As a young CEO – I had big dreams. That was the easy part. I could easily see the 10-30 year picture and communicate the picture clearly to my whole team. As Jim Collins and Jerry Porras coined it – we knew our Big Hairy Audacious Goal (BHAG). We could all describe it. We would together as a team continuously make this 10-30 year goal clearer and clearer.
We had no idea at the time how we were going to achieve this goal but we did believe we would get there. As the CEO – I wasn't too concerned on the how but wanted to be sure we all knew where we were headed. We knew we wanted to drive the company to be the Leading Global Payment Platform for face-to-face and non-face-to-face transactions.
In those early days - we were highly execution focused. We gained a lot of respect from our major banking partners who were counting on us to solve their problem of connecting their payment processing system, to enable their business customers with Internet payment. We were software developers who took pride in delivering meaningful solutions on time.
We also knew that if we were going to achieve our BHAG, that we had to get very, very clear on our strategy to achieve this goal. In order to do this we needed to take this complex strategy and make it clear and simple by establishing our 3 Year Highly Achievable Goal (3HAG). We achieved this clarity through the process outlined below with our leadership team:
Step 1 : “Gut Out” Your 3HAG:
- “Gut Out”/Write down what you want your cash, profit, expenses and revenue to be at the end of 3 years from now. Ball park figures are fine at this time.
- In a phrase, describe and write down what your company will be in 3 years' time. For instance – our BHAG was to be a leader in global payment processes. In 3 years – we wanted to be the Leading North American Payment Processor. To help with this discussion, review what you will be selling, to whom you will be selling and where you will be selling.
- With your team, discuss and write down what the 3-5 key capabilities your company will have to have in order to achieve what you described above. If we were going to be the leading North American Payment Processor in 3 years we needed to have in place the following:
i. Highly available data centres in Canada and the USA.
ii. Data mapping specification that worked with all payment processors and banks.
iii. Setting-up new customers in less than 1 hour.
iv. 24 X 7 support centre
v. Well established reseller program
4. Write down a few ideas on what you believe the company should be known for in 3 years. We wanted to be known for “Making payments easy”.
Step 2: Gain Confidence in your 3HAG through a full discussion with your leadership team to create these strategic pictures:
- The Map (External): Draw a picture of the market you “play” in. (CHAPTER 2)
- The CCC Map (Internal): Draw a picture of your Cash Conversion Cycle from your leads all the way to cash in the bank. Start at a highlevel and work your way into more details. (CHAPTER 2)
- Core Customer: Know your “core customer”. You must understand why they will buy your offering at a profit.(CHAPTER 6)
- Attribution Framework: Know the key characteristics of the market and choose what yours will do best that truly matters to your core customer. (CHAPTER 6)
- 3-5 Differentiating Activities: Discuss, identify and draw your 3-5 differentiating actions in an Activity Fit Map. (CHAPTER 6)
- One Phrase Strategy: Brainstorm with your team one phrase that describes your strategy. (CHAPTER 6)
- Brand Promise: Write down your promise to your core customer that will differentiate your offering in the market place and attract customers to buy at a profit. (CHAPTER 6)
- X-Factor: Discuss, write down and draw what your 10X advantage is that you have in the market place. (CHAPTER 4)
Step 3: Create your 12 Month Execution Plan
Step 4: Create 90 Day Execution Plan
Step 5: Create 36 Month – Month over Month detailed Forecast
Step 6: Create a regular meeting/discussion rhythm to regularly review your 3HAG through the strategic picture created:
- Daily Meeting
- Weekly Meeting
- Monthly Meeting
- Quarterly Meeting
- Annual Meeting
Step 7: Keep your 3HAG front and centre in every discussion through recording this information on Column 3 of Verne Harnish’s One Page Strategic Plan. Download here
As a coach of CEOs of high growth companies and as a CEO myself, I have learned the obvious: All CEOs have a strategy and more than 96% are not able to say their strategy in one sentence. They do not have any confidence in their strategy. Their strategy is complex and no one can remember it.
The goal of a 3HAG is to take a complex strategy of any company and make it clear and simple. Make it memorable so all can remember. Turn your strategy into a picture so your team can relate and be confident in order to make faster decisions daily driving toward the company’s 3 Year Highly Achievable Goal of winning the market position to grow the company. Ask yourself – whether you are CEO or not - can you say your company’s strategy in one sentence or less? Do you have confidence in your strategy? You will if you get clear on your 3HAG and start the process of a regular discussions with all your leaders and team members.
For the tools and examples mentioned above – please go to www.shannonsusko.com/resources