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Many leaders believe in the allure of a magnificent idea, killer innovation or magic strategy that creates amazing results and sky-rocketing profits. But just how true is this?

Jim Collins, author of  ‘Good to Great’ says huge, sporadic turns aren’t where success is. He says instead that, when building greatness, there is no single defining action, no solitary lucky break or miracle moment. “Instead, the process resembles relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough.”

The power in compounding effort

The Flywheel effect describes a process of pushing with great effort, and by doing so you get the flywheel to inch forward. At first, any movement will be barely noticeable, but if you keep pushing after a sustained period of dogged effort, you get the flywheel to complete one entire turn.

The flywheel strategy says great results come about by a cumulative process; action by action, decision by decision, step by step, turn by turn of the flywheel and that adds up to sustained and spectacular results.

Not overnight, but big long term success

A company which has successfully applied this strategy is Amazon. In the case of the e-commerce giant, the flywheel is centred around lower prices, which bring more customers and attracts more sellers who improve the goods selection.

Over time, as more customers have shopped on Amazon, they have increased the volume of sales and attracted more commission-paying third-party sellers to the site. That has allowed Amazon to optimise and reduce fixed costs like the fulfilment centres and the servers needed to run the website, in turn they were able to offer lower prices, which led to more customer visits. As the company realised greater efficiency, its flywheel has gained momentum and it was able to lower prices further.

Optimising any part of the flywheel accelerates the entire loop and with Amazon’s profits tripling in the first three months of 2021 at $8.1bn, this strategy has proven itself to be resilient and effective.

Each turn of the flywheel builds upon work done earlier, adding together in an overall accumulation of effort applied in a consistent direction. Some thrusts may have been bigger than others, but any single push, regardless of might, contributes to the entire cumulative effect upon the flywheel.

Applying the flywheel to your organisation

The Flywheel strategy works for any organisation, of any size in any industry. To get full power of the  flywheel, leaders should ask what the unique components they are working with are, how their flywheel turns, what the sequence is and how can they improve for their business.

Collins says many organisations are pursuing change, but they lack the dogged discipline that produces the Flywheel Effect. Instead, they launch change programs with great excitement, hoping to fire up their teams. They embark in one direction, only to change down the line. After years of swaying back and forth, they realise that they haven’t built any sustained momentum. Instead of turning the flywheel, they’ve fallen into a Doom Loop: a steady, downward spiral.

The Flywheel has four primary components and these can be applied to any organisation:

1) Build cumulative momentum.

2) Be relentlessly consistent over time.

3) Create alignment by results, not hoopla.

4) Avoid the Doom Loop.

Collins says the real work of the economy is not the glamorous stuff; it gets done by people who make cars, who sell real estate, and who run grocery stores or banks. Working the flywheel entails a lot of drudgery with only a few moments of excitement.

Why don’t more companies do it?

Simply, the flywheel isn’t as sexy or exciting as strategies which offer a big bang.

Collins says organisations that go from good to great have no name for their transformation and little fanfare. They neither rant nor rave about a crisis, and they don’t manufacture one where none exists.

With the flywheel, you aren’t looking for a miracle moment. Instead, the approach is a down-to-earth, pragmatic, committed-to-excellence process which keeps the organisation, its leaders, and its people on track for the long haul.

Collins says most overhyped change programs ultimately fail because they lack accountability, fail to achieve credibility, and have no authenticity.


By Maanda Tshifularo: CEO: SuperLead Advisory

Strategy that stays the course requires a lot of fore planning and commitment. Are you ready to take that step into a space of sustained effort for plenty of future reward? We are ready to talk to you about your strategy. Contact us at maandat@superlead.co.za

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