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The book "Good to Great" sums this up amazingly well as something called "the Hedgehog Concept." * What are you deeply passionate about? * What can you b

The book "Good to Great" sums this up amazingly well as something called "the Hedgehog Concept." * What are you deeply passionate about? * What can you be the best in the world at? * What drives your economic engine? If there is something that does not fit in those three circles, do not do that thing. Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time.

ryanmolden 15y ago
http://www.freakonomics.com/2008/07/28/from-good-to-great-to-below-average/ http://www.freakonomics.com/2008/07/28/from-good-to-great-to...
- _pius 15y ago
  That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.
  - larrys 15y ago
    How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time." I think it does and is appropriate. I've been around long enough to have read "In search of Excellence" which Levitt refers to this way "These business books are mostly backward-looking". What the books that are backward looking don't reveal is the companies that follow the same practices that have failed. There is never any data on that.
    - _pius 15y ago
      How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time." I think it does and is appropriate. I don't think it does. The problem of business books being mostly backward-looking is interesting, but completely orthogonal to the question of whether many lessons written about in blog posts have already been covered by classic business books.
  - ryanmolden 15y ago
    So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective? Can you actually claim that there aren't likely to be hundreds of businesses that exhibit all the traits that make businesses 'great' and yet failed?
    - _pius 15y ago
      So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' past success. It's little more than a glib, cocktail party-sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD. In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective? That's the whole point: it's not predictive, it's retrospective. I said the article you linked to is FUD not because I'm a Jim Collins or business book industry apologist, but because the article attacks a strawman, namely that the book claimed that companies' past success implies that they will always be successful. It'd be great if one could prove business success by induction, but it doesn't work that way. This article doesn't even attempt to address whether or not the failed companies it mentioned continued to use the concept described in the book.
      - ryanmolden 15y ago
        >Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' success. It's little more than a glib, cocktail-party sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD. And nothing in Jim Collin's book shows it was a factor in their success, he just claims it is because all the companies he analyzed allegedly fit into his rubric. Does he research if failed companies did not fit into it equally well? Or perhaps other competitors in the same industry? If all you are doing is retrospectively identifying success, well great, but that isn't terribly hard to do. If all you are doing is cherry picking examples or worse, simply grouping already successful companies and then deciding that their success must be due to some common trait(s) they all share, then you also aren't providing any real insight in my opinion. As others have pointed out his theories are vague to the point of uselessness. Do only what you can you be 'best in the world' at? Really? Best in the world? Well by that metric there really only should be one company in every single industry, since clearly we can't have multiple 'best in the worlds'. All he is engaging in is book length common sense "Do what you are good at, don't do what you aren't good at, don't waste money on ill-conceived ideas". Trite sayings that are not really anything anyone would argue against but also don't give a lot of amazing insight. Maybe I am just too dense to get his brilliance, but I have never seen anything amazing from his writing, which was why I originally responded to someone that appeared to be implying that he was apparently the diviner of the one true path to success.
- officemonkey 15y ago
  Companies change. CEOs leave. For example, the thing that made Fannie Mae succeed (being able to manage risk) was abandoned with the loosening of the credit markets in 1999 and beyond. Discipline is hard and success in the past gives you a false feeling of security. Interestingly enough, this is covered in the book, but a dismissive blogosphere article isn't going to admit that.
  - ryanmolden 15y ago
    Sure, but have you analysed these cases to see that is what happened or are you just saying that happened because they went on to do poorly? People have, for ages, been purporting to identify the secrets to success and sell you something that will allow you to predict the future/replicate the winners, and yet it is still rare. You could claim it is because it is hard and success breeds hubris, both of which are likely to be true, but it could also be because Jim Collins, like others before him, has not stumbled upon the secret to being great and found a way to distill it into a book or a simplistic maxim that actually works.
    - officemonkey 15y ago
      The research in the book says that Fannie Mae succeeded because they learned to manage risk better than any other company. Years of leadership by David O. Maxwell and James A. Johnson ended in 1998, and provisions of Glass-Steagall was repealed in 1999. There is no simplistic maxim, but the concepts and success described in the book are backed up with far more research than either blogosphere article cited.
larrys 15y ago
"What can you be the best in the world at? " Ridiculous and idealistic. Is Porsche the best sports car or the best selling sports car? Is Avis the best car rental company and on what metric? Is Burger King the best fast food? What is the definition of best? Best selling? Most profitable? Highest quality?
- bmelton 15y ago
  If nobody tried to be the best, there wouldn't be anything good. Porsche may not be "the best" sports car overall as that is a very subjective metric. Though for sure, they make an exceptional car. For various definitions of 'reasonable', the 911 is the most performant car in at its price point (or at least, generally is, these things wax and wane). The key isn't whether they are the best sports car, but whether or not they're succeeding at being the best at ... something. That something may not be as broad as 'best sports car', but may be much more narrow. Twitter isn't "the best website" in the world, but it might be the best way to transmit short messages to a broad list of friends. Similarly, Dropbox might do very poorly in a "best system backup" utility, but might win competitions involving ease of use, or in being convenient enough that its users actually bother (which is better than most backup providers.) The companies that try to be all things to all people are few and far between, and us, as entrepreneurs, are thankful for them because all it means is we have to beat them in one small segment and they acquire us. ;-)
- officemonkey 15y ago
  That's covered in the book as well. You get to pick the thing you're best at. From my own experience, Hertz has decided to concentrate on the metric "Getting regular customers into a car as quickly as possible." I recently went to Enterprise and I was appalled by the difference in customer service. They were nice, and the car was fine, but nobody _wants_ to spend 15 minutes waiting in line for a car. As far as car makers, there are many metrics as well. You could go with "per car profitability," or you could go with "lowest cost per car," or you could go with "best customer retention." The thing is, once you decide _which_ best car maker you're going to be. Once you decide, you become ruthless in pursuing it.

