Are you a hedgehog or a fox? In his famous essay “The Hedgehog and the Fox,” Isaiah Berlin divided the world into hedgehogs and foxes, based upon an ancient Greek parable: “The fox knows many things, but the hedgehog knows one big thing.”
Good to Great, by Jim Collins, New York: Harper Collins Publishers, 2001
One of my favorite business books is Good to Great, by Jim Collins. In the book Collins profiles eleven different companies which at the time were considered to be great companies. They knew what they were best at and that’s where they concentrated all their efforts. Granted many of the companies for whatever reason have fallen from the list, but it is my contention that what happened to many of them was a loss of the focus they had in the nineties. They veered from The Hedgehog Concept.
The Hedgehog Concept talks about the fox, who is very clever and can think of several ways to attack the hedgehog. The hedgehog knows one thing, rolling up in a ball of sharp spikes pointing outward. Despite only knowing one way of defending himself, he’s very good at it and he always wins. Collins found that the companies that differentiated themselves were the ones who followed the Hedgehog Concept. Many businesses these days dilute themselves by diversifying too much, hence lacking consistency. Applying the hedgehog concept requires doing three different assessments. 1. What could you be best the in the world at? 2. What are you passionate about? and 3. What drives your economic engine? Companies who operate in the area where these three things intersect are the Good to Great Companies. Therefore, they have true clarity of mission.
The Fall of Circuit City
The demise of one of the Good to Great companies, Circuit City, had a personal impact on me. I had several friends who lost jobs due to the bankruptcy and liquidation in 2008. Circuits City’s reactive posture to increased competition caused them to lose their focus. Most noteworthy, they veered from offering their most popular products, the customer experience at their stores became less personal due to over expansion, and they lost the visionary management team that drove the success of the eighties and nineties. So, they no longer had clarity of their mission. While applying the hedgehog concept might not be applicable to all businesses, the basic idea of focusing on what you are the best at and enjoy doing the most makes a lot of sense to me.