Introduction
Hedgehog vs Fox
The Three Circles
Economic Engine
Understanding Your Passion
Posthedgehog
Hedgehog Concept
Hedgehog vs Fox
Fox: pursue many ends at the same time, see the world and all of its complexities
Hedgehog: simplify everything in a single organized idea or basic principle
Hedgehog Concept: intense understanding of what a company can be the best at
The Three Circles
Hedgehog Concept is a simple concept that comes from an understanding of the intersection of the following three questions:
1. What can you be the best in the world at ( and what you cannot be the best in the world at)?
2. What drives your economic engine?
3. What are you deeply passionate about?
A fully developed Hedgehog Concept includes all three circles.
Core competencies may not necessarily be the hedgehog
Just because an organization is good at something and is profiting off of it does not mean they can be the best at it.
Economic Engine
Good to Great companies were not in spectacular industries, they simply understood the key economic driver in that industry.
Economic Denominator:
the one ratio that would have the greatest and most sustainable impact on the economic engine (ex: profit per x)
Economic denominator gives specific insight into what the economic driver is in industry.
Walgreens:
Shift from profit per store to profit per customer visit
Understanding Your Passion
Strong need for passion in a company to succeed
Passion cannot be manufactured, passion has to be discovered internally instead of motivated externally
Gillette:
Top business school graduate not hired because she had no passion for deodorant
Fannie Mae:
Strong passion for what the company stood for in helping all classes of people purchase homes
Posthedgehog
Prehedgehog:
Searching through the fog, long march with no vision of what is to come
Posthedgehog:
Break through the fog and receive a clear vision of what is ahead
Growth is not a hedgehog but the posthedgehog creates long, sustainable growth with strong momentum
Clarifying the hedgehog concept comes through a process called the Council
Conclusion
Hedgehog Concept aims to simplify the complex in order to make smart, strategic business decisions through the three circles.
Coming to the conclusion of the hedgehog is an iterative process led by the Council model.
The Hedgehog Concept is not a goal, strategy, or intention; it is an understanding.
Credits:
Created with images by Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper" • Mary Witzig - "Blue Wrapper"