ryanmolden 15y ago

http://www.freakonomics.com/2008/07/28/from-good-to-great-to-below-average/ http://www.freakonomics.com/2008/07/28/from-good-to-great-to...

_pius 15y ago
That article is little more than FUD and neither refutes the Hedgehog concept nor adds much value to the current discussion.
- larrys 15y ago
  How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time." I think it does and is appropriate. I've been around long enough to have read "In search of Excellence" which Levitt refers to this way "These business books are mostly backward-looking". What the books that are backward looking don't reveal is the companies that follow the same practices that have failed. There is never any data on that.
  - _pius 15y ago
    How do you feel that putting a link to the Freakanomics article doesn't provide perspective on this statement: "Much of the entrepreneur blogosphere would go up in a puff of smoke if people would simply read the business books that stand the test of time." I think it does and is appropriate. I don't think it does. The problem of business books being mostly backward-looking is interesting, but completely orthogonal to the question of whether many lessons written about in blog posts have already been covered by classic business books.
- ryanmolden 15y ago
  So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective? Can you actually claim that there aren't likely to be hundreds of businesses that exhibit all the traits that make businesses 'great' and yet failed?
  - _pius 15y ago
    So to be clear, a man writes a book purporting to identify the characteristics and behaviors that make companies great. He calls out some number of such great companies and shows how they all fit into his analysis. Said companies go on to do objectively less than great, and someone calling that out is engaging in FUD? Interesting. Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' past success. It's little more than a glib, cocktail party-sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD. In my opinion Jim Collins has made a career on identifying success in hindsight, plunging headlong into a classic case of survivorship bias in order to divine the root causes of these successes, and then publishing his analysis. Can you point me to anything he has written that is predictive instead of simply retrospective? That's the whole point: it's not predictive, it's retrospective. I said the article you linked to is FUD not because I'm a Jim Collins or business book industry apologist, but because the article attacks a strawman, namely that the book claimed that companies' past success implies that they will always be successful. It'd be great if one could prove business success by induction, but it doesn't work that way. This article doesn't even attempt to address whether or not the failed companies it mentioned continued to use the concept described in the book.
    - ryanmolden 15y ago
      >Nothing in the article actually shows that the Hedgehog concept is bad or wasn't a factor in these companies' success. It's little more than a glib, cocktail-party sized nugget of contrarianism with no real substance. That's why I dismissed it as FUD. And nothing in Jim Collin's book shows it was a factor in their success, he just claims it is because all the companies he analyzed allegedly fit into his rubric. Does he research if failed companies did not fit into it equally well? Or perhaps other competitors in the same industry? If all you are doing is retrospectively identifying success, well great, but that isn't terribly hard to do. If all you are doing is cherry picking examples or worse, simply grouping already successful companies and then deciding that their success must be due to some common trait(s) they all share, then you also aren't providing any real insight in my opinion. As others have pointed out his theories are vague to the point of uselessness. Do only what you can you be 'best in the world' at? Really? Best in the world? Well by that metric there really only should be one company in every single industry, since clearly we can't have multiple 'best in the worlds'. All he is engaging in is book length common sense "Do what you are good at, don't do what you aren't good at, don't waste money on ill-conceived ideas". Trite sayings that are not really anything anyone would argue against but also don't give a lot of amazing insight. Maybe I am just too dense to get his brilliance, but I have never seen anything amazing from his writing, which was why I originally responded to someone that appeared to be implying that he was apparently the diviner of the one true path to success.
