Hedgehog Concept by Jim Collins
This article describes the concept of the Hedgehog Concept by Jim Collins in a practical way. After reading you will understand the definition and basics of this powerful strategy tool.
What is the Hedgehog Concept?
The Hedgehog Concept by the American business consultant Jim Collins shows how a company or person can achieve greatness in business. It is a simple, crystelline concept that is concerned with the understanding of the intersection of three circles.
It’s about the power of simplicity, increasing the chance of success. In his 2001 book ‘Good to Great’, Collins describes the similarities between large organisations like multi national corporations and the Hedgehog Concept. Good to great companies are hedgehogs, in one way or another.
Being successful in business is a result of of many interconnected parts. Jim Collins argues that its essence lies in the solid principle to focus and concentrate on one thing at a time. That enables companies to beat their competitors and grow to become successful business.
According to Collins it takes an average of about four years to fine-tune the Hedgehog Concept within an organisation.
Classic story of the Hedgehog Concept
The Hedgehog Concept is based on an ancient Greek parable about the hedgehog and the fox. The fox can do many things at once. It’s aware of its environment and it’s willy. It can also assess preys from a distance and comes up with different strategies to catch its prey, the hedgehog. The Greek poet Archilochus mentioned about the hedgehog: “the fox knows many things, but the hedgehog knows one big thing.”
It always ends with the fox being thwarted, having to retreat with its nose full of the hedgehog’s spines. The hedgehog can only do one thing and does it perfectly. It defends itself by curling up into a ball and raise its spines. Collins applies the parable to companies.
The people who start large companies and make them successful can be compared to hedgehogs. They focus on one thing. Companies who focus on multiple things at once are the foxes. They can lose focus, which undermines their chance of success.
Despite hedgehogs being slow and less smart compared to foxes, they are able to simplify the world around them. This allows them to focus on a single all encompassing vision.
Three circles within the Hedgehog Concept
According to Collins, the Hedgehog Concept consists of understanding three circles that each start with a question. The intersection of these three circles is called the Hedgehog Concept.
Circle 1: What are you deeply passionate about?
This is about understanding and finding out everyone’s passion within the organisation. What is truly important to the employees?
Circle 2: What can you be the best in the world at?
Here, it’s about understanding why the organisation is good at what it does. Why is it that the organisation does certain things better than other organisations?
The emphasis and focus should be on the organisations strengths. It’s not just about core competencies, but also about competencies that haven’t been achieved within the organisation.
It’s not a bad thing to have weaknesses; an organisation is allowed to have lower scores in certain areas.
Circle 3: What drives your economic engine?
An organisation has to be aware what its economic engine is, which is used to generate revenue and profit. What do they earn money with and what leads to economic progress?
That insight will make clear what will have the biggest and most lasting effect on the company’s long-term success.
Hedgehog Concept and Overlap
Companies have to do more than just follow their passion. After researching the questions from the three circles, the organisation has to determine where they overlap. That overlap is where the Hedgehog Concept can be found; the central vision that supports the organisations strategy.
By answering the questions from the circles, the organisation becomes more self-aware. They can then translate that self awareness into a simple concept that can be used for decision making. That means the Hedgehog Concept isn’t a goal or strategy. It’s about insight and can be a guiding principle for strategic choices.
It can be beneficial for companies to review their existing strategy and ask themselves if things could be done differently.
In order to revise a strategy, it’s a good idea to involve the management team. They have to be told what the Hedgehog Principle means and why it’s important. The organisation bases its strategy on its true passion, talents and economic opportunities.
After identifying the Hedgehog Concept, organisations can start improving by focusing on what they’re best at. This is the preferred route instead of trying to find alternative strategies.
It’s Your Turn
What do you think? What is your experience with the Hedgehog Concept / Hedgehog Principle by Jim Collins? Do you recognize the practical explanation or do you have more additions? What are your success factors for making strategic choices?
Share your experience and knowledge in the comments box below.
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- Collins, J. C. (2001). Good to Great. HarperBusiness.
- Collins, J. C. (2006). Level 5 leadership: The triumph of humility and fierce resolve. Managing Innovation and Change, 234.
- McGrath, D. M., Conway, F. D., & Johnson, S. (2007). The extension hedgehog. Journal of Extension, 45(2).
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