Hedgehog Concept – being good at one thing
Since it’s World Hedgehog Day (really it is!), as well as Groundhogs Day it seems a good time to have a post about the Hedgehog concept. It’s a great way to look at the business or organisation that you belong to or that you own.
Firstly let me ask you would you rather be a fox or a hedgehog?
Remember your answer – see if it stays the same after you’ve read the rest of this article.
The concept is based on an old Greek parable that describes how a fox tries many ways to catch a hedgehog but the hedgehog knows one big thing. The fox uses many different strategies (think of it like the roadrunner cartoons and Wile E Coyote trying to catch him) but the conclusion is that the “The fox knows many things, but the hedgehog knows one big thing.” The big thing is how to defend itself!
In 1953 Isaiah Berlin, a British philosopher built on that idea dividing the world into two types of people – foxes and hedgehogs. Foxes are sleek and shrewd but they tend to multi-task and don’t really focus. Hedgehogs on the other hand are slow and steady and they tend to focus on one simple vision.
In 2001 Jim Collins wrote a book “Good to Great” and he expands the idea further into companies.
The hedgehog concept (see diagram) says that there are 3 areas that any business needs to consider:
1 – What are you deeply passionate about? Without the passion the business that you are creating cannot be great. What gets you up in the morning? What do you get excited about?
2 – Understand what can you be the best in the world at, and also understand what you cannot be the best at. This is about understanding your strengths and weaknesses as a business and understanding what your business can do better than any other business.
3 – What drives your economic engine? Understand how your business is generating cash flow and profits. You may think you know how your business is going that but check the numbers to make sure that the reality is what you think it is.
The hedgehog concept is the sweet spot where those three intersect. It’s your vision that will guide your business strategy to success.
So I asked you a question earlier – Would you rather be a fox or a hedgehog?
If you didn’t know about the hedgehog concept is your answer the same now as it was at the start?
Prefer a video? Here is a link to Jim Collins explaining the hedgehog concept in a short video.