"The fox knows many things...but the hedgehog knows one "BIG" thing."
Isaiah Berlin.
Jim Collins termed the hedgehog concept in his bestseller, Good To Great. He drew a picture around the Greek parable of a crazy fox chasing after every thing it smelled, contrasted to the deliberate, intentional and focused hedgehog; who knows one thing and knows it well.
The hedgehog concept, Collins argues is the "pivotal point within Good To Great." The hedgehog concept is the intersection of three circles: What can a company be best in the world at, what drives the economic engine and what is the company passionate about.
In later years, Collins increasingly discussed the hedgehog concept as it pertains to individuals. Ever since I sat wide eyed and open mouthed several feet from the stage Mr. Collins was speaking on; I've been a believer! Over the years I've spent many a hours drawing circles ...daisies and tulips, too if I must confess.
But really, these circles are my passion, it's my purpose to delve into them; Passion, Purpose, Profits.
Purpose. I define purpose similar and yet differently than Collins. Purpose describes a person's uniqueness, their giftedness, their natural talents and the things they most often receive compliments on. It's dna, it's divine, it's unique and for many it feels like a calling, their purpose; why they are here on planet earth. Purpose for a company is what it can be best at, it's unique mastery, expertise, knowledge, abilities, resources that are exceptional.
Passion. When you do this you feel alive, like you, exhilarated, in the zone, you can do it for hours and it feels like mere moments have passed, it's where excellence and magic come together for you, it gets you up at 3am...The things your passion about, are on your morning 'grateful' list even when Wall Street's crumbling and Iceland's melting. In a company, passion is about what the team and the culture goes ape over, the beliefs, the values and what everyone intends to do together!
Profits. Financial mechanisms that fuel your life and the life of your company. What are the financial mechanisms, engines that intersect the intersection of your passion and purpose? In a company it's the financial mechanisms, revenue streams that drive profitability.
At the intersection of Passion, Purpose and Profits, we find our personal hedgehog niche and our companies hedgehog concept.
As children of the creator; I believe this is sacred place, holy ground; because it's where we are most alive, aligned with our source and flat outlandish, powerful, courageous animals!!!
It is here I guide others, it's personal and sacred. Time and time again, I watch as clients and team members peel back the layers of what they've been told they should do, socialized into, agreed to; only to discover words, false beliefs and agreements that are no longer truth: if ever they were. I watch as masks dissapear and people excavate their most authentic self their most authentic business.
Liberation. Freedom. Authenticity; Hedgehogs Unite!
As exciting as it is to help an individual discover their hedgehog concept its even more of a high to orchestrate the process by which companies, ventures, teams, projects and businesses define and discover their hedgehog concept.
The surest way to lose your balance is to try to do everything, know everything, or be everything to everyone.
Hedgehogs know one big thing. They study the competitive landscape and then get real, hedgehogs like reality; they live there! What can we best at...best in our area, best in our industry, best at? A quick strengths, weakness, opportunities and threats analysis identifies the questions that will lead us to our best.
Stripping away all the layers of the business and quieting their insatiable busyness allows leaders to see their genuis; the magic. Now, what are they most passionate about and what drives the economic engine? Where do the three circles intersect and what would this look like in a business model, in terms of focus?
Marketers, of which I am one, often refer to this as differentiation but for those of us passionately involved in the entire business process; development, business modeling, execution and operations this is not mere marketing, as important as marketing is, rather the hedgehog concept is the cornerstone, the foundation from which we build the business model.
The business model is the recipe for success; a sustainable, innovative, value orientated market solution which realizes the ROI goals of the venture.
Marketing is how we explain who we are...but first we have to be something; not everything. We have to understand our hedgehog concept before we create the recipe; to realize it. Then resources; capital and team allow us to execute it!
Leadership is responsible for the continual filtering of decisions through the intersection of our three circles; our hedgehog concept; what we can be best at, what drives our economic engine and what are we passionate about.
Most often, hedgehog therapy leads to redesigning business models, re-training teams and adapting new operation systems, processes and budgets; then and then only will our communication strategy have the focus and clarity that allows our branding and marketing to skyrocket!
Hedgehogs don't do everything; they have stop doing lists, they say no; because they know one "BIG" thing. Foxes say yes; to everything and believe that more is always better...when in reality; more is often less; at least when more is being all things to all people. The hedgehog listened to that country song that croons, "If you don't stand for something your gonna fall for everything."
The hedgehog concept is the intersection of three circles: What can a company be best in the world at, what drives the economic engine and what is the company passionate about.
There's never been a better time to be a HEDGEHOG! Idea's for liberating the hedgehog within...you and your business:
Visit Jim Collins website, listen to his audio recording on Hedgehogs
Read the chapter on The Hedgehog Concept in Collin's book Good to Great
Sit down and draw your circles...Passion, Purpose,Profits.
What opportunities are at the intersection of the three circles?
Draw your companies circles; Best, Passion, Economic Engines.
What opportunities are at the intersection of the three circles?
Make a 'stop doing' list; everything you need not to do if you want to be a hedgehog!
Make a "what can we be best at" list.
Begin a dialogue with your team on strategy and execution.
"With" is a powerful thing!
Read about me at www.pamhope.com.
Learn more about the author, Pam Hoelzle- Wilmot.
