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Once you fully grasp how to create flywheel momentum in your particular circumstance (which is the topic of this monograph) and apply that understanding with creativity and discipline, you get the power of strategic compounding. Each turn builds upon previous work as you make a series of good decisions, supremely well executed, that compound one upon another. This is how you build greatness.
doom loop. When caught in the doom loop, companies react to disappointing results without discipline—grasping for a new savior, program, fad, event, or direction—only to experience more disappointment.
Amazon committed fully to its flywheel and then innovated aggressively within that flywheel to build and accelerate momentum.
What are the essential components? Which component comes first? What follows? Why? How do we complete the loop? Do we have too many components? Is anything missing? What evidence do we have that this works in practice?
What evidence do we have that this works in practice?
Constantly testing your flywheel. How did your business model translate to your flywheel and visaversa? What assumptions are implicit and need to be tested?
each component in the Vanguard flywheel isn’t merely a “next action step on a list”
but almost an inevitable consequence of the step that came before.
If you offer lower-cost mutual funds, you almost can’t help but deliver superior long-term returns to investors (relative to higher-cost ...
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you almost ca...
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In thinking about your own flywheel, it’s absolutely vital that it not be conceived as merely a list of static objectives that you’ve simply drawn as a circle.
It must capture the sequence that ignites and accelerates momentum.
the greatest danger in business and life lies not in outright failure but in achieving success without
understanding why you were successful in the first place.
When you deeply understand the underlying causal factors that give your flywheel its momentum, you can avoid Burgelman’s trap.
Understanding your flywheel gains perspective to continue to accelerate success. In young companies trying to reach success, this might translate to testing assumptions and building each step of the flywheel along the way
One of the biggest, and most common, strategic mistakes lies in failing to aggressively and persistently make the most of victories.
One reason why some leaders make this mistake is that they become seduced by an endless search for the Next Big Thing. And sometimes they do find the Next Big Thing.
Consistently developed compounded on the victory—that is, turning the victory into a flywheel. Vs, victory as an end and into the next battle—no momentum always starting over.
understanding the underlying architecture of the flywheel as distinct from a single line of business or arena of activity.
It is a principle of your business, a truth of its success that applies across domains. However, a flywheel is not genrrally applicable across markets and types of businesses. So, if you pivot or grow beyond your market or business type, you will need to build and understand your new flywheel
the memory-chip business careened into a brutal international price war.
What was the japanese company's flywheel? Higher quality, which drives customer adoption, which drives economies of scale, which drives lower cost per unit, which drives customer demand...even with their flywheel, intel started to lose! What are the limits of the flywheel?
the underlying flywheel architecture could apply just as soundly to microprocessor chips as memory chips. Different chips, to be sure, but very much the same underlying flywheel.
Because the market and industry were the same...if they moved to pcs or to software, different markets and industries, intel would have a different flywheel. And, companies in the same market and industry can have the same flywheel. So, the flywheel is a tool that is complementary to the hedgehog. Intel new hedgehog would be microprocessors on top of their flywheel
It was really more of a transfer of momentum from memories to microprocessors,
Intel could no longer be best in memories, so they find their new best to go with their flywheel, economic engine, and passion
The Big Thing is your underlying flywheel architecture, properly conceived.
Amazon flywheel has remained robust and relevant—thanks to renewal and extension—nearly
Constantly evolving and growing to accelerate momentum
Create a list of significant replicable successes your enterprise has achieved.
Compile a list of failures and disappointments.
“What do these successes and disappointments tell us about the possible components of our flywheel?”
Using the components you’ve identified (keeping it to four to six), sketch the flywheel.
You should be able to explain why each component follows from the prior component.
Test the flywheel against your list of successes and disappointments.
Test the flywheel against the three circles of your Hedgehog Concept. A Hedgehog Concept is a simple, crystalline concept that flows from deeply understanding the intersection of the following three circles: (1) what you’re deeply passionate about, (2) what you can be the best in the world at, and (3) what drives your economic or resource engine.
Does the flywheel fit with what you’re deeply passionate about—especially the guiding core purpose and enduring core values of the enterprise? Does the flywheel build upon what you can be the best in the world at? Does the flywheel help fuel your economic or resource engine?
Organizations without the components of a flywheel already in place—such as early-stage entrepreneurial companies—can sometimes jump-start the process by importing insights from flywheels that others have built.
flywheel need not be entirely unique. Two successful organizations can have similar flywheels. What matters most is how well you understand your flywheel and how well you execute on each component over a long series of iterations.
What matters most is how well you understand your flywheel and how well you execute on each component over a long series of iterations.
the pioneering innovators in a new business arena almost never (less than 10 percent of the time) become the big winners in the end.
Myth of first mover advantage...staying alive to test the markets while building a flywheel for that market and your business...much uncertainty.
the big winners in corporate history consistently surpassed a threshold level of innovation required to compete in their industries.
their ability to turn initial success into a sustained flywheel, even if they started out behind the pioneers.
Flywheel
Some flywheels need a push at each step. For example, teacher don’t just form collaborative improvement teams. But if you incentivize them and provide the resources, passionate teachers just might. Then, they can’t help but come up with ways to assess students early and often and increase the success of their students with regular feedback.
Leaders who create pockets of greatness at the unit level of their organization—leaders
They figure out how to harness the flywheel effect within their unit of responsibility.
the question stands, How does your flywheel turn?
The flywheel, when properly conceived and executed, creates both continuity and change. On the one hand, you need to stay with a flywheel long enough to get its full compounding effect. On the other hand, to keep the flywheel spinning, you need to continually renew, and improve each and every component.
to renew the flywheel—changes
Renewal focused on bringing the flywheel back in line with the values of the organization, creating the best medical care to make sure the patient is put first and taken care of fully
They renewed every component of the flywheel, but they didn’t dismantle it
There are two possible explanations for a stalled or stuck flywheel.
#1: The underlying flywheel is just fine, but you’re failing to innovate and execute brilliantly on every single component;
#2: The underlying flywheel no longer fits reality and must be changed in...
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These changes might happen by a process of invention, as you discover or create fundamentally new activities or businesses.
they might happen by a process wherein you confront the brutal facts and practice productive paranoia about existential threats to your flywheel.
Rarely does a great flywheel stall because it’s run out of potential or is fundamentally broken. More often, momentum stalls due to either poor execution and/or failure to renew and extend within a fundamentally sound flywheel architecture.
Great by Choice.
