If You Have Big Dreams, You Do Big Things
In their 1996 Harvard Business Review article, Jim Collins and Jerry Porras discussed the importance of a well articulated vision to providing focus, clarity and a framework within which a company and its people can work most effectively. It’s been a decade since they introduced us to the concept of a BHAG (Big Hairy Audacious Goal) as an essential part of a corporate vision. A BHAG is an ambitious goal that typically takes 10-30 years to complete. These plans are so ambitious that the person hearing it for the first time tends to give a sigh of amazement at its audacity. Case studies are made of those who have audacious goals and become mighty corporations. But what happens to those companies after they’ve achieved their BHAGs?
Sixty years ago, Sony set out to do something that, at the time, seemed amazing. They painted a vivid picture of the future they envisioned:
- We will create products that become pervasive around the world
- We will be the first Japanese company to go into the American market and distribute directly
- We will succeed with innovations like the transistor radio that American companies have failed at
- Fifty years from now, our brand-name will be as well known as any on Earth and will signify innovation and quality that rivals the most innovative companies anywhere
- “Made in Japan” will mean something fine, not shoddy
What’s astounding is that Sony accomplished everything they set out to. These audacious goals gave every employee a context. They guided how resources were allocated. As a result, an entire corporation operated as a single, focused force. But now what? Since achieving their goal Sony has struggled to redefine itself. Their website says they are “a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets.” Not very inspiring.
Sony is not alone. 100 years ago, the Ford Motor Company set out to “democratize the automobile.” And they’ve done it. The idea of democratization was a powerful force. In fact, the same ideal propelled Southwest Airlines and Wal-Mart to dominate their categories too. But absent a theme for the next 100 years, Ford is planning 30,000 layoffs and has offered only a vague picture of the future. Their current vision statement, “To become the world's leading consumer company for automotive products and services,” is generic and provides no roadmap to achieve anything.
AOL is in the same boat. A company that accomplished its goal of “building a global medium as central to people's lives as the telephone or television...and even more valuable” in just 20 years, now needs a new purpose. The same customers to whom it introduced the internet, now abandon them at a rate of over 2 million customers per year. Worse, analysts are looking at ways to dissect the company, finding more value in the pieces than in the whole. Like the other examples, AOL needs a new vision so it can stop talking about their BHAG in the past tense.
Even If You’re Big, Act Like You’re Small
There is another thing that Sony, Ford and AOL have in common – when they first articulated their BHAGs they were all small. What Akio Morita, Henry Ford and Steve Case lacked in resources, they made up for in ambition, vision and drive. Though some may argue that success breeds complacency, what is more apparent is that great success can cloud vision. Without something to believe in, why should employees come to work? What should executives use as their compass? And why should customers care?
When they started, Sony, AOL and Ford were fixated on their long-term goals. But now, lack of clarity about where they are going has lead to regular restructuring and bending to the whims of Wall Street. To regain their focus, these companies need to state, in clear and simple terms, what they want to achieve in the next 10-30 years.
With their visions rearticulated, management needs to fill the company with people committed to helping them achieve their long term goals and remove those who don’t. Employees should be encouraged to develop ideas that advance the cause (even if some of them fail) and discouraged from being focused only on the next quarter.
We’re not criticizing these companies because we want to point out their failings. They've all achieved remarkable things and we’re rooting for them to do it again.