The Hedgehog Concept

What really is The Hedgehog Concept all about?

That’s a very good question, and one I often get asked. The Hedgehog Concept comes from the book Good to Great, by Jim Collins, and it outlines three questions for organisations to ask themselves.

From understanding what drives your business, what you’re great at and where your passion lies, the Hedgehog Concept should be used to help keep everyone on your business focused and grounded. I also use the same principle to simplify my very challenging and complex work life.


Like the philosopher, Isaiah Berlin, Collins sees the world’s leaders as either hedgehogs or foxes. Hedgehogs only know how to roll up into a spikey ball – and do so without fail time and time again. Foxes try all sorts of tricks to attack hedgehogs, without success – meaning hedgehogs always come out on top. Let’s take a look at the traits of foxes and hedgehogs in more detail.

Foxes vs. hedgehogs

Firstly, you need to ask yourself if your company is a hedgehog or a fox. For example, a retail enterprise that is like a fox tends to pursue many things at the same time, try to be all things to all people and view the world as a complex place. Conversely, businesses that resemble a hedgehog focus on the one thing they are great at and simplify the world’s complexities into a basic concept to ensure they achieve the desired results.

Which one do you think makes you a great retail business? I really hoped you guessed the hedgehog. It’s ok if you’re a fox, though, as every good retail organisation has the ability to become a great business.

The three circles

By now, you’re probably wondering what differentiates a good hedgehog and a great one. The quick answer – a fully developed Hedgehog Concept. Every company has a strategy – but you should focus your efforts on one thing and doing that one thing well to increase your chances of success.

Let’s take a look at the questions from the three circles of the Hedgehog Concept and see how you can apply them to your retail business.

  1. What can you be the best at?

When it comes to the retail industry, everyone wants their products to be the very best of their kind. The truth is that there’s a huge difference in wanting to be great at something and actually being great at it. Remember, you’re not going to offer things that appeal to every individual – and that’s perfectly fine. It’s about defining the areas that aren’t working well and have little success, as well as understanding what makes your business thrive.

  1. What drives your economic engine?

You have to determine the single denominator such as profit or robust cash flow and pick the one thing that has the most sustainable impact on your economic engine. I’m not talking about quick profit or fast cash here. You need to identify the bread-and-butter of your business and make it as solid and sustainable as possible and keep it that way in the long-term to ensure you stay truly great.

  1. What are you deeply passionate about?

Without passion, you will not last in the retail industry, nor will you make a great retail company. Ask yourself if you would still go to work where you are now if you had already earned all the money you need to live till your dying day. If you answered yes because you think of yourself as the luckiest person in the world to do what you do and believe you have something that’s the best it can possibly be (and greater than your competitors), then you have winning passion.

Your Hedgehog Concept

Once you’ve answered all three questions, you need to turn your attention to where your answers overlap. Two out of three isn’t enough. Perhaps you are passionate about your business and your company is the best in what it does but you aren’t making any money from what you sell. Maybe you make lots of money from delivering great products but feel your passion lies elsewhere. Either way, it’s not worth it.

In the business, all three circles have to intersect if you want to succeed in being great. Take note of the great success of top retailer, Lululemon. Not only are they passionate about fitnesswear and make money at it, but they are also the best they can be in it.

You’ve got to have it all – including something you can be great at, the right fuel to drive your economic engine and passion about your work. Your Hedgehog Concept lies at the intersection of the three circles and fulfils all three principles. It may take some time and research, but I can assure you that greatness is only achieved by being consistent and taking a disciplined,  yet simple approach.