Can the setting of a big, challenging, long-term goal breed creativity and innovation, or do quality creative solutions need to be managed more tightly than that?

The term ‘big hairy audacious goal’ (BHAGs) discussed by Jim Collins in his book ‘Built to Last’ and coined by Collins and Jerry Porras in the 1996 article ‘Building Your Company’s Vision’, refers to defining aspirational, future-facing, and compelling goals for your company. Goals that rally and drive team spirit, and that stretch the company towards a change that it is not sure it can make; goals that set out where the company wants to be in 10-to-30-years time.

This, as Jo Confino of the Guardian sustainability blog points out, is a radical move for most companies whose current targets are set around small, incremental change and improvement, or as he brilliantly puts it ‘creating targets that they know are already in the bag’.

The case for big, hairy and audacious
In a recent discussion with Ramon Arratia about performativity and innovation, he remarked that for innovation to bloom in an organization, each of its members must know the goal of the whole system and be on board with the journey. Accordingly he suggested that companies should set large, audacious, and forward-looking goals at system level, goals that staff and partners are encouraged to solve in their own way. This he believes will breed creativity and innovation answers.

Ramon pointed me to Donella Meadows’ ‘12 places to intervene in the system’ and highlighted that challenging the ‘goals of the system’, will gain the most leverage for a business to change. This means making sure that you insert the best goals into the business system to inspire creative solutions and change. This, as opposed to tackling the ‘parameters, constants and numbers’ of the system, as the use of micro-metrics distract from the bigger system picture and dissuade risk-taking and experimentation.

Louise Marsden from NESTA concurs that a collectively backed ‘ultimate goal’ to aim towards, not only encourages creative thought, but also helps people assess whether their idea is of potential value to the goal and the company. She exemplifies Unilever as an example of a company who has bred a culture of innovation and moved to the use of more radical processes in response to their newly set BHAG. When setting these goals, they realised that their tried and tested techniques for innovation would not bring the huge leaps required to hit the targets. Instead, they would have to embark on some game shifting tactics.

These suggestions are in line with the studies of Deci, Ryan and their contemporaries on extrinsic (externally imposed) and intrinsic (naturally occurring) motivation. Studies have shown that extrinsic motivation has an undermining effect on intrinsic motivation – intrinsic motivation being key to high productivity, creativity and engaged workers. Their Cognitive Evaluation Theory states however, that intrinsic motivation can be increased when individuals take part in work and tasks that give them a sense of autonomy and competency. Letting people find their own solutions to challenging targets, through use of their own methods, should, I would venture, allow individuals to experience both of these feelings.

The case for smaller and controlled
This concept of BHAGs has a lot of backing, especially when connected to tackling sustainability challenges. But not all agree. These bold, future-facing targets, some corporate players have argued, are meaningless, disingenuous and nothing more than good publicity stunts, if set on a timescale that is too long-term. After all, when 30 years has passed, virtually every factor within and around the company will have changed – its leadership and management, the market, resource availability, the needs of the its customer, and so on. The question this begs is will the BHAG even be remembered at that point, let alone actioned?

Companies, some argue, should stick to setting targets within standard business cycles. Targets in these tighter timescales of roughly five years, although more incremental in nature, are more realistic and stand a greater change of staying the course and making a difference.

As one well revered manager put ‘if you define quite tightly the parameters in which people can use their creativity, you often get a better result. People will say ‘it’s over constraining and if you’d let us think more broadly then we’d come up with a better idea; but in my experience that isn’t actually the case’.

A question of constraint or proscription?
It could be argued that this all comes back to the long-standing question of whether constraint breeds or impedes creativity. But perhaps in addition we should consider the roles of prescription and proscription in the process.