3 Questions You Must Answer To Identify A Hedgehog Leader

Do you lead like a fox or a hedgehog?

The fox leader knows many things.

The fox leader chases after many different things at the same time.

The fox leader focuses on the complexity of the issues he is facing.

The hedgehog leader knows One Big Thing!

The hedgehog leader takes the complexity of their world and simplifies it down to one simple organizing concept.

The hedgehog leader unifies his team around this simple organizing concept to guide all their activities throughout the company. It becomes the filter they use to screen out all unwanted, unneeded, and unproductive activities.

As we break down the key concepts of Jim Collins’s book Good to Great, we will learn at the feet of a hedgehog today. Collins uses the hedgehog as a paradigm to help us understand how good to great companies operate so effectively.

The Hedgehog Concept is the guiding force for all the decisions a good to great company makes.

So what is the Hedgehog Concept?

The Hedgehog Concept is a simple, crystalline concept that flows from a deep understanding of the intersection of the three circles. The key is to understand what your company can be the best at and, equally important, what it cannot be the best 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.

The 3 Questions You Must Answer

1. What is the one thing you can be the best at in the world?

The best in the world understanding is a much more severe standard than a core competence.

This is much more than a goal, plan or strategy to be the best at something, it is a core understanding of what you actually can be the best at.

This forces your organization to be honest with itself and evaluate where it really stands versus the competition.

This is where Confronting The Brutal Facts comes into play as we discussed in our previous post on this subject in great detail: You Can’t Handle The Truth

2. What is the one thing that drives your economic engine?

To get an insight of your economic engine, search for one denominator.
What is your profit per X?
In some cases it is profit per customer, in other cases, it might be profit per store. You have to determine what your key metric is in this area is, measure it, know it and run your business by it.
This is an essential element to know and understand about your business, without it, you won’t make the right decisions on how to move your business from good to great.

3. What is the one thing you are passionate about?

If you are going to have a laser focus on one thing you better love what you are doing.
Set your goals and strategy on understanding, not bravado.
Getting the Hedgehog Concept is an iterative process.
On average, it took good to great companies 4 years to find their Hedgehog Concept.

People are squandering their time and resources on the wrong things.

Key Learnings

The fox knows many things, but the hedgehog knows one big thing.
Foxes pursue many ends at the same time and see the world in all its complexity. They are scattered or diffused, moving on many different levels. They never integrate their thinking into one overall concept or unifying vision.

Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything.

Do you want to know what separates the most influential people from those who are just as smart? They are the hedgehogs.

Hedgehogs see what is essential, and ignore the rest

Walgreens concept – simply this: the best, most convenient drugstore with high profits per customer visit.
All good to great companies attained a very simple concept that they used as a frame of reference for all of their decisions, and this understanding coincided with breakthrough results.

A Hedgehog Concept is a simple, crystalline concept that flows from a deep understanding of the intersection of the three circles

What you can be the best in the world at?
What drives your economic engine? (a piercing insight)
What are you deeply passionate about?

If you make a lot of money doing things at which you will never be the best, you will only build a successful company, not a great one.

If you become the best at something, you will not stay on top if you don’t have an intrinsic passion for what you are doing. Finally, you can be passionate all you want, but if you cannot be the best at it, or it doesn’t make economic sense, then you might have a lot of fun, but you won’t produce great results.

This works at a personal level as well as a business level.

A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at. This distinction is absolutely critical.
Clearly, a Hedgehog Concept is not the same as a core competence.

Suffering from the curse of competence, but lacking a clear Hedgehog Concept, companies rarely become great at what they do.

The central point is that each good to great company attained a deep understanding of the key drivers of its economic engine and built its system in accordance with this understanding.
What is your economic denominator? eg profit per x, maintenance cost per x, etc
The denominator question serves as a mechanism to force a deeper understanding of the key drivers in your economic engine
Have a denominator not for the sake of having a denominator, but for the sake of gaining insight that ultimately leads to more robust and sustainable economics.

You need the discipline to stay within the three circles.

The only way to stay great is to keep applying the fundamental principles that made you great.
You cannot manufacture passion or ‘motivate’ people to feel passionate. You can only discover what ignites your passion and the passions of those around you.

Comparison companies remained shrouded in mist for two reasons

They never asked the right questions prompted by the three circles.
They set their goals and strategies based more on bravado than on understanding.

Getting the Hedgehog Concept – an iterative process

1. Ask questions guided by the three circles.
2. Dialogue and debate, guided by the three circles.
3. Executive decisions, guided by the three circles.
4. Autopsies and analysis, guided by the three circles.
5. Go back to #1.

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