officemonkey 15y ago
Companies change. CEOs leave. For example, the thing that made Fannie Mae succeed (being able to manage risk) was abandoned with the loosening of the credit markets in 1999 and beyond. Discipline is hard and success in the past gives you a false feeling of security. Interestingly enough, this is covered in the book, but a dismissive blogosphere article isn't going to admit that.
- ryanmolden 15y ago
  Sure, but have you analysed these cases to see that is what happened or are you just saying that happened because they went on to do poorly? People have, for ages, been purporting to identify the secrets to success and sell you something that will allow you to predict the future/replicate the winners, and yet it is still rare. You could claim it is because it is hard and success breeds hubris, both of which are likely to be true, but it could also be because Jim Collins, like others before him, has not stumbled upon the secret to being great and found a way to distill it into a book or a simplistic maxim that actually works.
  - officemonkey 15y ago
    The research in the book says that Fannie Mae succeeded because they learned to manage risk better than any other company. Years of leadership by David O. Maxwell and James A. Johnson ended in 1998, and provisions of Glass-Steagall was repealed in 1999. There is no simplistic maxim, but the concepts and success described in the book are backed up with far more research than either blogosphere article cited.

larrys 15y ago

"What can you be the best in the world at? " Ridiculous and idealistic. Is Porsche the best sports car or the best selling sports car? Is Avis the best car rental company and on what metric? Is Burger King the best fast food? What is the definition of best? Best selling? Most profitable? Highest quality?

bmelton 15y ago
If nobody tried to be the best, there wouldn't be anything good. Porsche may not be "the best" sports car overall as that is a very subjective metric. Though for sure, they make an exceptional car. For various definitions of 'reasonable', the 911 is the most performant car in at its price point (or at least, generally is, these things wax and wane). The key isn't whether they are the best sports car, but whether or not they're succeeding at being the best at ... something. That something may not be as broad as 'best sports car', but may be much more narrow. Twitter isn't "the best website" in the world, but it might be the best way to transmit short messages to a broad list of friends. Similarly, Dropbox might do very poorly in a "best system backup" utility, but might win competitions involving ease of use, or in being convenient enough that its users actually bother (which is better than most backup providers.) The companies that try to be all things to all people are few and far between, and us, as entrepreneurs, are thankful for them because all it means is we have to beat them in one small segment and they acquire us. ;-)
officemonkey 15y ago
That's covered in the book as well. You get to pick the thing you're best at. From my own experience, Hertz has decided to concentrate on the metric "Getting regular customers into a car as quickly as possible." I recently went to Enterprise and I was appalled by the difference in customer service. They were nice, and the car was fine, but nobody _wants_ to spend 15 minutes waiting in line for a car. As far as car makers, there are many metrics as well. You could go with "per car profitability," or you could go with "lowest cost per car," or you could go with "best customer retention." The thing is, once you decide _which_ best car maker you're going to be. Once you decide, you become ruthless in pursuing it.