How a Hedgehog Can Help You Pivot Out of a Crisis

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If the pandemic has taught the business world one thing above all, it’s the importance of remaining agile on your feet, and pivoting with macroeconomic factors. When government lockdown measures were being introduced, organisations that managed to pivot their operations in-line with regulations were able to still serve their customers, albeit, a lower number of them. 

We can see then, the importance of pivoting during a crisis, be it a pandemic, economic recession, geographical constraints or wider factors that impact your operations. This is something that Jim Collins has written about for decades now, and in his 2001 classic, “Good to Great”, Collins uses the analogy of a hedgehog to map out how organisations can make influential, informed decisions during a time of crisis. 

Why are we talking about a little creature like a hedgehog? Well, Collins, being the academic that he is, reaches far back into ancient Greek mythology for an apt metaphor for modern business. How? There’s a Greek parable that says while a fox may know many things, the hedgehog knows one big thing. In the tale, a fox is keen to eat the hedgehog, and uses countless strategies to try to capture it. 

The fox had a number of strategies, none of which worked. The hedgehog on the other hand knew only one thing: how to defend itself- and that worked out perfectly for the little creature. 

The metaphor was built upon by Isiah Berlin in his “The Hedgehog and the Fox,” which states that the two types of people in the world – foxes and hedgehogs – approach problem solving in two different ways. Foxes had a million ideas, but remained unorganised and unfocussed on completing a task. Hedgehogs took the slower approach, refining their focus and honing in on a single task, or mission. 

Collins writes that in modern business, organisations are exhibiting the same behaviour. He states that organisations that act like foxes – with a zest for ideas but lack of follow-through – are less likely to endure a crisis. Organisations that take the hedgehog’s approach, by remaining committed to the things that they do well are more likely to survive a tough period. 

How To Find Your Organisation’s Hedgehog

Jim Collin’s Hedgehog Concept.

What are you passionate about?

What is it that your organisation is passionate about? What is your mission statement, and your vision for the future? These two statements are underpinned – or should be underpinned – by what you’re passionate about. What is it that your customers are buying into when they use your products or services? The same applies for your staff- what is it that they’re buying into when they join your organisation? 

You need to have a core offering that ignites passion from your staff, and ideally, with your customers, too. 

What can you be the best in the world at? 

You can’t survive a difficult time if you’re not serving up a quality product or service, so the second step of the process is to ensure the organisation is focussed on improving, and becoming the best in its industry. Keep in mind, this doesn’t need to happen overnight, there just needs to be an implicit promise from the management team that you recognise the need to improve. 

In terms of exactly where you can implement these improvements, you can take a more analytical approach. Use tools like a SWOT analysis, leverage the data of a net promoter score (NPS) survey, and make sure you’ve asked your team what they thing the organisation’s strong-points are. Find out what it is that your customers desire from your products or services. Ask them questions, and thank them if they’re critical of your organisation, because they’ve given you invaluable information about what to improve in the future. Be like the hedgehog and figure out what it is that your organisation is benefitting from the most, and ensure that aspect of your services never dips in quality. 

What drives your economic engine?   

Of course, making these changes can all be in vain if you don’t have a solid economic model that underpins your services. Collins writes that it’s essential for the organisation to understand its “economic denominator”, or your price per product. It’s very likely that you’re using or studying the wrong economic denominator, which can be extremely important when it comes to understanding your economic engine. Collins uses the example of airlines that were previously using metrics like revenue per seat mile, which one airline changed to revenue per airline. 

The airline that changed its economic denominator now had a different formula to work its strategic decision making upon, and it resulted with that airline weathering tough economic times better than their competitors. 

On the topic of prices, I’d like to add just one thing. While it might run contrary to business as imagined, if your product or service is of an extremely high level that outpaces the competition, you’re allowed to let your prices reflect this. Quite often, customers aren’t purchasing a product because it’s the lowest price on offer. They’re purchasing because it’s the highest quality product on offer. Let your prices reflect the quality of your services, and don’t necessarily slash your prices just to stay close to a competitor; particularly if they’re a lower quality offering. 

Pivot
Collins’ Hedgehog offers key decision making framework during a crisis.

The Overlap Informs Key Changes

When you’ve mapped these out, any overlaps will give you insight into how your organisation can best weather an economic downturn. If, for example, your organisation is passionate about environmental concerns, you’ve begun researching and sourcing more sustainable materials and your economic denominator reflects a premium, sustainable option, you’ve pointed your ship in the right direction – without even knowing it. Your strategic decision making will be centered on delivering a sustainable product that your customers are passionate about. Your customers will recognise the fact that their beliefs align with your organisation’s beliefs, and likely hold your organisation in high regard when it comes to purchasing time. 

This is an extremely important tool for organisations big and small to use in difficult times, and can implicitly strengthen your business model and organisational resilience when the market begins to deteriorate. 

Never underestimate the hedgehog, particularly when times are tough.  

Thanks for your time, I’ll see you in the next piece.

Kobi Simmat- Director & CEO of the Best Practice Group. 

Don’t forget, we’ve got more articles like this, as well as the latest industry-relevant news and ISO-explainers right here on our blog.

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