Hedgehogs and their technology platforms

About foxes and hedgehogs

An ancient Greek parable from the Greek poet Archilochus [1] states, "The fox knows many things, but the hedgehog knows one big thing." Philosopher Isaiah Berlin applied this parable to the modern world in his 1953 essay, "The Hedgehog and the Fox,” dividing people into foxes and hedgehogs.

He argued that the foxes pursue many goals and interests at the same time. As a result, their thinking is scattered and unfocused, and ultimately, they achieve very little. Hedgehogs, however, simplify the world and focus on a single, overarching vision, which they then achieve.

In his classic 2001 book "Good to Great" [3], Jim Collins developed the idea that successful organizations learn the art of simplicity, like a hedgehog, creating a clear focus for their organization, identifying one thing they do best – their Hedgehog Concept.

An enterprise technology platform is a company's operations and customer engagement backbone. Like hedgehogs, companies who simplified the world and focused on a single, overarching vision, applying their Hedgehog Concept to their technology platforms, achieved superior performance and sustainable growth.

A competitive advantage or a merciless value sink

Ignited by the momentum gained from combining the Y2K imperative and promises from Business Processes Redesign (BPR), ERP technologies have outstandingly evolved and expanded to composable enterprise applications. In addition to basic ERP capabilities, modern platforms enable other key capabilities like customer relationships management (CRM), supply chain management (SCM), and Human Capital Management (HCM).

When well-architected, integrated, and deployed, these platforms are powerful business growth enablers and M&A accelerators and establish a solid basis for continuous improvements.  It’s not a surprise the global enterprise application market keeps growing. Its size was valued at $238.36 billion in 2020 and is projected to reach $527.40 billion by 2030, growing at a CAGR of 8.2% from 2021 to 2030 [2].

Nevertheless, you’ve probably heard or read many horror stories of failed enterprise-scale technology implementations. You may have seen one if you’ve been striving on the enterprise ladder for a while.

Reasons for failure vary as much as the colors of the rainbow: ineffective project management, technology issues, poor business process redesign, inexistent organizational change management, underestimated costs, weak value realization, etc. They left a trail of wasted opportunities, damaged reputations, and lengthy lawsuits—no need to mention company names here.

Despite all known (and unknown) epic failures, countless examples of success stories did not get much press coverage but proved the value of a great enterprise technology platform. Cases like Western Digital, which leveraged it to merge three businesses; Grupo Bimbo, which used it to fuel a tenfold revenue growth through an accelerated international expansion; and Nestle, which integrated all three of its operating companies Nestle SA, Nestle UK, and Nestle USA.

How did these successful companies apply their Hedgehog Concepts in their enterprise-scale technology implementations? Let’s discuss the one big thing I learned from my experience partnering with business leaders from the Americas and Europe to design and implement technology platforms for sustainable growth.

Archilochus

It's not just about the technology - it's what you do with it that matters

It doesn’t matter what type of business you’re in. The core principles of the People, Process, and Technology framework can make or break it.  It reminds us that change is never siloed. It will impact an organization’s multiple facets, whether intended to or not.

Far too often, business transformation efforts concentrate on adopting new technologies or redesigning business processes while essentially ignoring the people aspect of the change initiative.

Your people bring your company’s vision to life. Ultimately, they are the ones who make decisions and get the work done.  They need to understand what’s in it for them, their roles, and responsibilities in the desired future state. They also need support to develop the required skills, knowledge, experience, and capabilities.

I’ve learned that building a culture that embraces change is an exponential multiplier factor. Organizational resiliency and agility emerge whenever there’s enough psychological comfort for people to speak their minds without fear of negative consequences, collectively identify any reasons for internal resistance to change, and work to overcome those challenges before they happen.

Business processes guide teams through the proper steps and protocols when executing tasks. Business Process Reengineering is a dramatic change initiative that refocuses company values on customer needs (value streams) and eliminates non-value-added work, reorganizes a business into cross-functional teams with end-to-end responsibility for a process, simplifies and standardizes overly complex work, and automates repetitive work. It helps organizations to determine appropriate roles for third parties or outsourcers, focusing on where they truly add value..

The underlying technology solution will do whatever you want it to do. Beware of common pitfalls in reengineering your business processes and technology components:

• Reinventing the wheel, wasting precious time and resources trying to develop “innovative and optimized” business process designs where well-known best practices already exist and are ready to be used in off-the-shelf commercial solutions.
• Snowflake syndrome, believing in the uniqueness of some functions or lines of business, deviations from best practices force unnecessary customization of off-the-shelf solutions that result in an underperforming and costly to maintain Frankenstein.
• “We are the Borg, resistance is futile,” taking business processes standardization to an extreme, neglecting specific and legitimate needs of business units or lines of business and potentially destroying value. It’s common in “global versus local” discussions in enterprises trying to consolidate multiple operations into a single platform or integrate M&As.

Applying the Hedgehog Concept to your enterprise technology platform

The right approach centers teams on tech products and focuses them on business goals and the overarching vision of your Hedgehog Concept [3]:

1. What are your people genuinely passionate about?
2. What does your organization do better than anyone else?
3. Where it's good at generating revenue?

Focusing on a single, overarching vision

If you and your company are starting a journey to build an enterprise technology platform, don’t be like a fox. Don’t pursue many goals and interests at the same time. 

Be like a hedgehog and remember that it's not just about the technology - it's what you do with it that matters—with a down-to-earth, pragmatic, committed-to-excellence process, keeping your leaders and your people on track for the long haul.

Your company might not get much press coverage, but it will undoubtedly be an example of success that proves the value of a great enterprise technology platform.

References

[1] - The Hedgehog and the Fox

[2] - Enterprise Application Market Statistics: 2030

[3] - “Good to Great: Why Some Companies Make the Leap, and Others Don't,” Jim Collins, 2001.