The Flywheel and the Doom Loop
" How can you tell you are in a Flywheel or in a Doom Loop "
The flywheel is a heavy metal wheel, mounted horizontally on an axle and that needs an exertion of a great force in order make rotate. At the beginning, the flywheel is moving an inch forward. With a constant push in a consistent direction, it moves thoroughly and even completes an entire turn. To keep it rotating, you have to maintain a sustainable effort until it reaches its momentum and builds up a breakthrough speed. In a Good-to-Great company, they follow a pattern and build up breakthrough. The pattern they use is the flywheel effect. They reach the breakthrough by accumulating the momentum of the flywheel. However, in a doom loop company, they have an inconsistent direction. They change the spin strategies and most likely they easily fail. They skip patterns. They want to have a big change immediately without considering the risks. They implement chronic restructuring and always look for a miracle moment. In a Good-to-Great company, there is no miracle moment. Some people think that the big change that happens in the company is what we called "miracle moment". But it was definitely wrong!!. Considering an "egg". It just sits there. No one pays attention to it and then one day the egg cracks. All of a sudden, the media jump on a story: "The Transformation of an Egg to a Chick" as if the egg suddenly changed itself. While the outside world is ignoring the egg, the chick is evolving, growing, developing and changing. From the chicken's point of view, the moment of breakthrough, the cracking of egg, is just one of the steps in a long process of steps that led up the chick to that moment.
Good-to-Great companies follow the principle of disciplined people ("first who"). It is first the people, then the direction. They get the right people on the bus, the wrong people off the bus and the right people in the right seats. They make sure that the people are on the their way to push the flywheel in the same direction. They spend little time to motivate people, as the people are self-motivated. The momentum of a flywheel is infectious. When they see a good result in the momentum of the flywheel beginning to build up, that is the time the people become motivated to help push the flywheel. On the other hand, the Comparison companies spend lots of energy to align people and rallying new visions.
Major acquisitions are used in the Comparison(doom loop) companies as their creator of the momentum. On the contrary, in the Good-to-Great (flywheel) companies, they use major acquisitions as their accelerator of momentum in an already fast-spinning flywheel.
Therefore, if you persistently and patiently apply the hedgehog concept (Focus on what you are passionate about, what you can become best in the world at and find its economic engine) and continue to push the flywheel in a consistent direction, accumulating momentum step by step, you will eventually reach breakthrough. Though it is a slow-long process it is a sustainable process. It will not happen today, tomorrow nor next week, not even next year but it will happen!. As a matter of fact, most Good-to-Great companies reach their momentum and build up breakthrough in a span of 10-15 years. And when it happens, another challenge to face. It is how to accelerate your momentum, keep it going and how to make it last.