A gap in the flywheel
I’m a longtime fan of Jim Collins, but I hadn’t read Turning the Flywheel until a few weeks ago. I’m glad I did. In just a few pages, Collins extrapolates his concept of the flywheel from Good to Great by sharing examples of other successful flywheels across industries. Their examples created a lightbulb moment for me: my business had a gap in its flywheel!
Collins's idea of a flywheel was simple. He argued that every great business, no matter the industry, has a fundamentally simple business model. The model is a series of 4-6 successive steps that naturally flow from one to the other. If each step in the model is executed successfully, the process starts over again--this time, with more momentum. After 100 or 1,000 or 1,000,000 turns of the flywheel, success starts to pile up for business. The takeaway: don't over-complicate your business or lose heart when momentum is still building. Focus on executing each stage of the flywheel every time and let the future take care of itself.
When I launched my leadership development business a few years ago, I began with the assumption that if I produced incredible results for my clients, the business would naturally grow. Fortunately, that assumption proved true. After two years of hard work, I was getting more and more opportunities to coach and train leaders here in the Midwest and around the world. But ironically, it was that growth that revealed a gap in my flywheel.
By saying Yes to as much business as possible, I’d eliminated all the margin I used to have when I was just getting started. In the early days, I could devote ample time to my few clients and prepare extensively for workshops or coaching calls. I was reading a ton and plowing that new knowledge into existing workshops to make them even sharper. But as my time became scarcer, I had less margin to devote to that investment. While I was still doing a solid job for my clients and referrals were still coming in, I noticed that the spark—the transformation I was hoping for—wasn’t always there. I had been assuming that transformational experiences would occur just because I showed up, but that wasn’t the case.
What Turning the Flywheel helped me realize is that I need to plow profits back into research and development, ensuring that I am always taking as much time as needed to prepare for a client and invest in my own ongoing development. Doing so requires saying “yes to less”—or as industrial designer Dieter Rams puts it, “less, but better.” My new assumption is that doing so will enable me to sign better, more profitable clients which further enable me to invest in R&D. If I’m right—and if I can continue to execute each stage of the flywheel—the flywheel only spins faster and faster.
So grateful to Jim Collins for sparking this insight! If you are running a business unit, I’d highly encourage you to pick up a copy of this monograph.