Are You Good, or Are You Great? Understanding the Hedgehog’s Key to Success.
Have you heard of the hedgehog and the fox? The story goes something like this… a fox wakes up every day with plans to trap the hedgehog. The fox knows a little bit about a lot of things, so it tries many different strategies, frequently changing tactics and directions, yet continues to fail. All the while, the hedgehog remains safe from the fox because the hedgehog is focused on one big thing: defending itself. Inspired by an ancient Greek parable, “The fox knows many things, but the hedgehog knows one big thing2,” Jim Collins used this concept in several of his books, starting with Good to Great1. Collins recommends companies figure out their one big thing and then stay focused on that. They should avoid getting distracted by other initiatives or strategies that are not relevant to their core focus. He refers to this as the Hedgehog Concept3.
What Exactly is the Hedgehog Concept?
Essentially, the concept of the hedgehog is the intersection of three circles: 1) what you are passionate about, 2) what you are best at and 3) what drives your economic engine. Rather than a goal, strategy, intention or plan to be the best, the Hedgehog Concept is “an understanding of what you can be the best at.3” And, conversely, clarity on what you cannot be best at. These three circles must coexist — a successful organization cannot have one circle without the others. Many companies are focused on one or even two of these three circles, but very few are keenly aware of the intersection of the three and able to ignore all other distractions. When applied correctly, the Hedgehog Concept can help your organization avoid distractions that are often detrimental to your core business. At Allied Affiliated Funding, a division of Axiom Bank, N.A.,we want to be the best at what we do. But simply focusing on being the best isn’t good enough. We must know what we can be the best at and what we cannot. We must focus on our hedgehog.
Discovering our ‘sweet spot’ was a big win for our team. For Allied, we first had to figure out where each of the three circles overlapped so that we could then stay focused and not become distracted like the fox. This first circle was identifying our passion: helping businesses succeed. We want our clients to be successful, which in many cases means helping our clients become bankable and helping them throughout their journeys. Their success is our passion. The second circle was what we are good at: managing risk. To effectively manage risk, we must first take risks. We then work to balance that risk while creating flexible funding solutions for clients. With our financial expertise, longevity, and industry-certified team members, we can do just that. We develop customized solutions to help our clients get through bumps in the road, take on new orders, hire new employees, make payroll, acquire other companies, and more.
Finally, we looked at our third circle, or our economic engine. For Allied, our economic engine is charging appropriate fees for not only the working capital provided, but also for the services offered. We believe in aggressive and competitive pricing that is also commensurate to the associated risk. We believe that companies are not only paying us for gaining access to funding, but for a superior client experience as well. This includes being responsive, solution-oriented, and having a ‘no surprises’ approach to how we do business.
Our services also include reviewing new and existing customer creditworthiness when our clients take on new orders, helping with invoice inquiries to ensure payments are not delayed from their customers, reporting accurate and timely information so that our clients know where their account stands at any time with fees that are easily identified and easy to understand, and that’s just to name a few.
Once we found our ‘sweet spot’ or our ‘hedgehog’ and really defined it, we then created a shared terminology and focus as a team. Finding and focusing on our hedgehog gives our clients more time to focus on running and growing their businesses. In fact, it gives our clients the ability to focus on their hedgehog too.
Allied Affiliated Funding has multiple funding options available, even beyond accounts receivables financing. Contact us today to learn more about our financing solutions and other available services.
1 Collins, J. C. (2001). Good to great: Why some companies make the leap … and others don’t. New York, NY: HarperBusiness. 2 Wikipedia contributors. The Hedgehog and the Fox. In Wikipedia, The Free Encyclopedia. Retrieved 10:42, April 12, 2019, from https://en.wikipedia.org/wiki/The_Hedgehog_and_the_Fox. 3 Collins, J.C. The Hedgehog Concept Blog Post. Retrieved from https://www.jimcollins.com/concepts/the-hedgehog-concept.html.