Reading Notes from Excellent to Excellent 5: Hedgehog Thought (Simplified in Three Rings)

Isaiah berlin divided people into foxes and hedgehogs.

The fox pursues many goals at the same time and regards the world as a complex whole. Berlin thought that foxes' thinking was "messy or scattered, and developed at many levels", and they never concentrated their thoughts on a universal theory or unified point of view.

Hedgehog simplifies the complex world into a single organized viewpoint, basic principle or basic idea, which plays a command and guidance role. No matter how complicated the world is, hedgehogs will compress all the challenges and dilemmas into a simple-in fact, almost too simple-hedgehog concept.

Hedgehogs are not stupid. On the contrary, they understand that the essence of deep thinking is simplicity.

So, what is the relationship between talking about hedgehogs and foxes and discussing from excellent to excellent? Very close relationship.

Those elites who realize cross-company are hedgehogs to some extent. They used the nature of hedgehogs to establish what we call the "hedgehog concept" for the company today. The person who leads the company is often a fox and will never gain the advantage of the hedgehog concept.

The essential difference between a leap-forward company and a controlling company lies in two basic aspects: first, a leap-forward company bases its strategy on a profound understanding of three main aspects-we call it the three links; Second, the company that has achieved leapfrogging has turned its own understanding into a simple and clear concept to guide all its work-that is, the "hedgehog concept".

Focus on the focus of the three rings.

1. In what ways are you the best, while avoiding being the worst; This insightful standard far exceeds the core competitiveness. Just having a core competitiveness doesn't mean that you can be number one in the world. On the contrary, the best you can do may not be what you are doing now.

The hedgehog concept is not to be the best goal, the best strategy, the best intention or the best plan. This is the understanding that you can be the best person. This distinction is absolutely important.

Every company wants to be the best at something, but in fact, few companies have keen insight and a clear understanding of getting rid of vanity. They don't realize that they have the potential to be the best. Equally important, they don't know what they can't do best. This is one of the most important differences between companies that achieve leapfrog development and control companies.

Hedgehog concept is not only to develop strength and competitiveness, but also to understand that your organization really has the potential to become the best place and persevere.

Companies that achieve leapfrogging know that doing what they are good at will only make themselves excellent; Focusing on what you have the potential to do better than other companies is the only way to excel.

2. What drives your core engine? All leap-forward companies have keen insight and know how to create lasting and strong cash flow and profit rate most effectively.

What are your core indicators? If you choose one and only one ratio-unit "X" profit (or, in the social sector, unit "X" cash flow)-to achieve long-term systematic growth, what "X" can have the greatest lasting impact on your economic engine?

Do you need a single indicator? No, but trying to get one indicator is more conducive to gaining insight than giving up pursuing three or four indicators. As a mechanism, it forces you to deepen your understanding of the driving force of your economic engine.

This indicator may be very subtle and sometimes not even obvious. The key is to use this indicator to understand and deeply understand your economic model.

3. What are you passionate about? Is to find out what makes you passionate and enjoy the work process itself.

In all the companies that have achieved leapfrogging, passion has become a key part of the hedgehog concept. You can't create passion, so you can't "stimulate" people to feel passion You can only find out what ignites your passion and the enthusiasm of the people around you.

"Growth" is not a hedgehog's idea. If you establish a correct concept of hedgehog and insist on making decisions according to it, you will create great motivation. At that time, your problem was not how to grow, but how not to grow too fast.

The concept of hedgehog is a turning point to realize leap. In most cases, the transition period takes place after several years of applying the hedgehog concept.

How can I get the idea of hedgehog?

When looking for hedgehog ideas for themselves, remember that when leap-forward companies finally master hedgehog ideas, they don't have the stupid and boring bravado and boasting unique to companies.

Council is an important tool to master the concept of hedgehog. The characteristics of the Council are as follows

(1) As a background, the function of the Council is to deeply understand the major issues facing the organization.

(2) The board of directors is composed of leaders and operates, usually consisting of 5 to 12 people.

(3) members of the board of directors have the ability to debate and discuss in order to gain insights, but they do not argue for their own views or protect narrow private interests for individualism.

(4) Members of the board of directors respect each other without exception.

(5) The members of the board of directors come from various departments, but each member has rich knowledge of one aspect of the organization and/or the operating environment of the organization.

(6) The members of the board of directors include the main members of the management team, but are not limited to the management members. Not every member of the leadership automatically becomes a member of the board of directors.

(7) The Council is a long-term institution, not a temporary committee set up for specific projects.

(8) The Council shall meet regularly, at most once a week and at least once a quarter.

(9) The Council does not require unanimity, because unanimous resolutions are often unwise. The final decision is still in the hands of the leadership.

(10) The Council is an informal department and does not appear in any formal organization chart or any official documents.

(1 1) The Council can have a series of possible names, which are usually harmless. Companies that have achieved leapfrogging include long-term profit growth committee, company product committee, strategic thinking group and leading committee.

Summary: The key is to know what your organization can do best in the world, and it is equally important to know what it can't do best-not what it wants to do best. The concept of hedgehog is not a goal, a strategy, an intention, but a feeling.

If you can't be number one in the world in your core business, then it can't form the basis of your hedgehog concept.

Companies that achieve leapfrogging are more like hedgehogs-simple and unobtrusive animals that only know "a big event" and persevere. The control company is more like a fox-a cunning and deceitful animal, who knows a lot, but lacks consistency.

It usually takes four years for the company to realize the concept of buying hedgehog by leaps and bounds.