What’s Your Flywheel?
Background
The concept of a flywheel applied to business is very simple at the surface level. It looks like the obvious form when drawn out for you. But, It turns out to be very challenging to build one yourself when you begin considering the implications of including or omitting particular steps in the cycle. Building your own flywheel is challenging mental work but the process of doing so is highly instructive.
In addition to a business strategy framework, I wanted to explore it in the context of how I structure and live my life. My goal here is to give you food for thought for how this framework can be applied to any part of your life to build a virtuous cycle of improvement and growth. I hope you enjoy this post and I hope it gets you thinking about your own flywheel and what that means for how you live your life. I really enjoyed exploring this concept with some of the smartest most thoughtful people I know.
The Flywheel Concept
Flywheels as mechanical energy storage devices, have been around for a long time. The concept of a flywheel used as a metaphor in the business context was introduced in the book Good to Great by Jim Collins and further drawn out in his latest monograph (short book) by the name of Turning the Flywheel. This metaphor of this mechanical device is a way to describe the fundamental strategies of successful companies.
Before we look more deeply at the metaphor’s value for explaining business strategy, it’s instructive to remember what an actual flywheel is.
The Flywheel Machine
A flywheel is an energy storage machine that’s used to smooth the delivery of energy to a system that has variable energy input or consumption needs. Flywheels are used in all sorts of places like wind turbines, electrical storage systems, oil field pumps, steam engines, the clutch in your car, and even the good old playground merry go round.
Physically, a flywheel is a wheel with large mass distributed around the exterior, centered on an axis of rotation, which takes a lot of force to get spinning, but once it’s rotating, inertia will keep it spinning without additional input force being applied.
Here’s a picture of what it might look like.
Consider something as simple as a potter’s wheel or the old sewing tables. You press the pedal to get the wheel turning. At first this requires a lot of effort, but as you get the wheel moving faster, it requires less and less effort to keep it rotating at a particular speed and applying additional energy increases the speed of rotation. If you stop pressing the pedal the wheel continues to rotate, but it slowly begins to decelerate. At some point, you have to re-energize the wheel by applying more energy with the pedal to get it back to up to its most productive speed.
Keep this visual of motion in mind when considering how this metaphor applies in business and life.
The Flywheel of Business
Applying this metaphor in the business context, as Jim Collins does, it describes a series of actions a company makes (inputs of energy) that build a virtuous cycle of growth (higher energy in the form of business inertia). The key point in this application of the metaphor is that the flywheel consists of steps that are almost inevitable once you’ve taken the one prior. A simple example Jim Collins uses in the book is Vanguard. The flywheel that Jack Bogle created with Vanguard was so basic, but it was incredibly powerful. It goes like this:
Source: Turning the Flywheel: A Monograph to Accompany Good to Great
This “flywheel” is essentially Vanguard’s corporate strategy distilled in a few seemingly simple statements.
The “inevitability” of the flow of the series of steps becomes obvious if we pick out just the final step. From the starting point of Generate economies of scale we can see how it clearly reinforces step #1: Offer lower-cost mutual funds. This natural flow of strategic logic is the genius of this framing and what makes this metaphor so powerful. If a company can execute the series of steps continually, improving on each one as they go (increasing energy input per step), then the outcome is a virtuous cycle of growth and positive business results.
The other key point here is that when a company takes their foot off the gas, the value created by this cycle will decay, but the inertia will continue to carry it forward for some time. The two major risks to the success of this process are 1) slowing the organizational energy applied to any of the steps, and 2) failing to adapt the structure of the cycle when market conditions have changed. The latter is hard to envision for something like Vanguard, but if you think about a company like Intel, you might imagine technological or competitive shifts that could disrupt their strategies of extracting market leader-level profits for new process nodes.
Now, let’s dive into how this concept applies to your life.
The Flywheel of Your Life
When you understand the logic of the flywheel in the context of business strategy, you can begin to see how this might apply to your personal life. I would guess that whether conscious or not, many people that have found long-term ongoing success in their lives have found a flywheel that they perpetually invest in.
One interesting question about finding your flywheel is where to start. It seems an obvious starting point to think about the most virtuous principles you desire to embody and then plan your flywheel proactively. This feels more ideal than a back-fit to something you’ve already been doing.
In my experience we rarely sit down up front and plan our every move before taking the first step, but you could try it that way. I think that the more likely scenario for building out a flywheel is that you naturally pursue some things in your life that generate happiness and success, and through reflection you use those or an abstraction of those as the basis for your wheel, and build up from there.
Another aspect of making this practice successful is the use of trial and error. In the parlance of today’s agile business practices, you use build-measure-learn loops to test the success of your flywheel and continuously iterate on its form until you have found a sequence of reinforcing actions that truly creates a virtuous cycle of growth and success. This idea is touched on briefly in Jim Collins’s material, but I think the importance of this ongoing retrospection cannot be understated in ensuring the success of this process. If you are not continuously evaluating not just the individual actions in your flywheel, but the causal chain across them, then you are likely missing key information that will help you strengthen the application of this idea to your benefit.
My Flywheel
I went through this exercise recently and found it a very interesting exercise that I’ll share with you here.
My starting point for deriving my flywheel is understanding what my top three priorities in life are:
Curiosity
Connection
Health
To simplify the flywheel, I’ll call these “the Trifecta” (I know, silly name…). I begin and reinforce my flywheel by feeding the Trifecta. To build out the other steps in the flywheel I spent time to reflect on how I live today and the tendencies I have that seem to lead to my successes.
In addition, my hope was to build out a flywheel that applies to all aspects of my life, rather than trying to create one for home, one for work, etc. I believe that my successes in life have come from a set of traits and tendencies and motivations that apply no matter what I’m doing and I wanted my flywheel to reflect that. So here it is:
What you can see is that when drawn out, it’s very simple. I essentially do the following: chase my passions, ensure to make space to do so, work really hard at whatever it is (learning something new, exercise goal, my relationships, etc.), and then ensure I spend time to reflect on my (usually successful) outcomes. I believe it should be that straightforward.