Hedgehog Concept (IM 731)

Jim Collins, in his book Good to Great, describes a concept followed by companies that achieved greatness. He claimed that just as a hedgehog focuses on one big thing, companies that aspire to become great must focus on their central strength. This idea is called the “Hedgehog Concept.”

The concept is represented by the intersection of three circles, built around three important questions:

• Understanding what you can (and cannot) be the best at.
• Knowing what drives the economic engine.
• Defining what you’re truly passionate about.

Companies like Walgreens, Coca-Cola, Circuit City, Gillette, and Kroger attained greatness by aligning themselves with this concept and bringing breakthrough results.

Knowing the answers to these three questions—and operating consistently at their intersection—can build a great company.