The Hedgehog Concept — The Three Circles That Signal Greatness

1. What You Can Be the Best in the World At

This isn’t about what you want to be the best at — or what you’re currently good at.
It’s about what you can realistically be the best at, and equally, what you cannot.

As Collins warns, this standard goes far beyond core competence.
Many companies confuse “competence” with “potential for greatness.”
But being competent isn’t enough.

Focus on where your company can lead the world — even if that means walking away from what’s comfortable today.

2. What Drives Your Economic Engine

Every great company deeply understands how it makes money — and what drives profitability long term.

Collins calls this the “economic denominator” — a single measure that defines your performance, such as profit per x.

It might be profit per customer, per employee, per store, or per transaction — but it must be unique to you and understood by everyone.

If you’re using the same “profit per x” as your industry peers, you haven’t gone deep enough.

3. What You Are Deeply Passionate About

Finally, great companies discover what they are truly passionate about — not what they think they should be passionate about.

You can’t manufacture passion; you uncover it.
It’s what energizes your people, attracts customers, and gives purpose to your work.

The sweet spot of the Hedgehog Concept is where passion, profit, and potential for excellence align.
That’s your true north.

The Fox and the Hedgehog

Isaiah Berlin’s essay The Hedgehog and the Fox inspired Collins’ metaphor.

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

Foxes are clever, busy, and scattered — always chasing new ideas, reacting to trends, and defending territory.
Hedgehogs focus on one clear idea and pursue it relentlessly.

Great companies are hedgehogs — simple, focused, and disciplined.
Mediocre companies are foxes — distracted, reactive, and overextended.

How to Find Your Hedgehog Concept

At Strategy & Execution Advisors, we help leadership teams clarify their Hedgehog Concept using the Scaling Up One Page Strategic Plan (OPSP) framework:

• What you can be the best at? → Brand Promise
• What drives your economic engine? → Profit per X
• What are you deeply passionate about? → Core Purpose

Once you define this intersection, every strategic decision becomes clearer.

You stop chasing every opportunity and start building momentum around what truly matters.

Key Reflection Questions

To test your own “fox or hedgehog” tendencies, consider:

• Do we focus on one central theme or scatter energy across many?
• Do we apply consistent frameworks, or reinvent the wheel each time?
• Do we learn deeply from what works, or just move to the next shiny thing?
• Are we genuinely passionate about what drives our economic engine — or just operating on autopilot?

If your answers lean toward focus, discipline, and depth — congratulations. You think like a hedgehog.

If not, it might be time to sharpen your strategy.

Final Thought

The Hedgehog Concept isn’t about simplicity for its own sake.
It’s about clarity that scales.

Once you know your Hedgehog Concept, execution becomes easier, culture strengthens, and growth compounds naturally.

Because greatness isn’t about knowing everything — it’s about knowing your one big thing.

Want help defining your company’s Hedgehog Concept and translating it into a clear Scaling Up Plan?

Contact me at tedb@strategyandexecution.com.au to schedule a free 30-minute discovery meeting.

Watch Jim Collins –“What is the Hedgehog Concept?”