Good to Great: Chapter 5 THE HEDGEHOG CONCEPT (Simplicity within the Three Circles). Group 4 Carly Buell Ryan Buell Brian Cote Shana Hartford April Miller Brittany Snethkamp Austin Stewart. Are you a Hedgehog or a Fox?.
In his famous essay “The Hedgehog and the Fox,” Isaiah Berlin divided the world into hedgehogs and foxes, based upon the ancient Greek parable:
“The fox knows many things, but the hedgehog knows one big thing.”
Jim Collins uses the parable to illustrate the need to organize a complex world into a few simple principles or actions.
A fox is a clever animal able to devise many tactics for attacking the hedgehog. Everyday the fox looks like he has another brilliant strategy to win his prey. The hedgehog, is a slow creature who’s defense is the same no matter how the fox attacks. Everyday the fox thinks, “Aha, I’ve got you now!” But everyday no mater what approach, as soon as the hedgehog senses danger he thinks, “Here we go again. Will he ever learn?” and rolls into a ball of spikes. Because its defense is simple and consistent, the fox never gets the hedgehog.
While the fox tried everything to succeed, the hedgehog focused on only one thing - the thing that he did best.
-Einstein and relativity E=mc²
-Freud and unconscious mind
-Adam Smith and division of labor
-Karl Marx and class struggle
All took a complex world and simplified it.
“Those who built the good-to-great companies were, to one degree or another, hedgehogs. They used their hedgehog nature to drive toward what we came to call the Hedgehog Concept for their companies. Those who led the comparison companies tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent.”
Recall creating a Blue Ocean is made up for four different aspects: Eliminate, Reduce, Raise, Create
It’s asking the questions of what assumptions are still relevant / what needs to be changed, and involves a constant re-examination of what constitutes an organization’s hedgehog concept.
The things an organization can’t be best in should be eliminated or reduced. The things it can be the best in should be raised or created.
The Difference Between Good-to-Great and Comparison Companies
Founded their strategies on deep understanding along three key dimensions – the three circles.
Translated that understanding into a simple, crystalline concept that guided all their efforts – the Hedgehog Concept.
What You Are Deeply Passionate About
What You Can Be The Best In The World At
What Drives Your Economic Engine
The Good-To-Great Companies and the “Best in the World at” circle of the Hedgehog Concept
Fannie Mae was passionate about helping people from all walks of life live the American dream by owning their own home. Not necessarily passionate about the mechanical process of packaging mortgages into market securities.
Great companies ask themselves: