Over the last 30 years, I have read many business books and magazines. Few have been as meaningful as Jim Collins’ work Good to Great. In particular, his chapters on Level 5 leadership (subject of a post to come) and the Hedgehog Concept have become guiding principles.
My top of mind take on our Hedgehog Concept:
World Class: Fitting windows and doors that meet the owners / architect / builder objectives, optimizes the tradeoff between performance, aesthetics, and price, and saves time and money buy getting the details right the first time.
Economic Model: Profit per order
Passion: Improving how a home or a commercial building “feels” to live in or experience
It’s a start, but not crisp enough nor does it do a great job of conveying our passion
Thoughts?
2 responses so far ↓
1 David Dwight // Oct 4, 2007 at 1:43 am
Gwenael;
I too love Jim Collins’ books and I’ve read most of the “business strategy” genre in the past few years. I saw him speak a few times while I was in grad school. Two key points from his talks stick in my mind: its not about the what but about the who and breaking the tyrany of the “OR.”
I think part of your passion statement could include combining flavors from Collins’ concept of embracing the AND with one of Amory Lovins’ favorite lines (Amory is referenced in one of the other posts on your blog and I happened to have worked for him for 3+ years a few years ago) “doing well by doing good.”
Regarding your economic model; how did you come to profit per order? Did you consider alternatives such as;
- profit per customer (OK to have profit vary by order as long as the relationship is netting profits),
- shared (between you and your channel partner) profit per consumer (in the spirit of true partnership with those who are, no doubt, critical channel partners prior to the final consumption of your product),
- profit per earned-hour (places a healthy premium on getting things done right the first time and valuing low or efficient labor content)
What are you NOT going to be the best at?
Au revoir
2 Gwenael Hagan // Oct 12, 2007 at 9:21 am
David, insightful thoughts – as usual. On the economic model, I like profit per order as the nature and number of projects our customers undertake can vary greatly. However, you are right the we routinely and happily will sacrifice margin on a particular order if it means doing the right thing for our customer or their customer. I think we arrive at the same point if we look at a years worth of activity with a given customer and determine that we hit our profitability parameters and built on the relationship.
From a passion perspective, I have much work to do on articulation and will study the points you raise. At this point, we get a real kick out of helping people understand the “art of the possible” and subsequently crafting that “art” into their design, budget, and goal parameters. This is a much bigger undertaking than taking a window order.
Lastly, what are we not going to be best at? We will never cater to the low-end production builder where price trumps quality and we there is no premium placed on service. This means our operations will not be tuned to high volume throughput.
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