How would you answer the following questions?
- What could you be the best in the world at?
- What are you deeply passionate about?
- What drives your economic engine? What single denominator has the greatest impact on your finances?
At the intersection of your answers is your “hedgehog concept,” which is one of the key ideas from the business classic, “Good to Great.” Author Jim Collins takes readers on a fascinating journey, exploring how some companies manage to break from their pack of competitors to achieve remarkable, sustained success.
In thinking about how the lessons apply to our personal finances, we’ve explored how to take a Level 5 Leadership approach to managing our finances and confronting the brutal facts about our current financial situation while never losing faith in the better future we envision.
Simple Wins Every Time
The Hedgehog Concept comes from an Isaiah Berlin essay that, in turn, was based on a Greek parable that divided the world into foxes and hedgehogs: “The fox knows many things; the hedgehog one great thing.”
Berlin took the idea further, suggesting that writers and thinkers are either foxes, who see the world in all its complexity, or hedgehogs, who view the world through the lens of one defining idea.
Collins says all companies that move from good to great are hedgehogs, achieving their outstanding results by identifying and then focusing on “a single organizing idea, a basic principle or concept that unifies and guides everything.”
Becoming a Financial Hedgehog
The clearest financial application of the hedgehog concept is how it relates to our work. Stop and think about what you do for a living, or what you might do in the future. What could you be the best in the world at? It might be a type of job, or maybe a specific aspect of a job. What are you passionate about? And what drives your economic engine? In other words, how could you get paid for what you could be the best in the world at and what you’re passionate about?
How to Discover Your Hedgehog Concept
If you can’t easily answer Collins’ three questions and immediately hone them down to a clear hedgehog concept, that’s okay. Keep these points in mind:
It May Take Time. For the good-to-great companies, it took an average of four years to figure out their hedgehog concept. I don’t think it’ll take you that long, but it could take longer than you think.
Others Can Help. Collins advocates the use of a “council,” a group of trusted advisers who are engaged in the dialogue and debate about identifying your hedgehog concept. You could easily do this on a personal level, asking family members and friends to help you. Infuse them with the “brutal facts” of your current situation and guide the discussion around the three questions.
Everyone Has One. Maybe you read the question about what you could be the best in the world at and rolled your eyes. Best in the world? Come on. Collins points out that in the majority of cases, the good-to-great companies were not the best in the world at anything and showed no prospects of becoming so. And yet every one them maintained faith that they could figure it out.
It’s Not About Bravado. Collins says identifying your hedgehog concept is not about boastful ambition; it’s about the simple observation that, yes, I really could become the best at something I’m passionate about, and I could get paid for it.
Other applications
I’ve written about this idea before and the last time I received this comment from a reader named Nancy:
As it relates to a stay-at-home parent, creating a home as a sanctuary from the outside world was my hedgehog. I knew God had honored it when visiting children would walk in the front door and say, “I like it here.” It was the presence of God they were liking. I always felt like I was pushing out against the walls to keep out all the junk that was evil from my home. That means that I was deliberate in what I allowed into the home via any port: TV, books, individuals, radio, music, food, etc. I was a guardian of a sacred trust. It may sound over the top, but I’m one of those who needs a reason to do things, a purpose—and that was mine. It gave the tediousness of the repetitive, mundane work of home engineering relevance, importance.
What a great application of the hedgehog concept!
What are your thoughts? How do you see the hedgehog concept relating to your personal finances or other aspects of your life? Let me know by leaving a comment below.
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