“The fox knows many things, but the hedgehog knows one big thing.”
– Ancient Greek Proverb
How do you run your company? Are you a know-it-all fox, always going out of your way to make sure everyone knows how smart you are? Forever chasing after whatever new thing scurries into your field of vision? So proud, so clever, so sure you know everything that you’re practically wearing blinders … until a competitor springs a game-changing trap you never saw coming?
Or, are you a hedgehog, single-minded in your devotion to achieving one BIG goal because you know one goal, one target, set by one person – you, the CEO – is going to scale up your business?
In his essential book “Good to Great,” Jim Collins explains how every company that’s ever made that leap did so “by a series of good decisions made consistently with a Hedgehog Concept, supremely well executed, accumulating one upon another, over a long period of time.”
According to Collins, companies that fail to excel “tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent.”
So, if you wasted 2017 prancing and preening like a fox – or worse, as unfocused and scattershot as a chicken with its head cut off – ask yourself these three questions to get back in touch with your inner hedgehog and burrow into the BIG idea that’s going to make your business great in 2018.
1. What you are deeply passionate about?
Effective CEOs focus their time on top priorities that only the CEO execute. None is more important than honing the company’s vision. It’s not enough to want to make money – you have to know what you care about, what you want to accomplish, and the actionable steps that will get you to your goal.
Moreover, in 2018, your customers, employees, and potential new hires all want to feel like their time and money are part of something bigger than profit. Your passion should be so contagious that everyone who comes in contract with your brand wants to become part of the story you’re selling, whether that means buying your goods and services or joining your team to help further the mission.
Ultimately, if you’re not passionate about your business, then why should anyone else be?
2. What can you be the best in the world at?
In “Good to Great,” Collins recalls Wells Fargo’s ill-fated attempt to be the next Citicorp. Once its top brass admitted that they would only ever be a mediocre global bank, Wells Fargo set aside egos, asked itself some tough questions, stripped away everything that wasn’t working, and refocused on what it could be the best in the world at: “running a bank like a business, with a focus on the Western United States.” When Warren Buffet eventually invested $290 million in Wells Fargo, he said it was because, “They stick with what they understand and let their abilities, not their egos, determine what they attempt.” The foxes had learned their lesson, and turned into successful hedgehogs.
CEO Coaching International helped Grasshopper find its own Hedgehog Concept in 2010. Despite being a leader in virtual voicemail, Grasshopper saw stiff competition on the horizon from bigger companies with more robust product offerings. But as we talked through the problem and asked our own tough questions, Grasshopper decided to double down on its core competency rather than try to do things it couldn’t do best.
It worked. In 2015, Citrix purchased Grasshopper for $170 million due to their unique virtual voicemail specialization.
So, forget about the things your company is OK at. Focus on what you’re GREAT at. You could find a new, fruitful niche to dominate, like Grasshopper did. Or, you could end up creating a whole new market space and position yourself way out ahead of everyone else.
3. What best drives your economic or resource engine?
The short answer: cash. You can’t delegate mastery of the numbers that are driving your cash flow cycle. Check your bank balances – weekly or daily if necessary. Keep a close eye on your KPIs, and if they aren’t trending towards your ultimate goals, keep asking questions until you figure out why. Look for ways to tighten up your billing, delivery, and outstanding invoices so that you’re getting paid quicker, or better yet, in advance. If you’re selling to the same customers over and over again, incentivize your sales team to bring in new business.
Anything that’s been dragging down your balance sheet month after month, year after year – like an initiative, marketing campaign, or satellite office that just won’t turn a profit – should be put on the chopping block. In all likelihood, you’ll find the things that aren’t making you money are the things you’re just OK at. The things you can be great at will keep you in the black.
Bringing it all together.
At the intersection of your passions, the things you excel at, and your numbers is your Hedgehog Concept. When you find this concept, Collins says you’ll hear “the quiet ping of truth, like a single, clear, perfectly struck note hanging in the air in the hushed silence of a full auditorium at the end of a quiet movement of a Mozart piano concerto.” No bravado, no ego, no boasting – just you and your company understanding what it can achieve with the right focus.
Now go organize all your activities around this concept, set your targets, track and measure the steps to hit them, and make BIG happen.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. His firm coaches over 150 of the world’s top high-growth entrepreneurs and CEO’s from 17 countries on how to dramatically grow their revenues and profits, implement the most effective strategies, becoming better leaders, grow their people, build accountability systems, and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.