Brilliant Pam. Over the last 6 months as I have been defining my business and where I can own the market I have drawn many circles. As an easily distracted fox it's been crucial for me to keep my eye on my business goals and learn to be more hedgehog like.
Your article really hits why it's important to be focused in any business.
Denise,
It's the entrepreneural fox in all of us; heh? I like to ask myself heh are you a lazor beam or a light bulb MISSY?
Intent is powerful and it's never been more important than now in the economic and spiritual climate that surrounds us.
Pam
Thanks, Pam. Great article! Keep up the good work.
Paul
Yes, yes, yes.
I sometimes call fox behavior BSO, the Bright Shiny Object syndrome.
Accidental Entrepreneurs are especially at risk on contracting BSO when they are anxious. After all, what could be better than a bright idea to distract us from what we fear?
On the other hand, if we doubt our right or ability to live and work at the intersection of Purpose, Passion, and Profitability, we may miss the hedgehog opportunity. It is scary to go for what you really want. (How many times have you worked harder for someone else's priorities than you do for your own dreams?)
So, a timely reminder, Pam.
BSO I love it....not just BS!
I don't know about you Molly but for years I don't think I thought it was possible to have what I really wanted ...my personal hedgehog and that is a false belief, a socialized agreement that I now see for what it is; untrue.
But just the opposite happens in our businesses right because we think we have to do more and that augmenting the product, enhancing the sku's and variety are the key's to success. An expanded product offering may increase ROI or it may negatively affect cash flow and put us out of business.
What drives profitability or solves the innovation value equation and creates loyal clients and intersects with what the business is passionate about and can be best at?
Keep asking the questions...
Pam Hoelzle
Hi Pam, As you've admonished me a number of times to get focused, I think I am finally getting that and this article puts a stamp on that...Thanks! Craig Sigl
Admonished? Who me. Encouraged. Empowered; maybe? Focus is a word that for entrepreneurs is almost like love; sometimes so overused it loses its meaning. More than focus, Craig; More! Focused on what lights you up, what offers you greatest return for your investment ( some of us define ROI differently than others; i.e.; triple net bottom line, return to associates, NI...) Keep pushing into that intersection of where your business provides the highest client value, the highest level of innovation and allows you to be in the space you are most skilled at, passionate about and enjoying the financial benefits; revenue streams of!
Onward!
Pam,
This is truly a great concept. Jim gives a great example of Walgreens in his book about convenience as their hedgehog concept. And there are now 4 stores going up near my neighborhood within about 10 miles of each other. Great wisdom! Great reminder.
Thanks.
Steve
Steve -
Your job gets easier- doesn't it if all us entrepreneurs get clear about what our one thing, our big thing is and if we consistently and intentionally make decisons and lead congruent with our hedgehog concept.
To decide is to cut off options. Business leadership demands decisive, clear, intentionality. Clarity is powerful isn't it?
Entrepreneurs are notorious, aren't we, for the multiple voices in our heads; each pointing us in a different direction, all simultaneously. We love the adrenaline high of the next best thing but beware this behavior has landed all of us in a den of foxes on more than one occassion.
The hedgehog concept helps us bring discipline and focus to our ventures and it's proven that increases our probablity of success.
Results- who wants to chase their tail only to end up out of breath, aren't we all looking for way's to succeed?
Take some time and dialogue with your advisors today about your hedgehog concept.
www.jimcollins.com chapter 5 Good To Great
Thanks Pam, great article. As someone with many interests and a diverse background, I've been known to chase my tail.
I like the picture of the three circles and looking to see where they intersect. Great visual. When I get further out towards the edges of the circles is where my energy - ans results - get very compromised.
I said "No thanks" to an opportunity yesterday... although I hadn't read this yet, it describes the process I went through. It was definitely my passion, but wasn't 100% in my purpose, and profitability was dubious. It felt good to say "no."
Pam,
I love the book "Good to Great." I teach it and share it with my clients. The Hedgehog Concept has been very difficult to explain and make concrete for my clients. We have had the most fun figuring out the economic drivers.
I find that most small businesses are already doing what they are best at and what they are most passionate about. The profit driver has really helped my clients get beyond break even in their business.
I was working with a property manager that had not made a profit (although an O.K. salary) for 18 years. We determined that she had two profit drivers. The first was profit per property. The second was profit per agent.
This thinking caused her to do job costing on her properties to determine how much profit she was making per property and to devise pricing strategies that were actually profitable and to get rid of properties that lost money.
Her and her agents devised several strategies for increasing the profit per agent. The very next year she went from $0 profit to $20,000 in profit. This year she doing even better.
What have you noticed from helping clients with the Hedgehog concept?
Your article was great reminder to continue to use this with my clients. Thanks!
Pam, Very timely article. To your three "P"s I might add Path. How appropriate this article is to demonstrate the philosophy in your work.
Evaluating all potential revenue streams using a filter of what the team is best at, what they want to own and are most passionate about is a lively evaluation. Many times we are making money with multiple streams and in varied manners. Are they congruent with our one big thing...are they congruent with our vision? Are they what we excel at and what raving fans and our tribe wants from us: what else could be created here...more purple cows, as Seth Godin describes them that intersect passion, purpose ...It's about who we are and what our raving fans can't get enough of that we love to provide...
Bookmark article
Follow article
Email to a friend
Share article
