Are you a hedgehog or a fox in business? ’The Hedgehog and the Fox’ by Isaiah Berlin describes how the world can be divided into two types. The wily fox is cunning and knows many things, using various complex strategies to attack the hedgehog. Whereas the hedgehog is single-minded and only knows one big thing- rolling up into a perfect sphere of sharp spikes to defend itself against the fox. Surprisingly, the stubborn hedgehog always wins despite the many different tactics the crafty fox uses.
The Hedgehog Concept
In business strategy the Hedgehog Concept is developed in the book Good to Great by Jim Collins. It is not a goal to be the best, a strategy to be the best, an intention to be the best, or a plan to be the best. It is an understanding of what you can be the best at – and sticking to it – a distinction that is absolutely crucial. The Hedgehog Concept, is defined as the sweet spot intersection of three circles, as follows:
- What you are deeply passionate about? The idea is not to stimulate passion but to (re)discover what you love doing and focus on those activities.
- What drives your economic or resource engine? How to generate sustained and robust cash flow and profitability? Aim to discover a single driving denominator number or metric known as ‘Profit per x’, which has the greatest impact on your economics. For non-profits or social enterprises, this could be a resource engine broken into three parts – time, money, and brand.
- What can you be the best in the world at? (and, equally important what you can’t be the best at). If you can’t be great at your core business, then your core business can’t form the basis of your Hedgehog Concept.
Find Clarity In Your Business
Defining your Hedgehog Concept is about clarifying what you do and why you do it. This is an iterative process. How valuable are these ideas on strategy when most leadership teams have too much to do already? It’s all about clarity. A clear strategy and vision ultimately leads to clarity with your people, your suppliers and your customers. Clarity translates into focus. With the increased intensity of focus, your people will accomplish more. Strategy drives revenue. If your company doesn’t want to grow, then these strategy elements will fall on deaf ears. Of course, there’s a danger in not growing.
As Ray Kroc, founder of McDonalds said, “When you’re green you grow; when you’re ripe, you rot.”
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