Harpoon Harbor Rants, Raves and Downloadable Hoagies

The Hedgehog Concept

I recently finished Jim Collins' Good to Great.  Throughout the book I wanted to immediately get on here and start preaching about the brilliance of the ideas.  Knowing that I would only log on and fill a raving post with tons of superlatives, I decided to digest it a bit before sharing my thoughts.   It's been a long time since a business book has resonated so profoundly with me.  The last one I can remember having a similar impact was Chris Anderson's The Long Tail. Having said that (yes, I saw the CYE finale), Good to Great is head and shoulders above anything I've read to date.  The hybrid of brilliance and simplicity, coupled with the empirical data gathered to support the findings has convinced me of its genius.  The book is not new, I'm just late to the game.

Good to Great is a study in what characteristics are found in companies which outperformed their competitors and comparison companies.  The basic tenant is that there are plenty of "good" companies out there, but "great companies" are far less common.  The most surprising thing that I take away from the book is the basic and fundamentally sound concepts which differentiate the two.  Expecting lots of jargon, terms and theory way above my head - Good to Great is anything but that.

There are more comprehensive reviews and summaries available on blogs which are written better than I could hope to, so I've included some links below if you're interested in learning more.  All I'll  try to do below is summarize one piece of the Good to Great puzzle - "The Hedgehog Concept."  "The Hedgehog Concept" is one of the core differentiators between "good" and "great" companies.

"The Hedgehog Concept" is similar in it's idea to Aesop's fable "The Tortoise and the Hare":

One day a hare saw a tortoise walking slowly along and began to laugh and mock him. The hare challenged the tortoise to a race and the tortoise accepted. They agreed on a route and started off the race. The hare shot ahead and ran briskly for some time. Then seeing that he was far ahead of the tortoise, he thought he'd sit under a tree for some time and relax before continuing the race.

He sat under the tree and soon fell asleep. The tortoise, plodding on, overtook him and finished the race. The hare woke up and realized that he had lost the race.

Collins uses a fox and a hedgehog.  The basic concept is that a fox will try anything and run all over the place to protect itself and thrive in its environment, while the hedgehog does one thing really well: the hedgehog curls up into a ball and is confident in its ability to do that.

Collins and the Good to Great research team (which he credits early and often throughout the book) suggest that for companies to make the leap from "good" to "great," they must first recognize their "Hedgehog Concept."  How you get to your "Hedgehog Concept" is not easy, but it revolves around answering three questions:

What can we be the best at in the world?
What drives our economic engine?
Where is our passion?

While perhaps simple questions, it is not possible to just answer them and declare that you have a "Hedgehog Concept."  It takes long and careful deliberation with advisors and stakeholders to truly establish one.  I love the idea of taking all the complexities of business and focusing on one core idea.  The simplicity is genius.  Good to Great certainly does not ignore the execution, management and attention to detail which are also obviously required to make this work. However, having that one simple concept is what I truly believe should be the driving force for most companies.

One example of a "Hedgehog Concept" that Collins discusses is Walgreen's.  Walgreen's (a company I love, and in hindsight it has a lot do with their simplicity) has a "Hedgehog Concept" which is to "to run the best, most convenient drug stores with high profit per customer visit."  Easy, right?  Easy to say, difficult to execute, particularly on the scale they do.  That's where the remainder of the book's ideas come in.  I wont attempt to outline this any further, but hopefully you're interested in learning more...

If you enjoy business ideas and learning more and more about what makes companies "great," do yourself a favor and check out Good to Great. I'll warn you now that Collins and his team use Fannie Mae as an example of a "great" company, do not be discouraged given the events of the last two years.  The ideas are valid.

Below are some resources for more information on the ideas of Good to Great:

Citrix Blogger - The Hedgehog Concept

Jim Collins - The Hedgehog Concept and more (audio/video)