BHAG stands for Big, Hairy, Audacious Goal. It was coined by business professors James Collins and Jerry Porras in their HBR article about enduring corporate visions. A BHAG is a strategic business statement which is created to focus an organization on a single medium-long term organization-wide goal which is audacious, likely to be externally questionable, but not internally regarded as impossible.
Visionary companies often use bold missions—i.e. BHAGs—as a powerful way to stimulate progress.
A true BHAG is clear and compelling, serving as a unifying focal point of effort and acting as a catalyst for team spirit. It has a clear finish line, so the company can know when it has achieved the goal. People like to shoot for finish lines.
A BHAG engages people. It is tangible, energizing, highly focused. People should get it right away—i.e. it requires little or no explanation.
Most corporate statements do little to spur forward movement, because they do not contain the powerful mechanism of a BHAG.
You can read more about BHAG in this presentation document, Building an Enduring Corporate Vision.Business frameworks like BHAG (Big Hairy Audacious Goal) are invaluable to evaluating and analyzing various business problems. You can download business frameworks developed by management consultants and other business professionals at Flevy here.