Jim Collins— Good to Great, The Hedgehog Concept (Simplicity Within the Three Circles)

The Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles:

1) What you can be the best in the world at (and equally important, what you cannot become the best in the world at). This discerning standard goes far beyond core competence. Just because you possess a core competence doesn't mean you can be the best in the world at it. Conversely, what you can be the best in the world at might not even be something in which you are currently engaged.

2) What drives your economic engine. (single denominator-- cash flow per x)

3) What you are deeply passionate about. The idea here is not to stimulate passion but to discover what makes you passionate.

A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at.

It takes four years on average to get a Hedgehog Concept.

Characteristics of the Council:
1. The Council exists as a device to gain understanding about important issues facing an organization.
2. The Council is assembled and used by the leading executive and usually consists of five to twelve people.
3. Each Council member has the ability to argue and debate in search of understanding, not from an egoistic need to win a point or protect a parochial interest.
4. Each Council member retains respect of every other Council member, without exception.
5. Council members come from a range of perspectives, but each member has deep knowledge about some aspect of the organization and/or the environment in which it operates.
6. The Council includes key member of the management team but is not limited to members of the management team, not is every executive automatically a member.
7. The Council is a standing body, not an ad hoc committee assembled for a specific project.
8. The Council meets periodically, as much as once a week or as infrequently as once per quarter.
9. The Council does not seek consensus, recognizing that consensus decisions are often at odds with intelligent decisions. The responsibility for the final decision remains with the leading executive.
10. The Council is an informal body, not listed on any formal organization chart or formal documents.