The Hedgehog Concept

Have you ever taken the time to reflect on who you were ten years ago? How are you different today? I have more gray hair. Then, ask yourself where do you want to be ten years from now? In 2015, we constructed our long-term strategic goal to be Top of Mind in the Michigan markets where we serve. Ten years go by fast. I believe we have been successful in most and are trending positively in a couple. At the beginning of this year, we did what I just asked above as we set out to construct our new long-term strategic goal.

We first put together a Strategy Team consisting of our best strategic thinking leaders. The charge was to critically think about who we were 10 years ago and who we are today. We then began asking ourselves challenging questions in order to define where we wanted to go. The discussions we had were real, robust, and filled with candor. We also involved input from our executive leadership team, our board of directors as well as from focus groups within the company.

As part of this process, we leaned into a strategic planning tool developed by Jim Collins, Good to Great author, to guide us. It’s called the Hedgehog Concept and was adapted from an ancient Greek parable. According to the parable, the fox is hungry, cunning, and curious. As he tries to catch and eat the hedgehog, he uses many different tactics. The fox is constantly defeated because instead of knowing many things like the fox, the hedgehog knows one big thing – to curl up into a ball with his spikes out. Collins uses the Hedgehog Concept as a metaphor for business strategies. He argued that companies that focused on one core strategy and stuck to it were more successful than those that were more scattered in their approach. In other words, companies that did not make the jump from good to great did not fully understand their core competency. Nor were they focused on it.

According to Collins, an effective strategic goal is built from an honest understanding of what you can be the best at. It is not simply a plan to be the best. A company’s Hedgehog Concept is at the convergence of the answers to the following three questions: What are you deeply passionate about? To be sustainable, a strategic goal must align with a company’s core values. What can you be the best in the world at? Realistically, where do we truly excel and differentiate ourselves from our competition. What drives your economic engine? The metrics that will define our success.

I am excited to share the outcome from our work in the coming weeks with teammates and clients. Understanding the process we took hopefully will add context once we announce our new strategic goal. I am proud of the intentional work we have done in this area. It’s representative of our growth over the last ten years. Our new goal is SMART – specific, measurable, achievable, relevant, and time-bound. Most importantly it is focused on what we are passionate about and built with a deep understanding of our core competency. Needless to say, we will also focus on it relentlessly over the next ten years.