Session 4 Handout

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“From Good to Great”… in a Christian context

Session 4: The Hedgehog Concept (Simplicity within the Three Circles)

John 5:19 Jesus gave them this answer: ‘Very truly I tell you, the Son can do nothing by himself; he can do only what he sees his Father doing, because whatever the Father does the Son also does.

Are you a hedgehog or a fox?

“To go from good to great requires a deep understanding of three intersecting circles translated in to a simple, crystalline concept (the Hedgehog Concept)

“To quickly grasp the three circles, consider the following personal analogy. Suppose you were able to construct a work life that meets the following three tests.

1.

You are doing work for which you have a genetic or God-given talent, and perhaps you could become one of the best people in the world at applying that talent. (“I feel that I was just born to be doing this.”)

2.

You are well paid for what you do. (“I get paid to do this? Am I dreaming?”)

3.

You are doing work you are passionate about and absolutely love to do, enjoying the actual process for its own sake. (“I look forward to getting up and throwing myself into my daily work, and I really believe in what I’m doing.”)

If you could drive towards the intersection of these three circles and translate the intersection into a simple, crystalline concept that guided your life choices, then you’d have a Hedgehog Concept for yourself.”

The Best”: A Hedgehog concept is NOT a goal or strategy or intention or plan to be the best. It is an understanding of what you

can be the best at.

Economic Engine”: Each Good-to-Great company had a single “Economic Denominator”. If you could pick one ratio ‘Profit per x”, to sytematically increase over time, what would the ‘X’ be?

Deeply Passionate”: What makes you tick. What do you get excited about? The product?; The ethos?; The outcomes?: etc

How would you score yourself on these three tests, in your current role at work? 0= FULLY DISAGREE and 10=FULLY AGREE

1. 2. 3.

How would it be possible to raise your scores? DISCUSS!

LUKE CHAPTER 10 VERSES 38-42

Now as they went on their way, Jesus entered a village. And a woman named

Martha welcomed him into her house. And she had a sister called Mary, who sat at the

Lord’s feet and listened to his teaching. But

Martha was distracted with much serving.

And she went up to him and said, “Lord, do you not care that my sister has left me to serve alone? Tell her then to help me.” But the Lord answered her, “Martha, Martha, you are anxious and troubled about many things, but one thing is necessary. Mary has chosen the good portion, which will not be taken away from her.”

Are you naturally “anxious and troubled about many things”? How easy – or difficult – do you find it to get to the heart of the matter and identify the “one thing” that’s necessary?

The Fox and the Hedgehog

The fox knows many things but the hedgehog knows one big thing.

The fox is a cunning creature, able to devise a myriad of complex strategies for sneak attacks upon the hedgehog. Foxes purse many ends at the same and see the world in all its complexity.

In response to each new line of attack from the fox, the hedgehog does the same thing, curling into a ball, a sphere of sharp spikes. Hedgehogs reduce all challenges and dilemmas to a simple – indeed almost simplistic – hedgehog ideas.

Hedgehogs understand that the essence of profound insight is simplicity. Hedgehogs see what is essential and ignore the rest.

And the hedgehog always wins.

The Good to Great companies and the “Best in the world at…” circle of the hedgehog concept

This table shows the understanding the good-to-great companies attained that formed the foundation of their shift from good to great. Note: This list does not show what the companies were already best in the world at when they began their transitions (most of these companies weren’t the best at anything, rather; it shows what they came to understand they could become best in the world at.

“COULD become best in the world at…” Economic denominator

Profit/ cash flow per…

Per employee Abbott

Laboratories:

Circuit City:

Fannie Mae:

Gillette:

Pitney Bowes:

Walgreens:

Wells Fargo:

Could become the best at creating a product portfolio that lowers the cost of health care

Could become the best at implementing the “4-S” model applied to big ticket consumer sales.

Could become the best capital markets player in anything that pertains to mortgages

Kimberly-Clark:

Kroger:

Nucor:

Philip Morris:

Could become the best at building premier global brands of daily necessities that require sophisticated manufacturing technology

Could become the best in the world at paper based consumer products

Could become the best in the world at paper based consumer products

Could become the best at harnessing culture and technology to produce low cost steel

Could become the best in the world at building brand loyalty in cigarettes and later, other consumables.

Could become the best in the world at messaging that requires sophisticated back-office equipment

Could become the best at convenient drug stores

Per geographical region

Per mortgage risk level

Per customer

Per consumer brand

Per local population

Per ton of finished steel

Per global brand category

Per customer

Per customer visit

Per employee Could become the best at running a bank like a business with a focus on the Western United

States.

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