Hedgehog Concept — Why should you know about it!
Let me narrate to you a small story.
Once upon a time, there was a fox and a hedgehog. As you may expect, the fox was a cunning, smart, and super talented creature. He was able to plan sneak attacks upon the hedgehog. Every day he used to circle around the hedgehog’s den and wait for the perfect moment to pounce.
I know you must be thinking — “Fox is so fast, sleek, and crafty whereas Hedgehog is a dowdier creature who goes about his simple life searching for lunch and going back home. Surely, Fox is a clear winner.”
Hold on!
As the fox waits in a cunning silence to attack the hedgehog at the juncture in the trail while the hedgehog is wandering unaware right into his path, fox thinks — “ Aha, I have got him today”. The moment he leaps out to attack, the hedgehog rolls himself up into a perfect little ball with sharp spikes on the outer, seeing which the fox calls off the attack.
The only thought in hedgehogs’ mind is — “When is he going to learn?”
Based upon a greek parable, Isaiah Berlin divided the world into hedgehogs and foxes.
Foxes are the ones who pursue many ends, know many small things, are flexible and dynamic. Whereas hedgehogs are people who believe in SINGLE central vision that guides decisions for everything else. Example: Amazon focuses on Customer centricity and hence, all the decisions are in accordance with this one big truth of the organization.
“The fox knows many things, but the hedgehog knows one big thing.”
Now, the question is how to derive that one truth to guide every other decision.
The answer lies in 3 important questions.
- What can you be the best in the world at?
You don’t need to know what you can be good at. (Core competency)
But you need to know what you can be best at. And it is equally important to know the brutal fact about what you can’t be best at.
Example: If you learn maths for 7 years, naturally you will be good at Maths. But can you become the best mathematician? If No, then this is not the answer.
Often we confuse our core competence with what we can be best at. That’s called a core competence curse. Your core competence may not lead you to become the best at something. And likely, what you can be best at, you may not have the capacity to do it right now. However, it is important to realize the fact and build an action plan for it.
Jim Collins talks about Kimberly Clark in his book “Good to Great”. The company created a remarkable position for itself in the market competing with the market leader Procter & Gamble (P&G) by realizing the one truth. The truth was — Kimberly Clark can become the best in the world at paper-based consumer products.
Similarly, Wells Fargo realized that it could become the best at running a bank like a business, with a focus on the western United States. (Not the entire world)
A natural thought is — “I can’t be best at anything in the world”. It is important to note that it takes months and sometimes years of iterative thinking, brainstorming, and analysis to come up with this fact.
2. What drives your economic engine?
Profit is important for survival. (And, Cash flows in some other cases)
It is absolutely important to understand what is the factor that drives your economic engine.
Let’s say you are a Shopkeeper. So far you had always looked at your profits as Profit per month. This is the factor you have tried to maximize in the past 5 years. However, lately, you realize that you have the potential to be the best convenience store in New Delhi satisfying all the customers' needs.
Therefore, now you need to focus more on the customer basket and move your economic engine from Profit per month to Profit per customer visit.
The economic engine is not only about understanding whether this can derive me sales, profits, or cash. It is about finding what shall drive your economic engine aligning with your hedgehog.
3. What you are passionate about?
Passion is one the most overused word when talking about a career.
In many cases, people struggle to find their Passion. However, the rule is very simple. You don’t need to find a passion.
Let’s say you work at a loan company. While you may not be passionate about the procedure of providing loans, doing a credit check, and disbursing the loan. You may actually be passionate about helping people finance their dreams like a car, education, and home.
You may be passionate about anything, and it is important to know what it is.
“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. The distinction is absolutely crucial”
— Jim Collins (Good to Great)
When you get your Hedgehog Concept right, it has the quiet ping of truth, like a single, clear, perfectly struck note hanging in the air in the hushed silence of a full auditorium at the end of a quiet movement of a Mozart piano concerto. There is no need to say much of anything; the quiet truth speaks for itself.
Know Thyself.
