The Hedgehog Concept and
How It Applies to Product
By Chris Marocchi
‘The Practical Product Marketer’
January 12, 2011
Product Development and Management is
all about managing the product lifecycle
“Cradle to Grave”.
Customer and market research will
determine what could be developed
(product, feature set, service).
A common problem evolves from this: a
brand loses its identity by becoming “All
things to all people”.
After a product reaches a certain point of
robustness and gains traction in the
marketplace, the question evolves from:
What to develop?
What not to develop?
Jim Collins, in his book ‘Good to Great’,
addresses this question by defining the
“Those who built the good-go-great
companies were, to one degree or another,
hedgehogs. Those who led the comparison
companies tended to be foxes…, being
scattered, diffused, and inconsistent.”
(Collins, pg. 92)
Foxes vs. Hedgehogs
Foxes pursue many ends at the same time.
They are “scattered or diffused moving on
Hedgehogs simplify a complex world into a
single organizing idea, a basic principle or
concept that unifies and guides everything.
ITT in the 1990’s (owned Sheraton, ITT – Tech,
UPS in early 2000’s (owned Marriott, aircraft
Time Warner in the 1990’s (owned Warner
Music Group, AOL, Time Inc., etc.)
In N Out Burger
The Three Circles
Collins’ definition of the Hedgehog concept is
based on three key dimensions that should lead
the strategy of product development for any
Three Circles Defined
What you can be the best in the world at – it’s an
understanding of what you can be the best at. Not
just a core competency.
What drives your economic engine – determine
what is your denominator. If you were to pick one
ratio (e.g. profit per x), what would have the
greatest and most sustainable impact on your
What are we passionate about? You can’t
“manufacture” passion, you can only “discover”
what ignites your passion and the passion of your
A Case Study
Company – CB Richard Ellis
Division – Asset Services
Profit Center – Axis Portal Group
Customer Service Manager and Rep
Where To Begin?
Off-Site Strategy Meeting
Presentation of the Hedgehog Concept
Define objective: The team doesn’t leave
the room until it defines the 3 circles and
applies the Hedgehog Concept to the
Split into 3 teams
The 3 Questions Answered
Compile the brainstormed answers from all
teams into a single list
Compare and analyze the results of all
Determine common patterns by analyzing
frequency of results
What can Axis Portal be the best in the world at
Offering online service products to benefit property
managers and tenants
Provide customer service/support
• What drives Axis Portal’s economic engine?
Monthly fees (recurring $ per month and the # of properties
paying recurring fees)
• What are we passionate about?
Providing high level of service and training
Providing solutions to our clients’ challenges
What product enhancements should we
Improved customer experience/footprint
38% revenue growth with 14% margin
increase over 3 years.