Hedgehog Concept Examples: How a Hedgehog Supports a BHAG

Does your who do what? It sounds somewhat funny, but this is a serious question. Many people know what these terms are, but here is a brief refresher for those who still need to. These terms come from author and management consultant Jim Collins in Good to Great.  You can find great BHAG examples on our middle market CEO blog to help you take your company from good to great.  The hedgehog concept's main gist is to find the intersection of your passion, financial drivers, and where you can be the best in the world in your organization.

A Hedgehog looks like this pictorially:

The first circle comprises what you and your company are passionate about. We often refer to this as your Purpose/Passion. It is a proven fact that if you and your people are doing the work they are passionate about and have a higher purpose other than just making things or money, they will be very good at it and give it their best effort.

The next circle is what you can be the best at in the world. This may be something you could be better at today, but it is something you believe you have the potential to become the best at. This may come from a core competency or something else that can set you apart in your market.

The third circle is your Profit/X, your number one economic indicator that helps guide your decisions for profitable growth. Making this strategic decision will cause you to think differently about your business.

Hedgehog Principle

It is the intersection of these three circles that make up the Hedgehog. The term comes from an old fable that describes the fact that the hedgehog does one thing day in and day out and does it very well. Too many companies try to be all things to all customers and do a lot of average activities rather than excelling with a more focused offering. Research has shown that companies that spend the time figuring out and refining their Hedgehog outperform their market rivals tenfold. It takes time to get it right, but the payoff is enormous.

A BHAG is the Big Hairy Audacious Goal you set for the company 10 to 25 years out. Your Mount Everest to climb inspires and motivates your team to achieve great things.

So, back to the original question in the title of this blog: Does your Hedgehog support your BHAG? It should be because the culmination of these three items will help and enable you to achieve your BHAG.

Let us look at an example I helped one of our clients develop. We have been massaging this for the past year, and we have it. Jim Collins states it may take three years to nail your Hedgehog. In addition, you might be lucky and get it right sooner. I have changed a few words to protect the innocent (and the client), but you will get the gist of it.

Hedgehog Concept Examples

Purpose/Passion: To envision, design & manufacture innovative products that make the job safer, easier, and faster for the working.

Best in the World At We see what others overlook to design & manufacture superior XXXX products.

Profit/X: % Gross Profit/Product

This Hedgehog supports this BHAG: To grow a global organization of XXXX companies that manufacture innovative products to solve unique customer needs, growing us to $50M by 2030 with a GP >XX%.

Notice how the Hedgehog supports the BHAG. There are so many elements at work here that hit the mark. Let us look at a few.

Purpose/Passion—Appeal to a higher meaning by making innovative products that make work safer and more accessible for the workingman. People can understand this every day they come to work. It will attract individuals who desire to do this and retain those who believe it is essential.

Best in the World At—I think the key here is that this team sees “what others overlook and takes an innovative approach to design and manufacturing.” Engineering curiosity and interest are needed to understand the work to develop a unique solution.

Profit/X—Understanding the percent gross profit on each new product will help determine whether to proceed with it or enter a new market space. This is the guiding economic indicator we want when making these growth decisions.

This leads to a BHAG that builds on these concepts, has a defined date, and has a numerical component that lets us know when we get there.

So, look at your Hedgehog and see if it will help your company achieve its BHAG (includes infographic). If you need help, keep working at it until you perfect it.

Finding the right hedgehog to support your BHAG is crucial for achieving long-term success and growth in your organization. By aligning your passion, core competencies, and economic indicators, you can create a focused strategy that will propel your company towards its Big Hairy Audacious Goal. It may take time to perfect your Hedgehog, but the payoff is well worth it. If you need help refining your strategy, don't hesitate to reach out for assistance. Keep working at it, stay focused, and execute well to turn your vision into reality. Good luck on your journey to greatness!

Good luck and execute well, Alan