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BHAG is an acronym for ""big hairy audacious goal"", a term coined by Jim Collins. It has elements of both idealism and realism. Therefore it is an ambitious goal, not attainable in the short run, for ten to thirty years out. It is based on understanding and fits within what Collin's calls the Hedgehog Concept, therefore it reflects the organization's core values and core purpose. Lastly, it must be clear and compelling.

A BHAG, whether given that term or some other, is an essential element of an effective strategy. It further clarifies the direction the organization is going, it reveals the yawning gap between what the organization is today vs. what it can be tomorrow, and complements a compelling vision with clearly established goals.