As discussed in my last post, the Hedgehog Concept lies at the intersection of the following three circles:

Your company’s Hedgehog gives you a clear understanding of what you can be the best at and it establishes the foundation of the business’s strategy – providing clarity and direction, becoming an essential framework for critical decision-making. 

Identifying and articulating what you are deeply passionate about is the first step in defining your Hedgehog.  As highlighted earlier, a way to express this by defining your company’s Core Purpose.

The second element in the Hedgehog Concept is to define, with egoless clarity ‘What you can be the best in the world at?’

This is about deciding how you can be better than your competitors or what you can do that is genuinely different and sets you apart in the market.  It’s about focusing on this with passion, determination and persistence – developing your muscles until no one else can match the standard or approach you set.

If you haven’t defined what you can be the best in the world at you may find the answer is linked to your Core Competencies, Differentiating Activities or your Brand Promise. Indeed, a way of uncovering this is to ask a handful of your Core Customers what they truly value from your product or service. Digging into your SWOT and/or SWT could also lead to a clue at what you are masters of.  

CMOS,  a commercial cleaning client of ours has narrowed down their Core Competencies to: their ongoing development and mastery of unique systems and processes (which drives industry-beating margins) and their ability to recruit and retain A Players (no mean feat in the commercial cleaning game).  

Together these support their Brand Promise of offering unrivalled customer service. It follows that they believe they are the best in the world at providing the highest levels of customer service to mid-sized business in Auckland and Wellington in their sector.

It’s important to note this is about focusing on what you can be the best at, not what you want to be the best at. It takes a bit of soul searching and brutal honesty to decide what you cannot be good at – yet it is vital to recognise this and not to waste time and money on attempting to develop an unreachable standard in these areas.

Collins stresses in “Good to Great” that if you cannot be the best in the world at your core business, then your core business cannot form the basis of your Hedgehog Concept. 

Establishing and striving to achieve the standards of what you can be the best in the world at is a crucial element in making it possible to effectively live your purpose and drive towards your Big Hairy Audacious Goal (BHAG).

In our next post we’ll cover the 3rd circle ‘ What drives your economic engine”