Kevin’s blog

This book analyzed 11 companies that went from being just good to being really great.  I would say this is a must read for anyone interested in "management" in any sense of the word.  It will give you good pointers on how to manage businesses and also how to manage your own personal life.
 
I'm not going to review the entire book in depth, but I will tell you the most important thing I learned from it.

The Hedgehog Concept
(Simplicity within the Three Circles)

Basically the idea is that there are 3 circles, and in order to be great, you need to develop a deep understanding about their intersection.

Circle 1 - What you can be the best in the world at - The key words here are can be - not what you are pretty good at.  You have to find that niche where you can really be the best in the world.

Circle 2 - What drives your economic engine - This is not just making sure you can make money.  The key to this one is finding your economic denominator.  In "profit per X" or "cash flow per X" you need to find the correct X.  For example, Walgreens used "profit per customer visit" and Boeing used "profit per aircraft model" and Wells Fargo used "profit per employee" when other banks used "profit per loan" or "profit per deposit"

Circle 3 - What you are deeply passionate about - The idea here is no not to stimulate passion but to discover what makes you passionate.

There was a book I read a while back called "Creating Affluence - Wealth Consciousness in the Field of All Possibilities" by Deepak Chopra.  In that book, he says that everyone has something that they do better than anyone else in the world.  If you can find that thing for yourself and then (here is the key) use it to provide value to other people, then you will have affluence - which includes all the money you could ever want.

If you do something better than anyone else, then you should have Circle 1 and Circle 3 covered.  The key is to figure out how to best use your skill to provide value for other people - Circle 2.

In that book, he mentioned that the way to get to affluence is through a series of meditations.  Eastern philosophers use the word "meditation" instead of "taking some time to really think about it".  And he gives some techniques for meditation.

In "Good to Great", the western-thinking Jim Collins basically suggests the same thing.  Only since this book is geared towards businessmen, he suggests building a council and holding a series of meetings.  Seems like the same approach to me.  :)

You have to recognize that getting a Hedgehog Concept is an inherently iterative process, not simply one event.  It will be guided by the three circles in each step: asking questions; dialogue and debate; executive decisions; autopsies and analysis. The people who do this corporate soul-searching are the Council, whose characteristics are:

1. The Council exists as a device to gain understanding about important issues facing the organization.
2. The Council is assembled and used by the leading executive and usually consists of 5-12 people.
3. Each Council member has the ability to argue and debate in search of understanding, not from the egoistic need to win a point or protect a parochial interest.
4. Each Council member retains the respect of every other Council member, without exception.
5. Council members come from a range of perspectives, but each member has deep knowledge about some aspect of the organization and/or the environment in which it operates.
6. The Council includes key members of the management team but is not limited to members of the management team, nor is every executive automatically a member.
7. The Council is a standing body, not an ad hoc committee assembled for a specific project.
8. The Council meets periodically, as much as once a week or as infrequently as once per quarter.
9. The Council does not seek consensus, recognizing that consensus decisions are often at odds with intelligent decisions. The responsibility for the final decision remains with the leading executive.
10. The Council is an informal body, not listed on any formal organization chart or in any formal documents.
11. The Council can have a range of possible names, usually quite innocuous. In the good-to-great companies, they had benign names like Long-Range Profit Improvement Committee, Corporate Products Committee, Strategic Thinking Group, and Executive Council.
    

The Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the three circles.  Try to keep the following attitude:

• "There must be something we can become the best at, and we will find it!"
• "We must also confront the brutal facts of what we cannot be the best at, and we will not delude ourselves!"

When you get your Hedgehog Concept right, it has the quiet ping of truth, like a single, clear, perfectly struck note hanging in the air in the hushed silence of a full auditorium at the end of a quiet movement of a Mozart piano concerto.  There is no need to say much of anything; the quiet truth speaks for itself.