What is the Hedgehog Concept?
It’s a similar axiom to the One Thing. Based on the famous essay by Isaiah Berlin, “The Hedgehog and the Fox” describes how the world is divided into two types. The fox knows many things. The fox is a very cunning creature, able to devise a myriad of complex strategies to sneak attack upon hedgehog. The hedgehog knows one big thing, rolling up into a perfect little ball thus becoming a sphere of sharp spikes, pointing outward in all directions. The hedgehog always wins despite the different tactics the fox uses.
For People / Business the Hedgehog Concept is the intersection of three circles.
Great people/companies are more like hedgehogs; they know “one big thing” and stick to it. Mediocre people/businesses are more like foxes; they know many things but lack consistency.
Understanding is the key.
Here are the three circles of the Hedgehog
1. What you can be the best in the world at (and, equally important what you cannot be the best in the world at).
If you cannot be the best in the world at your core business, then your core business cannot form the basis of your Hedgehog Concept. This basic understanding goes far beyond core competence. A core competency does not guarantee that you can be best in the world at it. Conversely, what you can be the best at might not even be something in which you are currently engaged.
2. What drives your economic engine?
Most of the good-to-great companies discovered a single driving denominator as profit per x, which had the greatest impact on their economics. For social sector, instead of economic, resource engine – which is broken into three parts as time, money, and brand.
3. What you are deeply passionate about.
The good-to-great companies focused on those activities that ignited their passion. The idea here is not to stimulate passion but to discover what makes you passionate.
Do these principles apply only to businesses and industries that are growing? Consider Collins’ comments, “You absolutely do not need to be in a great industry to produce sustained great results. No matter how bad the industry, every good-to-great company figured out how to produce truly superior economic returns.”
Hedgehog Concept – an iterative process
You need to be aware that getting your Hedgehog Concept is an iterative process. Don’t expect one pass to be enough to discover it. In fact each of the three circles can take some time to complete. You may already have discovered what you are deeply passionate about. It should be hidden in or be your Core Purpose. In some companies this might be your mission statement. In reality you may find that looking at your Hedgehog Concept and particularly what you are deeply passionate about that your Core Purpose or mission needs to be reexamined.
It can take four years on average for companies to get a Hedgehog Concept.
In one word: clarity. Crafting a strategy ultimately leads to clarity with your people, your vendors, your customers. That clarity translates into focus. Over time a clear strategy delivers a decisive blow to make your previous marginal efforts definitive impacts that transform the marketplace.
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Adopted from Jim Collins Book – Good to Great