The Flywheel Effect
Exploring the power of simple reinforcing loops executed over time
Picture a huge, heavy flywheel — a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and long as possible.
Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn.
You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns … four … five … six … the flywheel builds up speed … seven … eight … you keep pushing … nine … ten … it builds momentum … eleven … twelve … moving faster with each turn … twenty … thirty … fifty … a hundred.
Then, at some point — breakthrough! The momentum of the thing kicks in your favor, hurling the flywheel forward, turn after turn … whoosh! … its own heavy weight working for you. (Jim Collins — The Flywheel Effect )
Jim Collins developed this concept through his book “Good to Great” and has recently release a monograph further expanding on the idea. The flywheel is a subset of systems thinking where the system is a reinforcing loop that has the potential to really take off over time.
Brad Stone describes an early version of Amazon’s flywheel in The Everything Store :
… Bezos and his lieutenants sketched their own virtuous cycle, which they believed powered their business. It went something like this: lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned, and it should accelerate the loop. (Quoted in Inc)
Providing a personal example in his interview with Tim Ferris, Collins outlines the flywheel that has driven him over the years:
It all starts with what am I curious about? That has to be at the beginning of everything. If I’m really curious about something, well then I can’t help but want to learn about it and do research on it. That will throw me into the research. If I do the research right and really, really throw ourselves into it and stand those creative hours of the research, well then I can’t help but have ideas and insights, concepts that come out of that research. Then, if I have those, then I can’t help but want to write them and teach them and share them.
To write them well and to wrap them well and to get the concepts and the right vessel, I can’t help but want to do that. If I do that, well then I can’t help but have at least some impact on the world if it’s well done. That’s the power of writing. You never know where it goes. If you have impact and reach in the world, well then you can’t help but have funding that comes from that, meaning there’s some economics that comes that allows you to do what?
Fund and feed your next curiosity big questions, which then leads to the research, which then leads to the chaos to concepts, which then leads to writing and teaching, which then leads to impact on the world, which then generates funding, which then allows me to fund the next question. Then, it’s perpetual.
Terry St. Marie highlights how important it is to provide “grease” to ensure the steps in your flywheel have as little friction as possible. Giving the example of good leadership to drive the core flywheel concepts in an organisation, he highlights how “grease” comes from:
- Connecting the goals with the values of the business
- Distilling that connection into a simple message
- Pushing that message down to EVERY person
- Reinforcing the message, relentlessly
Imagine the “grease” effect of everyone knowing what the main goals are, how they are connected with the core values of the business, and how the achievement of those goals will positively effect them, well beyond their paycheck. That’s total enterprise alignment.
In his monograph, Collins also goes on to talk about how companies fail — either through reinforcing the wrong behaviors or abandoning the flywheel concepts that gave them success.
In studying the horrifying fall of once-great companies, we see them abandoning the key principles that made them great in the first place. They vest the wrong leaders with power. They veer from the First Who principle and cease to get the right people on the bus. They fail to confront the brutal facts. They stray far beyond the three circles of their Hedgehog Concept, throwing themselves into activities at which they could never become best in the world.
They subvert discipline with bureaucracy. They corrupt their core values and lose their purpose. And one of the biggest patterns exhibited by once-great companies that bring about their own senseless self-destruction is failure to adhere to the flywheel principle
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