Good to Great
Chapter Five – The Hedgehog Concept
The Parable of the Hedgehog and the Fox
The Fox
The Fox knows many things….
The Hedgehog
….but the Hedgehog knows one big thing.
The Fox
Fast Sleek Fleet of Foot Crafty Cunning A Winner
The Hedgehog
Dowdier creature Waddles Genetic mix-up
between a porcupine and a small Armadillo
The Fox
Waits in cunning silence
Leaps out Lightning Fast Thinks; Aha! Iv’e
got you now!
The Hedgehog Minding his own
business, wanders into the path of the Fox
Sensing danger, thinks; Here we go again
Rolls up into a sphere of sharp spikes
The Fox Bounding towards
his prey…. …. He sees the
Hedgehog’s defense
….. Calls off the attack
Goes back to calculate a new line of attack
The Hedgehog
Each day the same battle….
Despite the Fox’s greater cunning…
The Hedgehog always wins
The Fox
Pursues many ends at the same time
Sees the World in all it’s complexity
Scattered and diffused, moving on many levels
The Fox
Never integrating their thinking into one overall concept or unifying vision
The Hedgehog
Simplifies the World into a single organizing idea… a basic principle or concept that unifies or guides everything
The Hedgehog No matter how
complex the World, reduces all challenges and dilemmas to simple – indeed almost simplistic – Hedgehog ideas
The Hedgehog
For the Hedgehog, anything that does not somehow relate to the Hedgehog idea holds no relevance
The Hedgehog
Hedgehogs are not stupid
Understand that the essence of profound insight is simplicity
Famous Hedgehogs Freud – the
unconscious Darwin – natural
selection Adam Smith –
division of labor Einstein -
relativity
The Hedgehog Concept
Is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles…..
Circle One What can you be the best in the
World at (and equally important, what you cannot be the best in the World at.)
Just because you possess a core competence does not mean that you can be the best in the World at it
Circle One
Conversely, what you can be the best at might not even be something in which you are currently engaged
Circle Two What Drives your Economic Engine
Attain piercing insight into how to most effectively generate sustained and robust cash flow and profitability
Discover the single denominator providing the greatest impact on the economics
Circle Three What Are you Deeply Passionate
About
Focus on those activities that ignite your passion
The idea is not to stimulate passion, but to discover what makes you passionate
The Hedgehog Concept The Hedgehog concept is not a
goal to be the best, a strategy or intention to be the best……..
It is an understanding of what you can be the best at.
The Hedgehog Concept The Curse of Competence
Just because you are making money at it doesn’t necessarily mean you can be the best at it
Focusing solely on what you can potentially do better than any other person is the only path to greatness
The Hedgehog Concept
It is an Iterative process
Good to Great
The Stockdale Paradox
Admiral Jim Stockdale
Awarded 26 personal combat decorations
Medal of Honor and four Silver Stars
Admiral Jim Stockdale Shot down over
North Vietnam Spent eight years
in the “Hanoi Hilton”
Tortured over twenty times
No prisoners rights
Admiral Jim Stockdale Refused to be used
as propaganda
Cut himself with a razor and beat himself so he could not be put in front of cameras
Admiral Jim Stockdale “I never lost faith in
the end of the story”
“I never doubted not only would I get out, but also that I would prevail in the end and turn the experience into the defining event of my life”
Admiral Jim Stockdale
“Who didn’t make it out? The optimists”
Admiral Jim Stockdale “You must never
confuse faith that you will prevail in the end, which you can never afford to lose, with the discipline to confront the most brutal facts of your current reality”
The Stockdale Paradox
The Stockdale Paradox Current Reality
Unemployed Underemployed Lifelines (a.k.a.
“Money”) running low
No responses to resumes
Brutal Facts
WI Unemployment is approaching 10%
Racine is 17.1% Economy lost 7
million jobs – up to 5 yrs to recover
Success
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