In his 2001 book”Good to Great,” author and researcher Jim Collins sought to explain”why some companies make the leap [from good to great] and many others don’t.” His answer plays out over about 300 pages, and it includes the Hedgehog Concept.
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“In the famous essay’The Hedgehog and the Fox,’ Isaiah Berlin divided the world into hedgehogs and foxes, based upon an ancient Greek parable:’The fox knows many things, but the hedgehog knows one big thing,” explained Collins at the introduction of chapter six of his book.
“The fox is a cute creature, able to invent an assortment of complex strategies for sneak attacks upon the hedgehog. Day in and day out, the fox circles round the hedgehog’s den, waiting for the perfect moment to pounce. Quick, sleek, beautiful, fleet of foot, and crafty — the fox looks like the sure winner. The hedgehog, on the other hand, is a dowdier monster, looking like a genetic mix-up between a porcupine and a little armadillo. He waddles along, going about his simple day, looking for lunch and caring for his home,” wrote Collins.
“The fox waits in cunning silence at the juncture in the trail. The hedgehog, minding his own business, wanders into the path of the fox,” Collins continued. “`Aha, I have you now!’ thinks the fox. He jumps out, bounding across the ground, lightning-fast. The little hedgehog, sensing danger, looks up and thinks, ‘Here we go again. Will he ever learn? Rolling into a perfect little ball, the hedgehog becomes a world of sharp spikes, pointing outward in all directions. The fox, bounding toward his prey, sees the hedgehog defense and calls off the attack.”
A Retail Hedgehog?
Now imagine an austere conference room in a mid-sized retail firm. The company’s leaders have gathered to discuss how Covid-19 has impacted the business, what the upcoming election might do to its business, and what they need to do next.
There are several discussions. Ideas fly about. Some want to mimic the contest. Others think new technology is the solution. Others suggest hiring or firing employees. Each person argues for her position, giving good reasons for their approach until nobody is sure what the business should do.
The issue in this scenario may be that there are too many foxes and insufficient hedgehogs.
“Foxes,” Collins wrote,”pursue many ends at the exact same time and see the world in all its complexity…Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a fundamental principle or concept that unifies and guides everything. It doesn’t matter how complicated the world, a hedgehog reduces all challenges and dilemmas to easy…hedgehog ideas.”
According to Collins,”Those who built the good-to-great firms were, to one degree or another, hedgehogs. They used their hedgehog character to push toward what became known as a Hedgehog Concept for their own companies. Those who headed the comparison companies [which failed to become great] tended to be foxes, never gaining the clarifying benefit of a Hedgehog Concept, being rather scattered, diffused, and inconsistent.”
As merchants struggle to deal with the many and various challenges 2020 has attracted, it may make sense to attempt and simplify the complex.
In”Good to Great,” Collins does not tell readers what their particular Hedgehog Concept needs to be , rather, suggests looking at the overlap of three circles or dimensions.
Collins creates a Venn diagram for the Hedgehog Concept. The easy, clarifying hedgehog idea is in the intersection of the three circles or measurements. Picture: Jim Collins.
These dimensions are questions that a company can ask of itself to develop a simple and clear business strategy.
- What are you the best at?
- What makes you money? Or “What drives your economic engine?”
- What are you deeply passionate about?
Context is important here. Collins is speaking directly to company leaders who wish to build great businesses and outperform the competition.
A firm happy with its share of this marketplace doesn’t necessarily need to focus on what it can be the very best at. However an omnichannel or ecommerce merchant aspiring for greatness can only really focus on what it can do better than any other business.
Competence is not enough in itself. If the company is not passionate, it will not sustain the energy and drive required. Similarly, if the thing a company is enthusiastic about and good at doesn’t generate profit, it will not be great.
When a business can identify its Hedgehog Concept, it has one of the components of a future, terrific company. It has an easy and understandable strategy that will guide it through hard choices. This is true even in a year such as 2020, even in the middle of a worldwide pandemic, and even in the face of political uncertainty.