1. THE HEDGEHOG CONCEPT (Simplicity within the Three Circles)
Michael Seymour
Matthew Anderson

2. Disciplined Thought – Part 2
Level 5 Leadership
First Who…Then What
Confront the Brutal Facts
Hedgehog Concept
Culture of Discipline
Technology Accelerators

3. Hedgehog Concept The fox and the hedgehog Strategy or Simplicity?
Good-to-Great – hedgehog
Comparison – fox
Strategy or Simplicity?
EX: Walgreens vs. Eckerd

4. The Three Circles passionate about What drives your economic engine
What you are deeply
passionate about
What drives your economic engine
What you can be the best in the world at

5. Understanding What You Can (and Cannot) Be the Best At
What can we do better than any other company?
What can we not do better than any other company?
It’s not a goal, but an understanding
EX: Wells Fargo, Abbott vs. Upjohn

6. Circuit City: Could become the best at implementing the “4-S” model (service, selection, savings, satisfaction) applied to big-ticket consumer sales.
Notes: Circuit City saw that it could become “the McDonald’s” of big-ticket retailing, able to operate a geographically dispersed system by remote control. Its distinction lay not in the “4-S” model per se – but in the consistent, superior execution of the model.

7. Insight Into Your Economic Engine – What Is Your Denominator?
The notion of a single “economic denominator”
Companies have many options when choosing an economic strategy
Goal is choosing denominator that will have Greatest and most Sustainable impact on company economic engine
It can be subtle, even unobvious
The key is to gain understanding and insight into your economic model

8. Gillette: per customer
Key Insight: Shift from profit per division to profit per customer reflected the economic power of repeatable purchases (e.g., razor cartridges) times high profit per purchase (e.g., Mach 3, not disposable razors).

9. Understanding Your Passion
Passion is a key part of the Hedgehog Concept
Discover what ignites your passion
The passion can be focused equally on what the company stands for
Ex: Phillip Morris: “We have a right to smoke, and we will protect that right!”

10. The Triumph of Understanding Over Bravado
“prehedgehog” and “posthedgehog”
The Council

11. The Council Ask Questions Dialogue & Debate Executive Decisions
Autopsies & Analysis
The Council

12. Conclusion The hedgehog concept: Keep it simple
Lies in the heart of these three circles
Is a turning point in the journey from good to great
Keep it simple