The Hedgehog Concept: Connecting Strategy and Execution for Business Growth
In the pursuit of business growth, execution plays a pivotal role. While topics like strategy, innovation, and capital often dominate strategic planning discussions, execution is sometimes overlooked. Yet, flawless execution can be just as powerful as exceptional strategy. You need both to drive scale or rather, high and efficient business growth.
Like a swimming pool without water—strategy without execution is a pointless endeavour to dig yourself a big hole resulting in disappointment all around. This is where a Business coach can help.
So, how can we connect strategy to execution seamlessly? Let’s explore the Hedgehog Concept, coined by Jim Collins and inspired by an ancient Greek parable “The fox knows many things, but the hedgehog knows one big thing.”
Source: Dall-E
1. The Hedgehog Framework
The Hedgehog Concept, popularized by leadership expert Jim Collins, revolves around three circles:
Passion: What are you deeply passionate about?
Best in the World: What can your organization excel at?
Economic Engine: What drives your economic engine (hint: what would you like more of?)
By finding the intersection of these circles, you identify your path to greatness—the essence of the Hedgehog Concept.
"The good-to-great companies understood that doing what you are good at will only make you good; focusing solely on what you can potentially do better than any other organization is the only path to greatness." - Jim Collins
2. The BHAG (Big Hairy Audacious Goal)
Successful companies have a BHAG—a simple focal point that aligns everyone toward a common destination. It’s the next big mountain to climb, driving growth and fulfilling purpose. Written as a Big Hairy Audacious Goal (or BHAG as Jim Collins phrased it) , the Hedgehog Concept can help an organization to define its BHAG. The BHAG is ambitious, inspiring but achievable over the longer term. Most importantly it is clear enough that once achieved it can be easily ticked off. (e.g. NASA - put a man into orbit or Nike - crush Adidas) The BHAG acts as the connective tissue between strategy and execution and it's easier to determine priorities once the BHAG is nailed.
3. Determine the One Main Thing
With the BHAG in place, agility in a dynamic, uncertain world, becomes easier. Instead of rigid 3 and 5 year long-term plans, focus your thinking on the one main thing that will have a the highest impact on your BHAG the next 90 days. What’s the one main thing you need to go do this quarter to move you closer towards your BHAG? For Facebook in 2005 it was to go Mobile for example. Without this, they would have lost the social media race as the world shifted from PC/computers to mobile.
4. Set Company Priorities
With your BHAG and One Main Thing front and centre, prioritising how you allocate resources, time and focus across the company is much easier.
Less is more. Like New Year’s resolutions, too many priorities lead to inefficiency. Prioritize no more than 3-5 non-operational initiatives. that help the company take positive steps towards it's strategy and BHAG.
Remember we only want to work on high-impact things. Among the 5 company priorities, choose one that is first among all others. Again, a Business coach can help facilitate a good process among leaders to make the right decisions and align priorities.
For instance, if improve gross margin profitability 5% is our Main Thing, then we may choose to set priorities and initiatives that help to speed up processes, reduce cost of sales by renegotiating with suppliers, review pricing strategies and improve productivity.
5. Write as SMART Goals
Now write your priorities as if they are SMART goals - Specific, Measurable, Achievable, Relevant, and Time-bound (SMART).
Assign accountability for each priority to a leader in the team. The leader is not responsible for delivering every task or milestone in the priority, but they are accountable to the leadership for how the priority is progressing and raise any blockers or problems they cannot resolve.
6. Key Milestones
Break up priorities into milestones or smaller tasks and actions with owners responsible for delivering each milestone. Communicate with those responsible owners to define clear due dates and timings.
7. Regular Updates and Engagement
Report progress weekly or more frequently. Engage the entire organization in how to bring the company priorities alive and make them more visible to the organization. Getting creative with themes like this Scaling up client, City Bins did is a good way to emphasise priorities throughout the entire organization. Have some fun with this leveraging movie themes, sporting teams and the numbers!
Remember, the Hedgehog Concept helps you define the BHAG. The BHAG helps you ensure that execution (Priorities, Data, Meetings) are fully focussed around achieving the BHAG, driving focus and disciplines to take positives steps in the right strategic direction. Be the hedgehog, not the fox. Focus and deliver the strategy through exceptional and disciplined execution.
This is where a Business coach can help support your team. If you would like any help nailing your BHAG, Main Thing, Quarterly and Annual Priorities and implementing exceptional Execution habits, please reach out to us here.
