week full of meetings.
Following on from my article about the five types of BHAGs from a couple of weeks ago, at one of these meetings we spoke about BHAGs, and in particular Vanity BHAGs.
Vanity BHAGs are probably an expense in your financials and not connected to your making money and living your core purpose. For example, if you asked a tradesperson their BHAG and they replied, “100 trucks!” – that’s probably a vanity BHAG. Trucks are an expense. You could borrow money from a bank to buy 100 trucks next month. On the other hand, 100 trucks at a $50 per hour profit average for a year probably isn’t a vanity BHAG. Because if you’re a for-profit business, achieving your BHAG should ensure you make a profit.
10 Reasons A BHAG Really Matters
And yet, one key question kept coming up: “Why should I have a Big Hairy Audacious Goal?”
The concept of a Big Hairy Audacious Goal, or BHAG (pronounced bee-hag), was popularized by Jim Collins and Jerry Porras in their book “Built to Last: Successful Habits of Visionary Companies.” A BHAG is a 10 to 30-year goal meant to inspire and guide an organisation. It should be bold, compelling, and challenging, serving as a unifying focal point for better and faster decisions.
As you stand at the age of 40, envisioning your retirement at 65, there are only 25 annual planning sessions left. Having that “North Star” to be able to make better and faster decisions becomes critical.
In our work with leadership teams, we have seen additional benefits of having a Big Hairy Audacious Goal. Click the article below to read the top ten benefits.
Let’s review the top 10.
Continue reading this article on our website: 10 Reasons A BHAG Really Matters
Policies vs Values
How does a company build a set of operating procedures?
Most likely, it’s borne of pain. A mistake is made, someone says this can never happen again, and a policy or procedure is written to prevent it from happening again.
In one episode of The Growth Whisperers, we even discussed Why SOPs and building procedure manuals can be a waste of time, but if policies are borne of pain, what results is organisational scar tissue.
The problem with policies is that they compound, with well-meaning people adding a new policy or expanding an existing one every time a mistake happens. This leads to the bureaucracy that everyone says they hate.
And the scar tissue builds upon itself, and the organisation can’t be as agile or nimble as it once was.
Instead of writing a policy, consider whether the person who made a mistake, made a decision that wasn’t aligned with the values or behaviours of the organisation. For when everyone understands the values and behaviours, the principles of decision-making are clear. There should be fewer mistakes and less bureaucracy.
A free and fun company to work at is one where people are trusted to make good judgment calls in the best interests of the company. On the other hand, scar tissue will only slow you down.
How to Create Company Values That Actually Resonate
This week, I came across an article that espouses the importance of values and how to get them to resonate with team members.
Now, I freely admit that some parts I agreed with and others I didn’t.
For example, I’ve been in meetings where leaders try to find a core value that begins with the letter C because they are trying to spell out an acronym. “Let’s use Caring”, an executive might propose because then they can spell an acronym that connects to their line of business, like a food manufacturer trying to spell RECIPE.
Is “Caring” then really something that the leadership would fire someone if they breached or take a hit to profit to maintain the integrity of the Core Value? For they are the values that are genuinely ‘core’.
It seems the authors of this article are fans of acronym core values, which I find inauthentic. Sceptical employees might comment, “You selected these values not because they are your deeply held beliefs but because they spell a word!”.
The authors propose five tips for creating core values that can pique interest, roll off the tongue, please the eye, accentuate what’s important, and sharply resonate with the company’s identity. As you’ll see below, I don’t agree with all of them!
1. Be Creative – rather than calling them Core Values, call them something like credo, truth, belief or principles because it’s novel and therefore stimulating to the brain (Disagree).
2. Keep Them Brief – no more than four (Agree). Omit values that can be assumed of all decent people (Disagree). Core values are best used as a statement of what is exciting, critical, or inspirational for your company (Disagree).
3. Make Them Easy to Remember – the order of your values can support memory through an acronym (Disagree; see above).
4. Use Distinctive Language – enliven your core values with language that is anything but dull and impersonal. E.g. rather than ‘accountable’, use ‘we own it’ (Agree).
5. Make It Visible – people remember images better than words. Tap this insight by communicating your values through a company-relevant emblem. A car maker, for example, may have a “values wheel,” where the spokes are the words of the core values shooting out from a common core (Agree).
Read the article here: How to Create Company Values That Actually Resonate