Are you the Fox or the Hedgehog?

Which one do you want to be- The Fox or the Hedgehog?

The fox knows many things, but the hedgehog only knows ONE big thing that allows it to survive.  It comes from an Ancient Greek parable, whereby, the fox attempts to catch the hedgehog using a variety of strategies that fail.  Ultimately, the fox is defeated because the hedgehog does one thing well: when attacked by its predators, it knows how to safely protect itself by curling into a ball.  Whilst the fox is very cunning and knows many things, it still can’t outshine the hedgehog. 

The analogy here is to devote resources to a single unifying vision and then learn to do what it does really well and also develop the discipline to learn to say NO when other opportunities come your way that doesn’t align with your current business objectives and resources.  

This is known as the Hedgehog Concept and comes from the work of Jim Collins in his classic book from Good to Great. This is a simple yet powerful framework for business and individual success.  Collins argues that businesses that devote themselves to the Hedgehog Concept are more likely to succeed. Furthermore, it helps business avoids spending their limited resources on initiatives that are not in their core focus or competency. In other words, it doesn’t get distracted from chasing too many things at once. There is an old Romanian proverb that says the person that chases two rabbits at once catches neither. And as entrepreneurs, we all tend to suffer from this from time to time, continually chasing shiny things opportunistically.  Those that adhere to the principles of the Hedgehog Concept can build a very successful business, not just a good business, but a GREAT business.

However, it takes focus and a culture of “discipline” to master the Hedgehog Concept. As Bruce Lee once said: The successful warrior is an average man with a laser-like focus.  Collins also argues that the culture of discipline is derived from having “disciplined people” with “disciplined thought” and “disciplined action”. 

It should be noted that the Hedgehog Concept does not provide a blueprint for becoming the best at something, rather it gives insight into what a business could be the best at by identifying three basic tenets: 1) What are you deeply passionate about? 2) What drives your economic engine? And; 3) What you can be the best in the world at?  The overlap of these three principles is known as The Hedgehog Concept and is shown in the figure below.

Good to Great: The Hedgehog Concept – Peter Nakamura

What are you deeply passionate about?

In the first circle, an entrepreneur must clearly understand and define their core values to identify work that inspires them.  Having a deep passion is important in building an authentic and sustainable brand.

What can you be the best in the world at?

Determine what the business can do better than its competitor. Does it have access to unique resources or capabilities or asymmetrical knowledge (i.e., the knowledge that you have that others don’t, such as trade secrets or know-how)? From this, can the business build its competitive advantage to lock out its’ competitors or create a significant barrier to entry?  The business must be honest with itself and be able to confront the brutal facts, to make this happen.

What drives your economic engine?

What are the drivers for profit and cash flow and more importantly, where is it adept at generating revenue?  For example, can it have access to economies of scale in the future, where it can compete on price and/or retain considerable profits?  Whatever the driver, it must have a measurable and sustainable impact on cash flow and profits.

In summary, the Hedgehog Concept provides a simple framework that allows a business to focus on what it could be great at. However, it does not provide a concrete strategy on how an organization might realize success, rather, it just illustrates the process required to identify how the business can be successful by adopting the principles.

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By Tobi Nagy