The Hedgehog and the Fox

Konstantin Josseliani

Modern management theory divides companies into two types. The first type are “hedgehog” companies. At first glance, these companies come across as ponderous and slow: they take forever to come to a decision, spending a long time weighing up pros and cons and choosing a development strategy. Once they have chosen their path, however, they follow it closely.

On the opposite side are “fox” companies, which—as their name suggests—are highly dynamic and resourceful. They are constantly seeking out new opportunities and testing out different ways to grow their business. They also frequently fail to adequately think through their decisions and consequently end up abandoning projects part way through, whenever they come across something new that looks promising.

Applying this concept to the translation industry is an interesting exercise. Looking closely, it’s clear that this sector also has its hedgehogs and foxes. There are translation companies who, having chosen their preferred path a long time ago (perhaps they specialize in a particular industry such as health or IT, or in certain services like software or games localization), stick to it rigorously, regardless of the changing environment around them. These companies may seem slow, but once they pick up the required speed, they generally post growth rates significantly above the industry average. It’s fair to say that they “start slow but move fast.”

At the same time, there are plenty of examples of fox companies, also known as generalists. These companies do everything and, at the same time, nothing, because they have no clear industry or service focus. To clients, they appear bland, offering no unique selling points. There are also instances of fox companies leaping straight from the frying pan into the fire. A greater need for video remote interpreting has emerged, so the foxes in the industry have immediately started to offer this as a service. Equally, as the demand for medical and pharmaceutical translation has risen, the foxes have been right there, building up a medical translation service from scratch. Can such an approach succeed? Generally speaking, no. Successfully developing any service requires a long-term strategy. You need to spend years establishing the infrastructure and forming a team.

How can translation companies focus strategically on their strengths and act like hedgehogs?

First of all, it’s critical to look carefully at what you are doing and understand your areas of expertise. What do you enjoy doing? What do you do better than other companies out there? As noted above, this question can be answered in different ways. Some companies might specialize in particular industries or focus on specific services. For example, there are well-known successful companies in the industry who specialize in one or two fields (games, health, IT, etc.) or in a particular service (interpreting, for example). It’s important not to have too many specialisms. For me, three or four is the maximum, otherwise the company’s focus will become scattered.   At Janus Worldwide, we specialize in four major sectors: IT, health, technology and digital marketing/e-learning.

The next important factor to consider on your route to becoming a hedgehog is whether your team will enjoy the work that they are focusing on. Job satisfaction is a critical part of the strategy. It’s virtually impossible to do something better than anyone else if you’re not happy. On that note, establishing your team and developing an incentive system is another key task. And it’s not just about the money – think about non-financial incentives as well.

A third factor lies in the need to create a business model that will be profitable. You can be the best at what you do and have a great time doing it, but if your business is not making a profit, then at the end of the day, it’s just a hobby. So once you’ve identified your area of expertise, where you will outshine your competitors and derive satisfaction from your work, you need to develop a business model that will earn you money.

You can’t become a hedgehog in a day—it takes months, or even years. But once you’ve figured out the concept, chosen the team who will bring it to fruition and put in place an incentive system, you’re likely to enjoy growth that significantly outpaces the market average. I’m naming no names, but we’re all aware of companies in the translation industry who’ve got there.

Ultimately, the final stage in every company’s development requires it to clarify its strategy. Do you want to be a specialist or a generalist? A hedgehog or a fox? The decision is up to you. But it’s vital to understand that your company’s long-term success is heavily dependent on making the right choice. So, don’t rush, take your time…