Jim Collins has a monograph on flywheels called “Turning the Flywheel” that I highly recommend.
Taking a second to define a flywheel, it “is a heavy wheel for opposing and moderating by its inertia any fluctuation of speed in the machinery with which it revolves.”
Jim Collins uses it as a metaphor for business model inertia. Regardless of what sector your in, there is a flywheel. It might be poorly built, off-balance, or even turning the wrong direction, but it’s there. Amazon’s flywheel is a great way to simplify the overall concept:
If you focus on the core flywheel (sellers -> selection -> customer experience -> traffic), you can imagine how Amazon moved from books to the “everything store.” The second system (lower cost structure -> lower price) demonstrates how vertical integration has served their bottom line.
Acknowledging that Amazon has many problems (opportunities), you can see how a thoughtfully built and reinforced flywheel can stabilize or grow a business. Further, the flywheel helps identify the inputs you need to accelerate or add mass.
I find this concept so helpful because I believe sustainability should live close to the business model. The words “business model” tend not to play well for most people. It’s a jargony way to talk about how your organization gets and deploys resources. Most commonly, we’re talking about money. At a fundamental level, this is what I’m talking about:
- Government – tax dollars, sometimes grants
- Nonprofit – grants, donations, sometimes contracts
- For-profit – customers (B2B, B2C, government contracts, etc.)
Even if you’re living at home, you get resources from somewhere and deal with customers:)
Taking a second, what are your inputs for your organization? Outputs? Can you draw a basic flywheel? Where can you add/subtract to make things flow more smoothly? Can you speed up the overall cycle? Are there secondary or tertiary systems that influence the flywheel? Of your programs, realized or potential, are there any fits?
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