TCFBO #013: The Hedgehog Concept

Read Time: 4 minutes

One of the biggest challenges we see small business owners struggling to overcome is an inability to create enough momentum to get their business to where they want it to be.

They may be struggling to increase revenue.

They may be struggling to gain clients.

Or they may be struggling to systemise the business enough to simply be able to take a holiday.

But regardless of the issue they are struggling with, time and again it is the lack of momentum in a particular area which means they keep struggling.

However, a lack of momentum is not the root cause of the problem.

Because the reason they fail to create sufficient momentum is because their focus is dissipated by attempting to focus on too many things at once, or they are focused on the wrong thing.

In short, they’re focused on things that aren’t important to achieve the results they are after.

But even this is not the root cause of the problem.

Because the reason they’re unfocused, or focused on the wrong thing, comes down to a lack of clarity.

They lack the clarity of what they truly want from their business.

They lack the clarity of what they truly want from their life.

And, even if they have clarity in those areas, they often lack a clear plan on how to get there.

Which is why we named our business Clear Focus Consulting because we enable small business owners and entrerpreneurs gain the clarity and focus they need to succeed.

Now, don’t get us wrong.

We don’t just see this challenge in our clients.

We’ve experienced it firsthand.

We’ve been there, done that and got the t-shirt.

And it took us a long time to realise why we were easily creating results in some areas of our life and business and failing so miserably in others.

And sometimes we still get distracted.

But knowing what’s important and being able to focus on a single organising idea enables us to notice when we’re going off track and bring our focus back to where it should be to achieve the results we desire.

Which is where the Hedgehog Concept comes in.

The Hedgehog Concept comes from Jim Collin’s book “Good to Great”, which describes how good companies transition to become great companies, and how most companies fail to make that transition.

In the book he references the ancient Greek poet Archilochus who wrote: “The fox knows many things, but the hedgehog knows one big thing”.

And it’s businesses knowing this one big thing that Jim puts forward as a key reason for the companies he studied going from good companies to great companies.

Because by simplifying a complex world into a single, organising and unifying idea the business had a single overall focus.

This then guided all decisions and they were able to identify anything that didn’t relate to the idea as irrelevant.

Jim describes the Hedgehog Concept as: “A simple, crystalline concept that flows from deep understanding about the intersection of three circles”.

Now, a key point is that this isn’t about coming up with some random ideas driven by your ego.

It’s about having a “deep understanding” of each area.

So let’s look at what’s covered by each of these circles in a bit more detail in Jim’s own words:

“What you are deeply passionate about

The good-to-great companies focused on those activities that ignited their passion. The idea here is not to stimulate passion but to discover what makes you passionate.

What you can be the best in the world at (and, equally important, what you cannot be the best in the world at)

This discerning standard goes far beyond core competence. Just because you possess a core competence doesn’t necessarily mean you can be the best in the world at it. Conversely, what you can become the best at might not even be something in which you are currently engaged.

What drives your economic engine

All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular, they discovered the single denominator—profit per x—that had the greatest impact on their economics.”

So how do you identify your business’ Hedgehog Concept?

The first thing we would recommend is stepping into your business vision and really embodying it.

Use your imagination to make this future reality feel as if it is your present-day reality.

By doing this you will be in a state where you can feel whether the answers you come up with for each of the three circles are aligned with what you truly desire for your business and life.

Once you’re in this future reality, look at each circle of the Hedgehog Concept in turn.

What are you deeply passionate about in this future reality?

Here’s a clue…it’s almost certainly what you are deeply passionate about already.

What are you the best in the world at in this future reality?

As Jim says, it may not be something you are currently engaged in.

What drives your economic engine in this future reality?

What is the “x” in your profit per x?

Is it profit per customer?

Profit per product?

Profit per employee?

Profit per hour?

Profit per location?

Or something else entirely?

Rather than looking at all three circles all at once and how they intersect with each other, focus on one circle at time.

You may revisit the same circle over several days, weeks or months, each time gaining a deeper understanding.

Then once you’ve got answers for each circle, you can consider where and how they intersect with each other.

Don’t be in a rush. Your single organising idea, your Hedgehog Concept, may take time to reveal itself fully.

But as it does become clearer, you’ll gain focus, increase momentum and create results in your business faster.

Let us know how you get on and we’ll see you next week.

Paul & Philly

P.S. You can read more about the Hedgehog Concept on Jim Collins’ website here: https://www.jimcollins.com/concepts/the-hedgehog-concept.html

Whenever you’re ready, there are two ways we can help you:

1. Discover how to create a life and business you truly love with your copy of “Backwards Planning - A Simple Method to Move You and Your Business Forward” from Amazon.

2. To work with us through the entire “Backwards Planning” process outlined in the book, you can apply to join The Clear Focus Business Academy.

The first step is to book a facilitated Life Vision Session which we conduct one to one over Zoom. This session will not only give you clarity on what you want from your life but will give you the opportunity to experience how we work and ensure we're a good fit for each other before deciding whether The Clear Focus Business Academy is right for you. It comes with a 100% money back guarantee, so if you're not entirely satisfied, simply let us know at the end of the session and we'll issue a full refund.