The Hedgehog Concept – How focusing on what you can be the best at leads to monumental growth

“A fox knows many things, but a hedgehog knows one big thing”.
Ancient Greek poet, Archilochus 

 

Whether these exact words were ever spoken by Archilochus, we will never know for sure. But one thing we can be certain of, this is a tale that holds true and can be applied with great effect to this very day.
 
“The fox uses many strategies to try to catch the hedgehog. It sneaks, pounces, races, and plays dead. And yet, every time, it walks away defeated, its tender nose pricked by spines. The fox never learns that the hedgehog knows how to do one big thing perfectly: defend itself.”
 
The tale of the hedgehog and the fox has been reimagined and can be seen both intentionally and unintentionally to almost everything you could imagine throughout history. From the war on drug smuggling into the USA, to personality traits of great leaders and everything in between.
 
Where it has perhaps yielded the most success however, is in the world of business. In Jim Collins’ seminal business book Good to Great, Jim presents The Hedgehog Concept and how it can be applied to your business to drive exponential growth. Today we will be understanding how this is possible, and why the hedgehog always wins.

 

Concept of the hedgehog

In its most simplistic form, The Hedgehog Concept equates to this: “You can’t be everything to everyone, and why would you want to be?”.
 
Instead, focus on what you do best and what you are deeply passionate about. I would wager you don’t know a single person who is deeply passionate about everything they touch. It would be impossible, and rather tiring to say the least.
 
I would, however, bet a good amount that you will know many people who are deeply passionate about one or two things, their passion drives them forward and they do them very well. From expert carpenters, to solicitors and everything in between. The pursuit of greatness can often be found most within the overlap of the three circles of The Hedgehog Concept, and right in the overlap is where you will find your hedgehog.
 

What are you deeply passionate about? 

 
We all know the saying “Do what you love and you’ll never work a day in your life”. Well here is a similar thought for circle number one, “Do what you are deeply passionate about and you will see transformational growth in your business”. Passion is one of those intangible, intense feelings that gets brandished around in the business world. However, it is critical for leading a business into becoming a successful hedgehog.
 
Discovering what you and your employees are deeply passionate about can be a cathartic experience of discovery, and one that will ultimately help your business grow. It needs to be authentic and genuine.
 
Based on ‘why’ the business does what it does. It should feed into the businesses values and mission statement. It can’t be forced or faked. It needs to be authentic. It’s a journey to discover what the business is most passionate about. Once a business taps into it, the passion can be extremely powerful in steering the direction of the business and to keep it focused on doing what it does best. Giving employees a sense of belonging and enhancing the company culture, all at the same time.
 

What can you be the best in the world at? 

 
To truly understand what you are best at, you have to understand what you aren’t the best at. Diversifying products and services for a business often leads to the opposite of what you would expect. It can devalue the brand and dilute the business. Of course, there is much more to being the best in the world at something than understanding what you are not good at. Let’s wade in a little deeper into Circle number 2.
 
If you’re aiming to be the best at something, being ‘good’ will not be enough. Let’s take restaurants for example. Let’s say, you run a restaurant on your local high street. It could be very good with overwhelmingly positive reviews, but also exist with restaurants that are even better than yours in the local area. To evolve into being the best, you have to focus solely on what you can do better than all of those other restaurants on the high street.
 
To become a successful hedgehog – and let’s be honest, who doesn’t want to be the best hedgehog in the world –  there needs to be an understanding that it is not about what you want to be the best at, it’s actively identifying what you are or can be the best at and relentlessly pursuing greatness within this.

 

What drives your economic engine? 

 

This circle is all about awareness. Being self-aware of what products or services make up a business’s economic engine. These are what drive revenue and profit for the business. Each company may have a way of measuring profit, this could be per employee, product, or per customer.
 
There is no one single measurement that fits every business. The key here is for each business to dig deep and find their economic measurement. Once this has been found it will lead to a deeper understanding of what drives a businesses economic engine.
 
Focusing on one of the three circles individually is powerful, but the real growth can be found in the overlap of these circles. Within here is where you will find the formula to become a successful hedgehog and outwit those pesky foxes which are disguised in the form of your competitors.
 

Hedgehogs in the wild – real life examples 

 
Let’s take a look at a business that has seen exponential growth since its inception, thrives both in brick and mortar stores and through e-commerce, is deeply passionate through every level of the business, and absolutely makes no attempt to appeal to everyone.
 
Lush cosmetics often divides opinions. Their target audience regularly flock to their stores to spend £30 on glittery bath bombs, while most other people give the entrance to the store a wide birth as to avoid a headache from the overpowering smells emanating from the always open doors.
 
Lush of course knows this, but they stick to what they are deeply passionate about, what it is the best in the world at, and absolutely what drives its economic engine. Focusing on those who love Lush. And forgetting those that don’t.
 
Lush currently has over 900 stores in 49 countries and turnover of almost £1b, all from a failed pitch to The Bodyshop, trying to get them to stock Lush bath bombs.
The business found growth through its (at the time) relatively niche market of people who wanted cosmetics that among other things, looked good enough to eat, were cruelty free, and contained only raw organic materials. Pair this with a distinctive and their hedgehog was ready to take the world by storm. One bar of soap at a time.
 
 

Dyson

 

Sir James Dyson has been in the spotlight for a number of reasons over the past few years, here we are going to focus on how a company that embraces the hedgehog concept can tap into growth and overcome obstacles and naysayers that stand in their way.
 
“No one will ever pay £300 for a hairdryer when you can buy a good one for £35.” Well it turns out if you are passionate enough and can create a good enough product, a lot of people will. And by a lot, we mean a lot.Their Supersonic hair dryer drove a 45% increase in sales and a 33% increase in profits since the year of its launch. This might be seen as diversification for Dyson, but really it is another high-end, high-performance home electrical good that people want in their house. The same goes for their range of fans, some of which are priced at £600.
 
The next challenge is just around the corner for Dyson. James Dyson recently announced that he plans to launch an electric vehicle (brace yourself Elon). And here is where the hedgehog concept comes under strain. The more that businesses move away from what they currently do best, the greater the chance of problems emerging. You may be thinking that diversification and The Hedgehog Concept don’t go hand in hand. Let’s clear that one up.
 
Dyson currently has no production plant, no chassis, no safety rating, but it does have an extremely ambitious time frame. One that is being sniggered at by established car manufacturers around the world. An electric car isn’t a million miles away from precisely engineered electrical goods, but it’s not quite the same as launching a Dyson toothbrush.
 
Large hedgehogs like Dyson are slower than foxes, they do less, but they do it better. They simplify the world around and focus on a single, coherent vision. One that can be felt right through the business and radiates out to consumers who buy their products. Foxes focus on multiple things at a time. They can lose focus, and with it lose the opportunity to achieve greatness. If Dyson focuses only on producing an electric car and engineers it in the same way it has done for all their other successful products, who are we to say they will fail?
 

It’s Your Turn

 

As we conclude this exploration into hedgehogs and foxes, take time to think about and write down your answers to the three circles:
 
What are you deeply passionate about?
 
What drives your economic engine?
 
What can you be the best in the world at?
 
Be authentic, be realistic, be thorough and you will be taking the first step to taking your business from good to great.
 
Of course, if you need any help along the way, you know where we are.

 

The Hedgehog Concept was devised by Jim Collins, in his book Good to Great.