BHAG stands for...
BIG. HAIRY. AUDACIOUS. GOALS.
According to Jim Collins, the BHAG is "a long-term goal that challenges the very nature of what is possible".
BHAGs are bigger, bolder, and more powerful than any typical long or short term goals.
The BHAG sits at the highest point above everything. It's above tasks, objectives, quarterly goals, and even yearly goals. Your BHAG represents the North Star for everyone as it can act as a guide for those who need direction, clarity, inspiration, or motivation.
Your BHAG not only represents a goal but also a message. It's a message to everyone stating that all of what is currently being worked on is contributing towards a long-term vision of success. Your definition of success may vary depending on what business you're involved in, it's overall purpose, and values within. For example, Google's BHAG might be "to organize the world's information and make it universally accessible and useful" however, Starbuck's BHAG might be to 'become one of the most recognized & respected consumer brands in the world'.
This needs to be a company goal and not an individual goal. Which means that it should be about where the company would like to end up in 10-25 years and not what life should look like for an individual within the business.