THE HEDGEHOG CONCEPT

In his book “Good to great”, Jim COLLINS presents the hedgehog concept as one of the major differentiators between excellent companies and their more mediocre competitors. Learn more about this concept in this article.

I discussed the work of Jim COLLINS and his team in a previous ARTICLE. As a reminder, they analyzed, during 5 years, 11 companies called excellent (according to specific criteria) and compared them to their direct and indirect competitors. Several differentiators emerged, including the hedgehog concept.

Where does this name come from ? It actually refers to Isaiah BERLIN’s essay “The Hedgehog and the Fox”. The fox is a cunning animal able to imagine complex strategies to catch the hedgehog. It circles around the burrow and waits for the best moment to pounce on its prey. The hedgehog limits himself to one technique that he masters perfectly. It rolls up in a ball, erects its spines and thus puts the fox out of harm’s way. He wins every time. If the fox knows many things, the hedgehog knows only one thing, but an important one.

Keep it simple

Excellent companies build their success like a hedgehog with a simple strategy and stick to it. Leaders of comparison companies tend to be foxes. Their scattered, confused and inconsistent nature does not allow them to access the clarity of this concept.

The hedgehog concept allows a company or a team to reflect on its strategic positioning, clarify its area of excellence in order to identify its raison d’être and make choices.

It is neither an objective, nor a strategy, nor an intention. It is an understanding, that of the intersection of 3 dimensions schematized by circles which are

• what the company is most passionate about
• where the company can be the best at (and where it cannot be)
• what drives the economic engine (according to their profitability factor, e.g. per customer, per store, per employee, etc.).

What Jim COLLINS calls the big bold goals must be located at the intersection of these 3 circles.

The Walgreen example

As an example, WALGREENS‘ hedgehog concept was simple: have the best, most convenient stores that generate the most profit per customer. This is the strategy that allowed them to beat Intel, GE, Coca-Cola and Merck.

This concept can also be useful for anyone who wants to change career direction, where you work on your “own business”.

Question or comment? As always, I will be happy to answer them.