Good to Great – “Hedgehog Concept”

This post continues my recap of Jim Collins’s 2001 book Good to Great. In my prior post I introduced the idea of the “hedgehog concept” within the overall idea of Disciplined Thought.

A hedgehog concept is the simplified image of your organization. You and your team develop it. It unifies your team and provides organizational identity and discipline. While others chase new fads and technologies, your hedgehog concept will provide the focus to assure that these new ideas enhance, not detract from, your identity.

One of the prerequisites to developing your hedgehog concept is the need to face the brutal facts impacting your company and industry. However, realize that these brutal facts should help you identify not only where all of the challenges lie, but also help identify your organizational strengths.

To develop a hedgehog concept for your organization, Collins points to three areas that you must understand and be able to articulate:

  1. What is your organization deeply passionate about?
  2. What can your organization be the best in the world at?
  3. What drives your economic engine?

Passion drives commitment. In an earlier post I mentioned that motivation should be an irrelevant concept. If you have motivation problems you haven’t found people who feel passion toward the organization’s goals. So, work to find out what your organization, as a whole, can feel passionate about. This will make it very clear, going forward, who should be part of the team and who shouldn’t.

Becoming the best is far harder than simply being good. To become great you have to excel. What can your organization excel at? Considering your people, your infrastructure, your customer base, your passion – what can you become best in the world at? You don’t have to be best at the moment; you just need to have a realistic chance (facing the brutal facts …) to become the best. Because, let’s face it, if you can’t become the best at something you can still be a good company but you’ll never be great.

Measuring financial performance is critical to any business. This can take some creativity because you don’t have to accept standard industry concepts. You may choose profit per customer visit (retail), total fees per relationship hour (service), or anything else that you can reasonably and simply express as $ per ?. The point is that there is a significant difference between maximizing profit / ($ of retail sales) and profit / (customer visit). This difference can result in a dramatically different hedgehog concept.

If you can articulate these concepts while facing the brutal facts you will develop your focus, your hedgehog concept. Remember that it’s simply a way to focus and articulate the essence of your organization. Then, as new technology and business opportunities come along you can plug them into your organization in a way that’s always consistent with your hedgehog concept. It’s this consistency and discipline that drives long term greatness.

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