The best business book I've ever read is Good to Great.

The author (Jim Collins) spent 10 years studying 1,435 companies. His goal was to answer the question: "Why do some companies make the leap from good to great while others do not?"

There were 3 things the great companies did that their competitors did not:

  1. Developed a hedgehog concept
  2. Documented their flywheel
  3. Created a BHAG

In this email, I'm going to show you what these are and how you can apply them to your business.

You'll also see how I'm brainstorming them for Growth Tools, so you can get some inspiration for your own.

Thing #1: Developed a hedgehog concept

This is a crystal clear understanding of what they could be best in the world at, what they were deeply passionate about, and what would drive their economic engine.

It's not a goal. It's an understanding of what they are.

Example:

Amazon's hedgehog concept is to sell the most products at the lowest prices on earth.

Sidenote: If you want to know why this is named after hedgehogs, read the book. :)

Thing #2: Documented their flywheel

A flywheel is the underlying architecture of how you execute on your hedgehog concept. It's built-in a way that naturally creates momentum over time.

Example:

Amazon's flywheel:

  1. Lower prices on more offerings
  2. Increase customer visits
  3. Attract third-party sellers
  4. Expand the store, extend distribution
  5. Grow revenues per fixed cost

In between each step of your flywheel you should be able to insert the sentence: "If you do A, then you almost couldn't help but then do B."

It's easy to see how it works in the Amazon example:

"First we'll offer the lowest prices on more offerings. If we do that, then we almost couldn't help but to increase customer visits. And if we do that, then we almost couldn't help but to attract third-party sellers…"

There's an inevitability of momentum built into a properly constructed flywheel. It's not just a list of steps. It's an architecture that produces momentum.

Thing #3: Created a BHAG

This is a Big Hairy Audacious Goal.

Think of it as a vision. Where will the flywheel take you if you keep pushing it for 50 years?

It's not necessarily a destination, but something that inspires you.

Example:

Amazon's BHAG is to make it irresponsible for everyone not to be a Prime member.

How You Can Use This:

Taking the time to distill these 3 key concepts and then having the discipline to stay focused on them produced great companies.

So for the last 2 weeks, I've been working on doing the same for Growth Tools.

Here is my draft of our hedgehog concept, flywheel, and BHAG

Your action items:

1. Read my draft. Use it to spark your own thinking.
2. Share your BHAG with me.

Chat soon!

- Bryan