Keeping with my theme of blogs; Fish, Eat the Frog, Sacred Cows, and Who Moved My Cheese?, I thought it appropriate to discuss the “The Hedgehog Concept“.

For those of you that have read “Good to Great’ written by Jim Collins, you will be aware of this concept. It refers to the tale of a hedgehog and a fox where the fox knows many things, but the hedgehog knows one big thing. According to Collins, the good to great companies were by and large built by “hedgehogs”. This does not necessarily mean by those that did not have a broad knowledge, but by those that were able to focus on one big significant thing that made their companies great. Sometimes it takes a real mastermind to see through all the clutter and take that one unique simply thing that gives you an advantage.

The ‘three circles’ is an idea regarding how to find your “hedgehog concept”. Think of three interlocking circles, the first represents what you are passionate about, the second one represents what you can make money at, and finally the third one what can you be the best at. At the intersection of these three things lies the winning target. If you can bring all three things to bear, you have found a way to excel. It is also important to realise as well what you will never be the best at, those are things you must avoid, if possible.

Let’s look at the three circles and examine how they may be applied to your business or circumstances.

1. What are you passionate about?

Think about what makes you passionate at work. What gets you up in the morning and keeps you working late.

2. Understand what you can be the best at

What is it that your business can do better than any other? You also need to know what you’ll never be the best at. Be honest when considering these weaknesses, and remember that not being the best in certain areas is OK. Understanding what your business can be good at is far more powerful.

3. What is your economic driver, what can you make money from?

It is important that you are able to measure and understand what generates your cash flow and profitability. This could be either the type of customer, or the type of product/service that you provide. Whatever it maybe you must be able to measure it.

The hedgehog concept as discussed in Jim Collins book helps your organisation focus on three main areas – passion, talent and the economic engine. By understanding each of these dimensions and, more importantly, how they intersect, you can identify the key focus that will guide your organisation towards meaningful, long-term success.