A year of political polling, talking heads and pundits have given a bad name to forecasting and forecasters – especially the segment known as hedgehogs. But for all their flaws hedgehogs can guide their organizations as well, perhaps better, than their counterparts – the foxes. In truth, successful organizations have a mix of both.
The research and literature of the science and art of forecasting divides the world into hedgehogs and foxes. The labels and definitions come from an essay by philosopher Isaiah Berlin.
- Hedgehogs know one big thing. They hold a specific worldview that they interpret conditions and situations through. In the most extreme, hedgehogs believe all things are guided by a big underlying principle—capitalism, communism, consumerization of technology—to the point of dogma. Even more moderate hedgehogs tend to have biased perceptions which makes their record as forecasters no better than chance. Hedgehogs come in all political, philosophical and business shapes and sizes.
- Foxes know many little things. They tend to hold back judgements and approach the world from a neutral standpoint, or at least more neutral relative to hedgehogs. Because they aren’t predisposed to view the world through a specific rubric they see a wider set of dynamics shaping situations and conditions. Analysis of forecasting success—getting it right—shows that foxes do a better job than hedgehogs.
This oversimplification of a simplification makes it seems as if foxes would make better managers and leaders than hedgehogs. This isn’t necessarily true. The benefit of being a hedgehog or fox depends on context and the objectives at hand.
The traits that make a hedgehog less effective as a forecaster helps them be effective leaders. Building internal momentum for a new product, entering a new market, reaching a revenue goal or running a startup requires passion and a degree of unbridled optimism and bravado. A hedgehog’s worldview helps them create clear, simple to communicate narrative, of what is happening and what needs to be done. This helps build enthusiasm and commitment among the troops. The fox’s narrative which to a degree says, it’s complicated, it depends on a number of things, and here is the most likely outcome, but not a definite one, isn’t always all that compelling – even if it presents a more accurate description of the world.
The risk of course is the hedgehog’s approach can blind them, and their organization, to competitive and market threats and risks. Many market failures stem in some part from doggedly pursuing a course that is at odds with market dynamics. This is an acute risk in when the conditions or markets are in transition. Startups can overestimate the readiness of the market and the paradigm shifting power of their new product or service. Companies that have been successful doing the same thing for decades dismiss new competitors and ways of doing things. Compounding the problem is that with time foxes can turn into hedgehogs. Internal teams start to view the world from the perspective of their product rather than the other way around. They drink the proverbial Kool-Aid. This is human nature. When you live and breathe your product or service every day it shapes how you understand your customer and markets.
The best leaders and management teams have a mix of traits from both camps – they possess a clear narrative vision informed by a thorough understanding of the dynamics of their markets. The problem is these individuals and teams with these traits are hard to come by. There are only so many Jobs, Bezos, Welches, and Buffetts to go around.
If you worry that your organization has tilted too far into the hedgehog camp, market research can bring foxes, or at least a fox’s perspective, back to your strategies. When done well secondary and primary research can provide an unbiased understanding of the dynamics underlying your market: Your customers’ and prospects’ needs, priorities and opinions and perceptions about their options (including your product/service). With this you get the best of both approaches. The hedgehog’s perspective can rally the troops; the fox’s perspective can point the troops in the right direction.