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“Brand strategy” is a flawed phrase. No one understands it; everyone means something different by it. But management researcher Jim Collins defined the core of great brand strategy, based on years of research into how good companies become great ones. His findings encapsulate what every inside-up branding process should strive for.  

In his seminal 2001 book Good to Great, Collins and his team of researchers sifted through thousands of public companies to emerge with eleven that fit a very particular profile: they had 15-years of performance at or below the market, followed by performance at least three times the market over the next 15 years. In other words: companies that went from good (or even bad) to truly great. Collins and his team then went to work systematically researching those eleven companies, which included Kimberly-Clark and Gillette, seeking to understand the secret of their remarkable transformation.

One of Collins’s key findings was this: companies that went from good to great all arrived at a sharp clarity of focus regarding the business they should be in. In fact, this was the piece of the puzzle – after the right leadership and the right team – that most immediately preceded their breakthrough. Collins called this the Hedgehog Concept, and he defined it as the intersection of three circles.

Importantly, answering “What can you be the best in the world at?” often required a company to look past its core competencies, and even its historical core business. After all, an organization can be very, very good at something, without any hope of being the best. What do your culture and capabilities uniquely qualify you for?

Meanwhile, answering “What drives your economic engine” – and specifically defining the denominator in “profit per x” – helped puts the right metric in place to keep the organization focused.

For instance, Walgreen’s Hedgehog Concept was becoming the best at convenient drug-stores, reinforced by maximizing profit per customer visit (instead of profit per store). Kimberly-Clark’s was becoming the best in the world at paper-based consumer products, reinforced by profit per consumer brand (instead of profit per paper mill).

As Collins said, “when the good-to-great companies finally grasped their Hedgehog Concept, it had none of the tiresome, irritating blasts of mindless bravado typical of the comparison companies. ‘Yep, we could be the best at that,” was stated as the recognition of fact, no more startling than observing that the sky is blue or the grass is green. When you get your Hedgehog Concept right, it has the quiet ping of truth.” When I’m working with a client, this moment of realization almost always feels both painfully obvious and oddly surprising.

Now, Collins also points out that, on average, it took four years for good-to-great companies to clarify their Hedgehog Concepts. “Like scientific insight, a Hedgehog Concept simplifies a complex world and makes decisions much easier. But while it has crystalline clarity and elegant simplicity once you have it, getting the concept can be devilishly difficult and takes time. Recognize that getting the Hedgehog Concept is an inherently iterative process, not an event.”

In other words: great Hedgehog Concepts aren’t, as a rule, born fully-formed in a two-day workshop with a consultant like me.

But what we can do is accelerate the process – by gathering and integrating information from across the organization without preconceptions, and then collaborating to prototype and iterate your Hedgehog Concept dozens of times over the course of weeks, instead of over the course of years. A good brand strategy process won’t get you all the way there, but it should give you a firm push in the right direction – to be further refined and tested as your business evolves.

And that’s Great Brand Strategy in a Nutshell: Figure out what business you were born to be in, and then deliver on it with laser-like focus.

 

This post  is based on Good to Great: Why Some Companies Make the Leap…and Others Don’t by Jim Collins (HarperBusiness, 2001) pages 90-119.