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Moving your winery from good to great


Have you found your Hedgehog Concept?

The astonishing growth in the B.C. wine industry has been well documented. In 1984, the province had 13 licensed wineries. Today, we have 136, with another 14 licences pending. With numbers like these in a small geographic area, the competition for consumer attention is increasingly intense.

There are lots of good wineries now making good wine out there. It remains to be seen which ones will be successful in emerging from the pack of good B.C. wineries to establish themselves as truly great over the long term.

In his best-selling book, Good to Great, author and Stanford University faculty member Jim Collins conducted an exhaustive and thorough study into this very question: Why do some companies manage to rise from the pack of good companies to enjoy truly great results over the long term, while other, seemingly solid companies eventually fall by the wayside? The common factors Collins and his research team found among their “good to great” companies are both insightful and surprising.

In my mind, one of Collins’ five key factors is particularly relevant to the B.C. wine industry today. To describe it, Collins borrowed from Isaiah Berlin’s essay, “The Hedgehog and the Fox.” The fox is a sleek and cunning creature, able to devise many strategies in an attempt to achieve his goals. The hedgehog is a smaller, slower creature. He waddles around each day looking for food and caring for his home. Each day the fox plans a dazzling attack, appearing to be the easy superior of the two. But the hedgehog, despite all his apparent shortcomings, knows one big thing: by rolling into a tight ball, his spines will thwart off the fox’s attack every time.

The distinguishing feature Collins found in the companies he studied was that the “good to great” companies were very much hedgehogs. They were able to drive towards that one clarifying concept which paved the path to their greatness. In contrast, the fox companies tended to be scattered, diffused and inconsistent in their strategies.

Collins calls this powerful, yet rather simplistic vision a “hedgehog concept.” Without exception, once the companies in his study found their hedgehog concept, they quickly rose out of the pack to become great companies. The companies that failed to identify such a concept might show short-term greatness, but lacked staying power and eventually fell back or failed to survive.

So how does your winery find its hedgehog concept? It is not easy, to be sure – it took many great companies years. Collins suggests your concept is borne from the answers to three key questions:

1. What are you passionate about?

Most winery owners have this one nailed. You seldom find anyone in this industry who is not passionate about growing great grapes and making great wine. But what else are you passionate about? Making the Okanagan a world class wine tourism destination? Providing an unforgettable experience to your winery visitors?

2. What do you have the potential to be the best at?

This is a tough one. The answer is not necessarily what your winery is best at right now. In fact, it may not even be something you are currently doing. Answering this question requires a deep dive into your winery’s strengths and weaknesses and knowledgeable insight into the opportunities and threats present in the environment in which it operates.

There is a subtle distinction here – the idea is not necessarily to figure out what you want to the best at. Rather, the goal is to develop a deep understanding of what your winery has the potential to be the best at: In the Okanagan, Canada, North America or the world.

3. What drives your economic engine?

The good to great companies were able to develop profound insight into the specific factors which drove profit to their bottom lines. Out of a these handful of key factors, they chose to limit their focus to just one.

What is the key factor for your winery? Is it profit per customer, per case, per sales transaction, per sales channel? Or is it something else? Without exception, the good to great companies focused relentlessly on one key economic driver within their businesses.

Your winery’s hedgehog concept is found where the answers to these three questions overlap:

1. What are you passionate about?

2. What can you be the best at?

3. What drives your economic engine?

For example, your winery’s hedgehog concept could be, “to maximize profit per customer visit by providing the most memorable medium-sized winery experience in Canada.” Your hedgehog concept then provides a framework for evaluating all future strategic decisions. Quite simply, a strategy is either consistent with your hedgehog concept, or it isn’t.

This may sound extreme, but Collins found the companies that identified their simple concept and followed it relentlessly were, by far, the most successful in the long run. These companies were often not as flashy as their fox-like competitors, but their “hedgehog-like” dedication to one simple overriding principle helped them outperform and outlast the foxes in their industries by a wide margin.

So, will your winery be a fox or a hedgehog? Finding your hedgehog concept may not be easy, but it is well worth the effort.

By Geoff McIntyre, CA. Geoff is a business advisory specializing in wineries with Meyers Norris Penny Chartered Accountants and Business Advisors.