The Hedgehog Concept


How is your hedgehog? To some this might be a strange question, to others familiar with business guru Jim Collins’s Hedgehog Concept, it will make sense. In his book, Good to Great, Jim outlined the basis of this strategic concept – and it’s all about having clarity around the underlying purpose of the business and doing it well (the approach of the Hedgehog), rather than the consistently distracted, always looking out for the next opportunity Fox.

But, its more than a strategy – the hedgehog is the understanding that comes from discovering the answers to these three key questions:

1. What are you passionate about?

2. What can you (your business this is) be the best at?

3. What drives your economic engine?

The hedgehog concept is the intersection of three circles – the understanding. Powerful stuff if you get it right. Once you have answered these questions, they should be used to help set your strategy. They can be used both as an exploration, to understand what drives you and your business; and also as a cross-check when you have chosen a strategy. If the strategy is not consistent with the three questions – is it the right one?

How to make the hedgehog concept work for you.

Understanding Your Passions

What are you passionate about at work? What gets you up in the morning and keeps you working late,when everyone else has gone home your passion as a business owner IS the purpose of the business. It is this singular purpose that will drive the business forward and help it and those who work within the business identify true opportunities as they arise and avoid distractions that don’t with this passion / purpose.

What you can be best at?

You need to identify and understand what your business can do better than any other business – find it and it’s a powerful tool for growth. If you cannot be number one in the world at this, then it shouldn’t form the basis of your Hedgehog Concept.

This is where you look at your SWOT, your SWT, your core competencies and examine your business in detail – you will find that one thing that will set you above all others.

This is a true test in honesty – you also need to know what you’ll never be the best at, knowing what yourweaknesses are.

Understanding Your Economic Engine

To have a sound economic engine, your must understand how you generate cash and profit in your business. This insight should be expressed as a single “economic denominator” a measure of profit that can have the greatest and most sustainable impact on the your long-term success.

 Identify your Hedgehog

Once you’ve looked at and found the answers to all three questions, look at where they overlap. At the point of intersection, you’ll find your Hedgehog this is where you clarify your central Vision or Big Hairy Audacious Goal (BHAG) that guides your businesses strategy.

Don’t worry if it isn’t obvious right away almost no-one gets this first time and clarity is developed over time, the more focus you put on your hedgehog the clearer it will become.