To go from good to great requires a deep understanding of three intersecting circles translated into a simple, crystalline concept (the Hedgehog Concept).
- What are you deeply passionate about?
- What you can be the best in the world at?
- What drives your econmic engine?
The key is to understand what your organization can be the best in the world at, and equally important what it cannot be the best at — not what it "wants" to be the best at. The Hedgehog Concept is not a goal, strategy, or itention, it is an understanding.
If you cannot be the best in the world at your core business, then your business cannot form the basis of your Hedgehog Concept.
The "best in the world" understanding is a much more sever standard than a core competence. You might have a compentence but not necessarily have the capacity to be truly the best in the world at that compentence. Conversely, there may be activities at which you could become the best in the world, but at which you have no current competence.
To get insight into drivers of your econmic engine, search for the one denominator that has the single greatest impact.
Good-to-great companies set their goals and strategies based on understanding; comparison companies set their goals and strategies based on bravado.
The good-to-great companies are more like hedgehogs — simple, dowdy creatures that know "one big thing" and stick to it. The comparison companies are more like foxes — crafty, cunning creatures that know many things yet lack consistency.
It took four years on average for the good-to-great companies to get a Hedgehog Concept.
Strategy per se did not separate the good-to-great companies from the comparison companies. Both sets had strategies, and there is no evidence that the good-to-great companies spent more time on strategic planning that the comparison companies.
You absolutely do not need to be in a great industry to produce sustained great results. No matter how bad the industry, every good-to-great company figured out how to produce truly superior econmic returns.
Chapter 5 in Good to Great