In Good to Great, Collins uses Walgreens as an example of a company that finely honed its focus and outperformed the stock market by more than 15 times from 1975 to 2000. The changes there were insider driven.
Charles “Cork” Walgreen III transformed the lackluster company by getting rid of more than 500 restaurants and refocusing the business on becoming the most convenient drug store. It was an emotional decision because Walgreens invented the malted milk shake, his grandfather started in food service, and the restaurants Walgreen dumped included those named after him, Corky’s.
But Walgreen was determined. He gave his team five years to accomplish the task. When after six months, no progress had been made, he told his team they now had four and half years. Then, they got busy. With that narrowed focus, there’s more Walgreens than the ubiquitous Starbucks and they offer drive-through and 24-hour pharmacies even in dodgy neighborhoods, flu shots on demand, passport photos, reasonably priced milk and bread, all designed for customer convenience.
Collins calls this the “Hedgehog” concept, doing one thing and doing it well. In his book Good to Great, he uses the parable of the clever, devious fox and the simple hedgehog. The fox keeps coming up with new ideas to eat the hedgehog, but the hedgehog handily defeats him by doing his one trick: rolling into a thorny ball.
The concept requires the intersection of three answers: What are you passionate about? What can you be the best at? What can actually make you a living? And the answer must meet all three criteria.
This exercise can also be used by young people trying to sort their way in life, their personal hedgehog, as much as a business trying to figure out what purpose they serve.
At his website, www.JimCollins.com, he offers various assessment tools and writings for free.