Small Business Strategy – Taking Your Business From “Good To Great”

In 2002, Jim Collins published “Good To Great” a business book that has become required reading for all who want to create a successful business and understand the role that strategy plays.

However, many small business owners and entrepreneurs often don’t know how to apply those ideas to their business. The book, after all, spotlights very successful large corporations like Walgreens and Gillette.

Even so, large successful corporations provide many valuable lessons in strategy for the small business owner, in how to create a successful venture.

The 3-Circles Concept

Collins discovered that the great companies became successful by understanding these three ideas in regards to their business, and he illustrates it by using three interconnected circles:

  1. What they’re deeply passionate about
  2. What they can be the best in the world at, and
  3. An understanding of how these can create profits for the company.

It’s exactly the same when you’re creating your business.

Passion

First, your business must be built on something that you feel passionately about. In other words, for you to create a successful business, you need to look forward to jumping into your work, every day.

Nothing can substitute for that belief in what you’re doing.

Why? Because success requires a sustained effort over months and years.

And it’s impossible to work hard at something, over years, if you don’t feel passionately about it.

Being The Best

Secondly, the goal of becoming the best in the world means something quite different to the small business owner. Attorneys, chiropractors and accountants may find it a challenge to relate to the idea of being “the best in the world”.

If you’re a small business owner, it’s more useful to think of this idea in a different way: becoming world-class at what you do.

You may never know whether you’re the best in the world, but you CAN know whether you’re world-class and whether your clients think that you’re exceptional.

Creating Profits

As you continue to build a world-class business, and you continue to do work you’re passionate about, it’s vital to understand your economic model.

This means deciding how to measure your success.

Will you use x dollars per customer?

Is it x dollars per day?

Is it x widgets per week?

Getting a focused idea of how you’ll measure your success, aside from money left in the bank at the end of the month, is crucial.

The next important strategy idea from “Good To Great” is what Collins calls the Hedgehog Concept.

Hedgehog Concept

By this, Collins is referring to companies acting like a hedgehog; that is, seeing what’s essential to their business and ignoring the rest.

Many small business owners find it very easy to get distracted and begin to work on things outside their 3-Circles.

Hedgehogs put their head down and stay focused on actions and efforts that will further those goals of their 3-Circles.

So what is your hedgehog concept?

It’s those activities that will make you “world-class” at what you do. Anything else will hold up your success.

Your Hedgehog concept includes those activities that will make you “world-class.”

Cool new ideas and once-in-a-lifetime opportunities are irrelevant if they don’t fit within your 3-Circles.

In fact, by focusing on your 3-Circles, you’ll create new and better opportunities.

When you focus on your 3-Circles and then on a day-to-day, month-to-month, year-to-year basis, work like a hedgehog on making it happen, you’ll take your small business from good to great.

Photo: www.flickr.com/photos/striatic/