·Strategy & Competition
Section 1
The Core Idea
Jim Collins introduced the Hedgehog Concept in Good to Great (2001), drawing on Isaiah Berlin's essay The Hedgehog and the Fox. Berlin divided thinkers into two categories: foxes, who know many things, and hedgehogs, who know one big thing. Collins observed that the companies which made the leap from good to great were hedgehogs — they found the intersection of three circles and pursued it with relentless focus.
The three circles: (1) What you can be the best in the world at. (2) What drives your economic engine. (3) What you are deeply passionate about. The Hedgehog Concept is not a goal, a strategy, or an intention to be the best. It is an understanding — a crystallisation of what sits at the intersection of all three circles. Companies that found their Hedgehog Concept didn't stumble onto it overnight. Collins found it took an average of four years of disciplined thought for the good-to-great companies to clarify their concept.
The power of the Hedgehog Concept lies in what it excludes. Once a company understands its intersection, every opportunity outside that intersection becomes a distraction — no matter how attractive it appears. Walgreens's Hedgehog Concept was to be the best convenient drugstore, with high profit per customer visit. They turned down seemingly profitable opportunities that fell outside those three circles. The discipline to say no to good opportunities in order to say yes to great ones is the operational expression of the Hedgehog Concept.
The opposite of the Hedgehog Concept is the fox: scattered, diffuse, moving on many levels, never integrating into a unified vision. Collins found that the comparison companies — the ones that failed to make the leap — were foxes. They pursued multiple strategies simultaneously, shifted priorities frequently, and never achieved the clarity that would have allowed them to build momentum. The fox's intelligence becomes a liability when it prevents the focus that produces compounding results.
The concept is deceptively simple and extremely difficult to execute. Most organisations cannot answer even one of the three questions with precision. "What can we be the best in the world at?" is not the same as "what are we currently good at?" The current core competency may have nothing to do with what the organisation could become the best at. Collins emphasised: the Hedgehog Concept requires confronting brutal facts about where you cannot be the best, even if that is where you currently operate.
