As part of Jim Collins’ Good to Great work, he introduces us to the concept of a Hedgehog. The term comes from the famous essay by Isaiah Berlin titled “The Hedgehog and the Fox.” The crux of the story is that the fox is cunning and knows many things while seeing the world in all of its complexity, while the hedgehog knows one big thing and simplifies a complex world into a single organizing idea. As it relates to business, many companies pursue many avenues and opportunities requiring them to be good at many things while other companies are laser focused and concentrate on what they can be the best in the world at.
Most of the great companies of our day have found their hedgehog over a period of time and have outperformed their competition because of it. They then use this simple crystalline concept to guide all of their efforts. As part of the Think Plan Do® Rhythm process, we coach clients to develop this laser focus by allocating time to think and work on the strategic part of the business in monthly, quarterly and annual planning meetings. Below is a snapshot from Rhythm that shows an example of a hedgehog and BHAG or Big Hairy Audacious Goal.
So, what is a hedgehog concept made up of? There are three primary concepts. Jim Collins refers to it as “Simplicity within the Three Circles.”
1.What can you be the best in the world at? This may not be what you are great at today or even one of your core competencies that influence your BHAG. It is more about what you could be the best in the world at (or even the best in your “sandbox”) if you chose to focus and fully commit to it. It may take time to become the best, but you need to be honest in the belief that you can get there. And you also need to be honest about what you could not be best at.
2. What drives your economic engine? What is the one KPI, Critical Number or Economic Denominator that allows you to understand and maximize the economic model of your business and drive profitability and growth? Jim Collins also refers to this as your Profit/X. Understanding this can set you apart form your competition and guide the decisions you make for growth.
3. What are you deeply passionate about? Again, this is not what you are good at but what you have passion for. Are your employees passionate about the work your company does? Would they work for less just to be a part of the team and have the opportunity to participate? People who are passionate about what they do inherently do it best. In most cases, this is the same as a companies’ Core Purpose, their reason for being which can last for a hundred years.
It is the intersection of the answer to these three questions that creates your hedgehog and helps you develop a simple crystalline concept. Continue to ask these three questions of your management team until you figure it out. Jim Collins suggests putting together a council of key executives to use an iterative process of asking the right questions, debating and working until you arrive at an understanding of what your hedgehog is. It may take months or years. The council may meet weekly, monthly or quarterly. The important point is to work on it until you get it right and allocate time to the Think Rhythm. Doing so can drive dramatic results. Start by using the “Five Why” exercise for each question. Once you have your hedgehog nailed, you can use it to develop and support your progress toward your BHAG.
The Rhythm platform supports the development of your hedgehog through the tools in the software and personalized coaching to help leaders discover their hedgehog during their Plan Rhythm or by working directly with teams to facilitate the discovery process.
Commit time to think strategically with your team. Allocate time during your annual planning sessions to revisit your hedgehog and discuss how you are testing it, using it and living it. Make sure your Profit/X is helping you make the right decisions to grow profitably. Make sure your Core Purpose is motivating and inspiring your people to give their best every day. And make sure you are investing energy and resources to mastering the one thing you can be Best at in the World.
Good luck on your journey, Alan
Looking for some more information on BHAG to help get you started? Check out our additional Big Hairy Audacious Goal resources:
How To Create Your BHAG: 3 steps to create your BHAG.