Sometimes called the ‘Hedgehog Concept’ [The Hedgehog]
Really great organisations are exceptionally good at one thing and stick to it. This is what hedgehogs do when attacked – roll in to a ball and put their spines out; it works every time.
The 3 circles blueprint describes how this plays out. These are the 3 key things to understand about your business. Get these 3 right and you need no other clever strategy or mission statement.
You need to keep on asking the questions and reviewing the answers over time. The answers will evolve, refine and improve.
What are we passionate about?
This might be, for example: making a real difference; a really great service; selling the best widget there is in the field; amazing innovation; a rapid response to market situations; building long term relationships with clients.
It is unlikely to be: making lots of money, putting the competition out of business; working within the regulations.
What are we excellent at?
This is about getting right down to the core of what you do. It requires a little analysis and may not be the first thing you think of. It is about what differentiates you from all of the competition; about what you do that no one else does as well. Suppose you sell a piece of customer related business management software competing with 4 or 5 others. It won’t be the prettiness of your graphic interface that matters, but it may be how the software ensures that your staff collect accurate information about your clients [all the boxes get filled in, all the time] and how that is put to good use in your marketing, stock control or pricing so that it genuinely impacts the profitability of your client. Getting this decision right allows you to focus on building that excellence and keeping a clear lead ahead of the competition.
What is our economic engine?
This means what is the key fact that determines profitability. If you create something it may be how you keep the cost of creation down or how many clients it can be leveraged across with no further work. It might be the output per day of your key workers. Again this key metric will differentiate you from the competition but also give you a target to reach and improve on.conceptC
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