The Hedgehog Principle – Good to Great Revisited

Great leaders don’t just motivate and inspire; they also bring focus and clear direction. The great companies are no different; they are focused and know exactly what they should be doing and, consequently, avoid wasting energy, money and talent on things that are not core to their business.

In the famous scene from City Slickers, actor Jack Palance tells Billy Crystal that the secret to happiness is “one thing.” The key, though, is that each of us has to take the time to figure that out. The same is true of companies. If a company is unclear on its purpose and what exactly its core business is the odds of great success are minimal. On the other hand, the hard work and thinking and debating that enables a company to figure out what business they are in is worth it in the long run.

The elements that Collins recommends a company (or a team) think through are these:

  1. What can we be the best in the world/our space at?
  2. What are we passionate about?
  3. How do we make money?

I wonder how many of us have taken the time to work through these questions.

How many of us know what we can be the best at? How many of us focus on that? Or, how many of us are trying to be good at many things and are fragmented in our energies, pursuing every shiny object and opportunity that comes along. Dare to focus. Dare to specialize. Dare to say, “No” to certain opportunities.

How many of us and our teams are united around their passion, what they truly care about and love doing? In our company, we use the phrase: changing lives one job at a time. That’s what we do. We get good people good jobs and out of that comes all kinds of goodness and benefit. The moment we began adding to that “and we also do hamburgers” we are set up to fail. A strong brand is a single focus and a strong rallying point because it calls out to what inspires us.

How many of us even know how we make money? What is the key number or ratio that defines financial advancement? Too many companies operate in confusion on this and track so many numbers the reports cease to be meaningful (or read). Instead, find the very few metrics that tell you what you need to know. Then focus on those.

These three ingredients: being the best, passion and vital economics will help you and your team focus on what really matters and, out of that focus will come the success you long for. This is the hedgehog principle.

Try it. Put in the hard work to figure out your “one thing.”

Mike Baer

Mike Baer was one of the early leaders in the modern Business as Mission (BAM) movement. He is the Chief Development Officer of EmployBridge, a $3.2 billion employment company based in the US. Mike is the Co-Founder of ThirdPath, a global company that helps Christians become entrepreneurs. He has written 3 books on BAM: Business as Mission, BAM for the Rest of US, and Gospel Entrepreneur. Today Mike and his wife reside in the mountains of North Carolina where they enjoy their 5 grandchildren.

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