Feb 18, 2014

Modern Engineering: BHAGs Drive Innovation

“The BHAGs looked more audacious to outsiders than to insiders. The visionary companies didn’t see their audacity as taunting the gods. It simply never occurred to them that they couldn’t do what they set out to do.” -Jim Collins & Jerry Porras, Built To Last.

Goals drive performance, especially BHAGs — big hairy audacious goals. They stretch you to try things beyond your reach, but they also focus your team on what’s important.

Modern Engineering is one of the oldest machine shops in British Columbia. It’s a second generation family business founded in 1939, and they have a BHAG. Udo Jahn, General Manager of Modern says, “Our primary goal is to render conditions favorable to manufacture in North America.”

It’s no small goal. They’re not simply interested in competing on a global stage. They’re trying to rejuvenate the value proposition of manufacturing industrial equipment in North America.

BHAGs drive behaviors

BHAGs have two roles. First, they stimulate and motivate your team to change. And second, they shape the ideology of your brand.

Modern Engineer’s BHAG fulfills both roles. The goal gives the team latitude to innovate and try new ideas. They can look beyond their client projects, and consider how they can make incremental improvements in the business and their approach to manufacturing. It’s liberating to innovate when you have a clear purpose.

The goal also shapes Modern’s brand. They can approach their clients, and challenge them to improve their manufacturing processes too. The ideal becomes infectious, and allows engineers to come together, try new ideas and work to improve processes and techniques.

The BHAG elevates the brand from just another supplier to a company deeply committed to innovation and pushing the status quo.

There’s no such thing as perfect

Perfectionism is a deterrent to a BHAG. Your team needs latitude to take risks, make mistakes, learn and get better.

Udo explains, “There’s no such thing as perfection. It’s the 80/20 Rule. If you can solve 80% of the problem you’re laughing.” But very few people or companies share this point of view. Udo continues, “Everyone wants to be number one, but they forget they have to get past 50% first. We’re conditioned to strive for perfection. People measure themselves from 100% down versus 50% up.”

It’s an interesting insight, and it makes Modern’s pursuit of a BHAG more achievable. Their goal is massive. It has a lot of moving parts, and many are outside of Modern Engineering’s control. But by focusing on incremental improvements they can work on what’s in their control, and they can make tangible improvements month-over-month and year-over-year.

Udo continues, “We’re heavily invested in becoming better every day. We don’t try to compare ourselves to the competition. We try to compare ourselves to where we’ve come from, and ask are we better today?”

Make purposeful investments

A BHAG demands action.

You can’t make manufacturing in North America productive and competitive without very purposeful investments. Udo says, “We put our money where our mouth is.”

Modern Engineering makes major investments in capital equipment, processes and talent to achieve their BHAG. For example, they’re about to become the only machine shop in Western Canada with five 5-Axis CNC machines. And they invest in the tools and automation to operate at peak performance.

Modern also invests heavily in talent. Udo explains, “Our apprenticeship program is a clear differentiator for the company. We have more apprentices than all of our direct competitors combined.”

The apprenticeship program allows Modern to find talent early, teach them how to be tradespeople versus technicians, and give them the tools to succeed. Out of Modern’s entire workforce only two of their employees were not apprentices.

Go big or go home

Does a BHAG make a brand? No. Collins and Porras write, “BHAGs alone do not make a visionary company. Indeed, progress alone — no matter what the mechanism used to stimulate progress — does not make a visionary company.” But when used effectively, a BHAG does shape a brand.

Udo Jahn’s vision for North American manufacturing is infectious. It gets people to say, “That’s interesting. Tell me more.”

And that interest comes out in many ways. It attracts talent that want to make a dent in the manufacturing sector, and want to work towards the vision. It attracts customers that share the same belief, and want to work with suppliers that get it.

The BHAG is a lightening rod. It takes the brand from just another machine shop to one challenging the status quo and working to achieve something greater than the collective sum of its parts.

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