How a BHAG Helps Your Leadership Team Make Better Decisions

One thing I have learned from working with business owners and leadership teams is that very few long-range plans unfold exactly as expected.

Markets change. Customers change. Technology changes. New opportunities appear. Key people join or leave. Something that looked important twelve months ago can become far less important today.

A growing business has to adapt.

The challenge is knowing what can change without losing sight of where the business is going.

That is one of the most practical reasons for establishing a BHAG.

A BHAG gives today’s decisions a destination.

Your Plan and Your Destination Serve Different Purposes

A BHAG describes the future you are working to create over the long term. I often describe it as your Beacon on the Hill.

You can see where you are going even when the route changes.

Your plan serves a different purpose. It describes how you intend to move toward that future from where you are today.

As conditions change, parts of that plan will change with them.

A new opportunity may deserve attention. A strategy that made sense two years ago may need to evolve. An annual priority may become less important. A quarterly priority may change because the assumptions behind it have changed.

Those adjustments are part of running and growing a business.

The question is whether the leadership team still has a clear picture of their Beacon on the Hill.

Without that shared picture, changes in the plan can begin to look like changes in direction.

Growth Gives Your Leadership Team More Choices

As a business grows, leadership teams rarely lack things they could pursue.

There are new markets, products, partnerships, acquisitions, technology investments, hires and customer opportunities.

Many of them can look attractive.

The leadership challenge becomes deciding which opportunities deserve the company’s attention, people and resources.

Imagine that your leadership team is considering two opportunities.

Both could generate growth. Both have credible business cases. Both require meaningful investment.

How do you choose?

The financial case matters. Capacity matters. Risk matters. Strategic fit matters.

Your long-term destination adds another important piece of context:

Which opportunity moves us closer to the business we are trying to build?

The answer helps the leadership team separate a good opportunity from the right opportunity for the business they are building.

An opportunity can be attractive on its own and still take the company in a direction you have not chosen.

A clear BHAG gives the leadership team a shared reference point for making that decision.

When the Destination Lives Only With the CEO

This becomes increasingly important as the company grows.

In many businesses, the CEO has a clear picture of the future. They know what they are trying to build. They understand why one opportunity fits and another does not. They can see connections between decisions that may be difficult for other people to see.

The issue is that much of that context still lives with the CEO.

A leader brings forward an opportunity, and the CEO provides the missing context.

A priority needs to change, and the CEO explains how it affects the longer-term direction.

Two departments have competing needs, and the CEO becomes the person connecting the decision to the bigger picture.

The leadership team may be highly capable. They are making decisions with less context than the CEO has.

A shared BHAG helps transfer some of that context to the leadership team.

Leaders can begin asking the same question the CEO has been asking:

Does this move us toward the future we have agreed to build?

That gives people more than a long-term goal. It gives them a reference point for judgement.

For a CEO trying to build leadership capacity and create greater personal freedom, that shared context becomes increasingly valuable. More decisions can be made by capable leaders without every decision returning to the CEO.

A Practical BHAG Exercise for Your Leadership Team

There is a straightforward way to test whether your BHAG is influencing the way the business operates today.

Put your BHAG at the top of a page.

Underneath it, list the five most important priorities your leadership team is working on right now.

Take each priority individually and ask:

How does this priority move us toward the future we have described?

Do not settle for a vague connection.

Ask what will be different about the business if the priority succeeds.

What capability will you have built?

What will be different for your customers?

What will your leadership team be able to do that it cannot do today?

How will the business be closer to the future described by the BHAG?

Some priorities will connect immediately.

Others may lead to a useful leadership discussion.

You may discover that a priority is important for maintaining the business today even though its connection to the longer-term destination is indirect. That can still be a valid reason to pursue it.

You may also find a priority consuming significant leadership attention that nobody can clearly connect to the future you are building.

That is valuable information.

Does Your Leadership Team See the Same Beacon on the Hill?

There is another useful test.

Ask each member of your leadership team:

If we achieve our BHAG, what will be different about this company?

Then listen carefully to the answers.

Are they describing roughly the same future?

Do they see the same customers, capabilities, market position, culture and organization?

Or does each person have a different picture?

A BHAG written on a page has limited value if the leadership team interprets the destination differently.

The goal is shared clarity about where the business is going.

That shared clarity gives leaders context for the decisions they are making today.

The Route Will Change

Ten years is a long time in business.

You will learn things you do not know today. New opportunities will emerge. Assumptions will change. Your leadership team will make decisions based on information that does not exist yet.

Your route will evolve.

Your Beacon on the Hill gives the leadership team something against which those changes can be tested.

The company can adapt while keeping the destination clear.

And as more of that context becomes shared across the leadership team, the CEO does not have to personally connect every decision back to the future.

That is when a long-term goal becomes a practical leadership tool today.

A BHAG gives today’s decisions a destination.

How clear is the destination to your leadership team?

The Leadership Clarity Index helps you identify where clarity and alignment are strong across your leadership foundation and where there may be gaps worth exploring.

Invest 10 minutes and get a clearer picture of where your leadership team stands today.

Complete the Leadership Clarity Index

Here is to building the future you envision.

Keith