Hedgehog & BHAG

© 2008-2015 Rhythm Systems, Inc.

Rhythm®

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Hedgehog & BHAGHedgehog & BHAG®


The first step in finding your BHAG is to understand your

Hedgehog


The Hedgehog Concept•Jim Collins calls this “doing one thing and doing it well”

•Contrasts the clever Fox who is constantly finding new ways to try to catch the Hedgehog

•with the Hedgehog, who outsmarts the Fox by sticking to what it does best, rolling up in a thorny ball

•You must understand and preserve the core of your business


What you are What you are deeply deeply

PassionatePassionate about?about?

What What drives your drives your

Economic Economic

EngineEngine

What you canWhat you canBe Be Best in the Best in the WorldWorld atat

Your Hedgehog lives at the intersection of these three

circles:


What are you deeply Passionate about?

Question #1


Core Purpose/Passion

Your Organization's Reason for Being

Reflects people’s passion and idealistic motives for doing the company’s work

Captures the soul of the organization


Help people get, stay,

and live well

Purpose/Passion Examples

Democratize air travel in America


Work on Your Core Purpose

• Write down WHAT you do. • Ask "WHY is that important"? • Ask the WHY question 5 times.• Review all the different answers with

your team, searching for the answer that resonates most, generates some passion, and gets to the heart of your organization's Core Purpose.


What could you be Best at in the World?

Question #2


What could you be

“Best At”?• The question is what COULD you be best at, not what ARE you already best at.

• What can you NOT be best at?

• It could build on a competency you already have.

• Or it could be something you’re not great at today.


Convenient drug stores

“Best At” Examples

Low cost air travel


Work on Your Best At• On a flipchart, write down what you know

you are good at. Brainstorm ideas with your team.

• Consider strengths, Core Competencies, and your Brand Promise if you have one.

• Ask yourself if you could realistically become best in the world at this.

• Discuss until it becomes clear. You may need to get into a Think Rhythm to continue working on ideas.


What Drives Your Economic Engine?

Question #3


Economic Engine or Profit/X

• Profit / x is the financial indicator that has the greatest impact on your economics

• More of a strategic discussion than a KPI discussion

• Choosing one metric over the other will cause you to make different strategic decisions in every aspect of the business


Profit / Customer Visit

Profit/X Examples

Profit / Plane


Work on Profit/X

Questions:• What drives your economic

engine?

• How do you make money?

• Is it about the customer? The product? The service?

• What has the greatest impact on the bottom line?


Your BHAG should connect to your Hedgehog

PurposePurpose//PassionPassion

Profit/X Profit/X

Best in the Best in the WorldWorld

BHAGBHAG??????????


Southwest Airlines Example


Democratize air travel in

America

Profit/X Profit/X Profit/Plane


Providing low cost air travel

BHAGBHAGX # of airplanes in X # of airplanes in the air by X datethe air by X date


Work on your Big Hairy Audacious Goal (BHAG)

What is your Mt. Everest?


BHAG Guidelines

•Your 10+ Year Visionary Goal. It should help paint a picture of the future.

•It reinforces the RIGHT Decisions because it’s connected to your Hedgehog Passion, Best At & Profit/X

•It stretches us because it is Audacious: Bold, Daring, Fearless

•It should Inspire us•It must be Measurable


BHAG for 1960s America

- Put a Man on the Moon & Return Him

Safely

JFKExampleExample


BHAG - Become the

#1 Consumer Brand on the

Planet

Starbucks

ExampleExample


Types of BHAGs

Target OrientedSubway: - 32 StoresStarbucks: #1 Consumer Brand

CompetitiveNike: Crush Adidas

Role-ModelStanford University: Become the Harvard of the West


Pitfalls To Avoid

Financial Oriented ($1B in sales)Doesn’t guide business decisions

What would you say NO to?

Not Connected to the Heart!Must connect emotionallyMust ignite Passion

Too ComplicatedMake it simple to understand

Make it measurable


So, what’s your BHAG?


Profit/X Profit/X


BHAGBHAG??????????

Business

Hedgehog & BHAG