For most businesses, carrying on the way you have always done things is no longer an option, you need to change and adapt to survive. In this article we take a look at the hedgehog concept and see how that can help us .

The world changes very very quickly. New technology is emerging faster than at any other time in history, and customers are becoming smarter demanding greater value all the time. This makes life for the average business really tough, and you need to stand out from the crowd to succeed.

History tells us that new businesses come along and others disappear. Some businesses become great while others fade away. Success rarely happens by accident. the companies that get there will usually possess vision and a razor sharp determination to reach their goals. The business that carries on doing things the way it has always done them without this focus wont make it to the next level, and in todays market is much more likely to go backwards.

So, whats the secret of becoming a great business?

You can be good at lots of things, but you can’t excel at everything. The companies that will succeed in today’s world are the ones that learn to do a few things brilliantly

Brilliant is defined by the customer and not the business. The business needs to look at what it does from the customer’s perspective and understand what really adds value for him

To be brilliant we must also be passionate. We can’t be passionate about everything, nor can we teach our people to become passionate. We need to understand what our people are naturally passionate about.

Of course there’s a need to make money, so we need to focus on things that will generate a regular healthy income. However, if the customer is getting the things he truly values then generally there is no issue in the business being paid for that value.

The Hedgehog Concept introduced by Jim Collins in his book Good to Great illustrates this nicely. He likens businesses to either foxes or hedgehogs. The fox is cunning, he sees lots of opportunities to eat and is crafty, always trying to take advantage, like the business always on the lookout to make a quick buck, but when trouble comes the fox runs hoping to escape before he is hunted down. The hedgehog, on the other hand, has one source of food and pursues it with determination, he’s a survivor, and when trouble comes he curls up and determinedly defends himself.

In the hedgehog concept, Jim defines three characteristics:

What can you be best in the world at?

Note that the question doesn’t ask “what are you best at?” it looks at what you could be best at if you were to focus all your efforts at it. If you are running a small business, best in the world might feel far too big a challenge, so you might be tempted to replace this with your city, or your state, resist this, and ask what if you really pushed hard could you be world class at. Remember with the internet far more of us are playing in a global market. You cant attack the big boys by doing everything they do, but you can outstrip them in a specific niche by doing that niche brilliantly.

What drives your economic engine?

Financial success comes from delivering real value to the customer that the customer will willingly exchange for money. Great organisations recognise that one KPI drives everything to getting this right. British Airways transformed their business by ensuring every flight took off on time, and it wasn’t unknown for the CEO in person to ask very searching questions when one was very late. What is the one measure that is you work on consistently improving over time will cause you to make money more than any other. Dont constrain your thinking with the obvious metrics for your industry, and think of something that the CEO could act on daily.

What am I passionate about?

We can be good at lots of things, but being brilliant needs passion. Not just passion from the senior management in the business but from all the key people it employs. People become motivated by being able to do the things they are passionate about. You need highly motivated people to become a great business, you need passion to be able to consistently give the customer the things he values most. Being passionate is also about having business values that are at the core of the way the business team works with each other and with clients. These business values need to drive the business plan.

The answers to these three questions are then used in setting the big hairy audacious goal for the organisation, and this, in turn, sets the strategic imperatives that set the business on the road to brilliance.