Are You Doing What You Do Best? Walgreens Is And So Can You! 

Walgreens realized they could become the best convenience drugstore in the world!

by Rand Manasse

Great companies understand what they do best.

Finding the answer for your company involves a process. You analyze your company and find the brutal facts regarding what it is you are passionate about, what you can be the best at and what will drive your economic engine most effectively.

Jim Collins, author of Good To Great, refers to this as the Hedgehog Concept. It is something every great company has and it is part of the reason they are great.

The Hedgehog Concept is based on a parable of a fox and a hedgehog. The fox attempts to find many different ways to catch the hedgehog, but the hedgehog knows one way to protect itself and it does it very well. You want to be the hedgehog as a company.

Collins proposes the visual of three intersecting circles as a way to define your Hedgehog Concept. These three circles are outlined below. It is only when you find your place where all three circles intersect that you can find your Hedgehog Concept and continue on your way to becoming great.

These are the three steps you can use to determine what makes you the best company you can be.

What can we be best at?

The way this question is worded is key to finding your Hedgehog Concept. You are not asking what you are currently doing well or even what you’re currently best at.

Your team needs to figure out what you can be best at in the world. Once you have the answer you will see if that intersects with the other two circles. then will you have your Hedgehog Concept.

You may need to come back and refine the answer as you work on the three circles. It often takes several iterations before you are able to truly find where the three circles all intersect.

What are we passionate about?

Gather the people in your company that are most connected to the core values. Work together to determine what you are most passionate about. The answer may be what you currently do or it could be something entirely different.

Often, the answer is one of the things you currently do or part of what you’re doing. Whatever the case may be you should all agree what it is you are passionate about as a company.

When you find it you’ll likely be excited as you consider the prospect of doing only what you love and using that passion to fuel a great company.

What drives our economic engine?

The third circle is your economic engine. As part of the three circles process you will figure out what metric is best for managing profit. You might have something you are passionate about and you might be able to be the best in the world at it, but without profit your company cannot achieve greatness.

Every great company analyzed in Good To Great was able to figure out where all three circles intersected. It wasn’t always easy to find the answer and it often took time, but once the companies found their Hedgehog Concept they were able to beat the competition and the market.

Let’s look at one example.

The Walgreens Hedgehog Concept

Walgreens had been around for decades, but in the 1970s they started to define their Hedgehog Concept and in the coming decades they became a truly great company that beat the market many times over.

Walgreens, through discussion, found they could become the best convenience drugstore in the world. They also knew they were passionate about pharmacies. Finally, Walgreens realized that the metric of profit per customer served intersected with the first two circles.

After this realization Walgreens went to work. They delivered the most convenient drugstore experience. Their passion drove them to succeed in this area and because of the convenience more and more customers went through Walgreens stores every day. That led to more customers being served.

Over time Walgreens perfected the concept always focusing on the intersection of the circles. The results have been astounding and they are recognized as a great company.

Conclusion

Do you know what you are best at? How can you tell?

By using the three circles exercise you can find your Hedgehog Concept and become a great company just like Walgreens and others. It takes work, but it is truly exciting to find something you are passionate about and realize that it can also be economically beneficial.

If you still have questions please contact me. Together we can find your Hedgehog Concept and take your company from good to great.

Contact me at 914.741.5200 or rmanasse@referencesystems.com.

To your success!

Rand

 Contact Us  *  Site Map  *  Mailing List  *  Blog  *  © Reference Systems, Inc. 2013 All Rights Reserved                        (877) 341-5200