Lead Worship

Good to Great – Chapter 5: The Hedgehog Concept

Posted on August 29th, 2008 by Brian Sparks.
Categories: Book Notes, Good to Great, Leadership.

“Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. It doesn’t matter how complex the  world, a hedgehog reduces all challenges and dilemmas to simple-indeed almost simplistic – hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance” (page 91).

“No, the hedgehogs aren’t simpletons; they have a piercing insight that allows them to see through complexity and discern underlying patterns. Hedgehogs see what is essential, and ignore the rest” (page 91).

“Those who built the good-to-great companies were, to one degree or another, hedgehogs. They used 4their hedgehog nature to drive toward what we came to call a Hedghog Concept for their companies. Those who lead the comparison companies tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent” (page 92).

“In a world overrun by management faddists, brilliant visionaries, ranting futureists, fearmongers, motivational gurus, and all the rest, it’s refreshing to see a company succeed so brilliantly by taking one simple concept and just doing it with excellence and imagination. Becoming the best in the world at convenient drugstores, steadily increasing profit per customer visit-what could be more obvious and straightfoward?” (page 93).

“More precisely, a Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles:

1. What you can be the best in the world at (and, equally important, what you cannot be the best in the world at).
2. What drives your economic engine.
3. What you are deeply passionate about. (page 95-96).

“Suppose you were able to construct a work life that meets the following three tests. First, you are doing work for which you have a genetic or God-given talent, and perhaps you could become one of the best in the world in applying that talent…Second, you are well paid for what you do…Third, you are doing work you are passionate about and absolutely love to do, enjoying the actual process for its own sake” (page 96).

“A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at” (page 98).

“Just because something is your core business-just because you’ve been doing it for years or perhaps even decades-does not necessarily mean that you can be the best in the world at it. And if you cannot be the best in the world at your core business, then your core business cannot form the basis of your Hedgehog Concept” (page 99).

“The Hedgehog Concept requires a severe standard of excellence. It’s not just about building on strength and competence, but about understanding what your organization truly has the potential to be the very best at and sticking to it” (page 100).

“To go from good to great requires transcending the curse of competence. It requires the discipline to say, “Just because we are good at it-just because we’re making money and generating growth-doesn’t necessarily mean we can become the best at it.” The good-to-great companies understood that doing what you are good at will only make you good; focusing solely on what you can potentially do better than any other organization is the only path to greatness” (page 100).

“Our study clearly shows that a company does not need to be in a great industry to become a great copany. Each good-to-great company built a fabulous economic engine, regardless of the industry. They were able to do this because they attained profound insights into their economics” (page 104).

“But throughout the good-to-great companies, passion became a key part of the Hedgehog Concept. You can’t manufacture passion or “motivate” people to feel passionate. You can only discover what ignites your passion and the passions of those around you” (page 109).

“The good-to-great companies did not say, ‘Okay, folks, let’s get passionate about what we do.’ Sensibly, they went the other way entirely: We should only do those things that we can get passionate about” (page 109).

“What’s so striking about the comparison companies is that – for all their change programs, frantic gesticulations, and charismtic leaders-they rarely emerged from the fog. They would try to run, making bad decisions at forks in the read, and then have to reverse course later. Or they would veer off the trail entirely, banging into trees and tumbling down ravines. (Oh, but they were sure doing it with speed and panache!)
“For the comparison companies, the exact same world that had become so simple and clear to the good-to-great companies remained complex and shrouded in mist. Why? For two reasons. First, the comparison companies never asked the right questions, the questions prompted by the three circles. Second, they set their goals and strategies more from bravado than from understanding.
“Nowhere is this more evident than in the comparison companies’ mindless pursuit of growth: Over two thirds of the comparison companies displayed an obsession with growth without the benefit of a Hedgehog Concept. Statements such as ‘We’ve been a growth at any price company’ and ‘Betting that size equals success’ pepper the materials on the comparison companies. In contrast, not one of the good-to-great companies focused obsessively on growth. Yet they created sustained, profitable growth far greater than the comparison companies that made growth their mantra” (page 111).

“If you have the right Hedgehog Concept and make decisions relentlessly consistendt with it, you will create such momentum that your main problem will not be how to grow, but how not to grow too fast” (page 112).

“The Hedgehog Concept is the turning point in the journey from good to great. In most cases, the transition date follows within a few years of the Hedgehog Concept” (page 112).

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