Everyone is talking about new media and the role it will play in the future of marketing. There is no doubt the future holds many opportunities for those who can put technology to work for them. But before you start blogging and twittering there are some things you might consider.
Watch this short video from Shift Happens to get a sense of the changing media landscape.
But rushing headlong into all forms of new media may be the wrong approach for your business. When consulting with our clients, we always remind them that no amount of good advertising will fix a bad restaurant. No matter how much we advertise, the food will always be cold, the service will always be slow and the prices will always be too high, until the owner of that restaurant is willing to make the changes necessary to be a good restaurant.
The following are excerpts from a book report by Gene Early written in 2004. These passages do a nice job of summarizing Key Concepts in the book Good to Great by Jim Collins. These principals provide practical guidelines for how businesses today should approach the implementaton of new media.
In his book Good to Great, Jim Collins and his team of researchers conducted a five year research effort to find out how good companies became great. The team culled its initial list of 1435 companies down to two groups of eleven, one representing companies that made the breakthrough to greatness, and the other, a comparison group which failed to do so.
In addition, the good-to-great companies were defined by having 1) a history of cumulative stock returns equal to or below the general stock market, 2 ) followed by a breakthrough, 3) leading to performance with cumulative returns at least three times the general market over fifteen years following their breakthrough point.
The result of this intensive research answers the question, “Can a good company (organization) become a great one, and, if so, how?” Good companies and organizations can make the leap, and the book offers a framework consisting of a set of universal principles pointing the way toward how it can be done. Collins’ and his team found that “every primary concept in the final framework showed up as a change variable in 100% of the good-to-great companies and in less than 30% of the comparison companies during the pivotal years.”
Hedgehog Concept
What is the one big thing you and your organization can be best at? The answer to this question is the essence of the Hedgehog Concept. Collins and his team took the metaphor from Isaiah Berlin’s essay in which he wrote, “The fox knows many things, but the hedgehog knows one big thing.”
The Good to Great model for getting to the core of this one big thing identifies three overlapping circles. Where all three intersect one finds the complexity of the company’s world becoming profound simplicity. It is this clarity, or deep understanding, which guides the strategies, goals, and intentions of the company. The three key elements for developing the Hedgehog Concept require answering three questions, called the “three circles”…
- What can you be best in the world at? The answer to this one is an identity statement defining the character of the company (or organization) and leading to strategies, goals, and intentions that express the identity. This identity is expressed through a set of skills and talents that make the identity evident. As a result, the answer may not be what you are already good at. It is rather what you can be great at, really great.
- What are you passionate about? The idea is to discover your passion, not to get a good idea and try to rev up the passion. It may mean that the choice of your Hedgehog Concept is something that you can get passionate about. This circle supports the underlying notion that with the right people (sharing this passion), you don’t have to motivate them. They are motivated because they share the passion and are energized by the work they’re involved in. The passion may be at different levels, e.g. the mechanics of the business, the results it produces, or for what the company stands for.
- What drives your economic engine? The key to this question is “the denominator” in a simple equation. In for-profits, the equation is “profit per x.” In non-profits, it is “cash flow per x.” A further question focusing this idea is, “If you could pick one and only one ratio—profit per x or cash flow per x—to systematically increase over time, what x would have the greatest and most sustainable impact on your economic engine?” The xmight be customer visit (Walgreens), mortgage risk level (Fannie Mae), employee (Wells Fargo), local population (Kroger), or consumer brand (Kimberly-Clark).
Collins writes that “The Hedgehog Concept is a turning point in the journey from good to great.” It typically takes the right people willing to address the brutal facts over an extended period of time to get to the deep understanding of a Hedgehog Concept. One mechanism that Collins recommends involves the following cycle…
- Get the right people involved over time.
- Ask the right questions, such as the three key ones from the Hedgehog Concept.
- Engage in intense debate over these questions
- Make decisions
- Autopsy the results without blame
- Learn from the process and apply those learnings to the next cycle.
To accelerate the process of getting clarity, he recommends, “Increase the number of times you go around that full cycle in a given period of time.”
Once you get the Hedgehog Concept, it rings true. There’s no hoping or wishing involved, there is a knowing that you could be best in the world at what you’ve discovered. This confidence is built on all the work, the debate, the action and evaluation you’ve been engaged in. And it crystallizes around this core understanding of who you are as a company, or for that matter, as a person.
When you have identified your Hedgehog Concept at a personal level, you are able to say, “I feel I was just born to do this,” “I get paid for this, for what I love to do? I must be dreaming,” and “I look forward to getting up and throwing myself into my daily work. I enjoy the actual process of working for its own sake.” Using your understanding of these three circles, you are then able to define the profound simplicity of the core of your Hedgehog Concept.-
Technology Accelerators
Part of success of the companies studied in Good to Great involved how these companies viewed technology. They avoided many opportunities and focused on selection of technologies most applicable to forwarding their Hedgehog Concept. As a result, technology became simply one more accelerator of momentum for these companies. With the deep understanding that came from their focus on the three circles, they all came to be pioneers in the application of technology as it fit with their Hedgehog Concept. Thinking associated with this principle includes the process of asking…
- Does the technology fit directly with your Hedgehog Concept?
- If yes, then you need to be a pioneer in the application of that technology.
- If no, then ask, do you need this technology at all?
- If yes, then all you need is parity.
Collins and his team concluded that the comparison companies could have been given the same technology good-to-great companies used, and still fail to produce equivalent results. Why is that? It is one more example of the inner drive of a company’s character and culture. Great companies are not driven by fear—of the marketplace, of economic circumstances, or technology advances. They are driven by the potential they see and the stimulation of actualizing that potential. Technology contributes to this drive, but once again it is the interaction of principles in the “good-to-great” model that produces and sustains greatness.
So as you survey the various new media options available, keep in mind it is you that drives the use of new technology to further your own Hedgehog Concept. It is not technology that drives your Hedgehog Concept.
We use a saying to illustrate this point. We say no amount of good advertising will fix a bad restaurant. No matter how much advertising we run, the food will always be cold, the service too slow and the prices too high.
Before selecting which new medium to use to further your Hedgehog Concept, make sure you have a good restaurant before you begin.
Keep in mind that Radio still remains a robust medium. Nine out of ten people listen to the Radio every day. The average person listens almost three hours a day. Tech savy teens listen to Radio more than the average person. There are six million more people listening to Radio today than just four years ago.
If you would like to learn more, simply send me an email at Spike@SpikeSantee.com.
(Parts of this article come from a paper written by Gene Early 2004)
