The Two Flywheel Stages

Different seasons in the life of a company or organization ask different questions and require different leadership. I’ve been thinking a lot recently about two different stages in particular: building a flywheel and riding a flywheel.

It’s the difference between a manual gas pump from the early 20^th century and the automatic gas pump of today. In the first, if you stop putting in the labor, everything stops. Think of it like a hand-crank car window from the ’80s or ’90s. In the second, you can lift the handle and walk away. Gas just keeps flowing.

Jim Collins famously talked about this concept in his monograph, “Turning the Flywheel,” and described the work of the flywheel this way: “Each turn builds upon previous work as you make a series of good decisions, supremely well executed, that compound one upon another.” Good creates good.

This image is so helpful. In my work with CEOs and their companies, I’ve noticed that the flywheel is the momentum and movement between customer, offering, and finances. These are three of the four checkpoints of a viable business, the anchor posts of the flywheel.

When you have customer, offering, and finance momentum, they feed on each other to keep each other going. And the leadership challenge of building a flywheel versus living in a flywheel is massive—not necessarily easier or harder, just different.

So, look at your company or organization and ask the brutally honest question: “Am I in a flywheel?”

Are you hand-cranking all the momentum, or does this thing feel like it’s moving faster than you can keep up with? Your answer will push you to different kinds of work.

If you’re building a flywheel, there’s a goal and a practice to keep in mind.

• The goal is to figure out product/offering fit. What’s the right size sandwich for a burger restaurant? What’s the right price for a hairstylist to charge? What level of communication encourages donors to give to my nonprofit or participants to keep contributing? You will never have momentum until you can figure out the fit between your product and your economics.
• The practice is to just ship it. Innovation is key to momentum. And from Silicon Valley to Seth Godin, the just ship it idea encourages you to stop ideating and try something to get real feedback. This will enable you to pivot quickly, and tinkering with your model is what gets you an eventual flywheel.

This means you’re balancing “planning” work and “doing” work. Constant evaluation, constant pivoting. As you do this, you build momentum and create the beginnings of a flywheel.

On the other hand, you may find yourself leading an organization that is living in the midst of a flywheel. If so, keep asking yourself two questions:

• What gauges should I monitor? What are the small things that, if they fail, will halt the whole operation? At Glad, a manufacturer of trash bags, operators keep a close eye on the belts that drive the massive machines because if even one belt wears and snaps, the whole process will come to a standstill. For a while.
• Can you add other flywheels? Bigger companies often add flywheels to flywheels. A team might become fatigued after running a flywheel for 20 years. Where can new ideas spin off, capture fresh momentum, and take some of the pressure off the existing flywheel without making it obsolete? (This adds its own challenge of keeping two teams at different stages of the flywheel life cycle running.)

Living in a flywheel is exhausting, but it can also be exhilarating. People love to ride a rocket. Momentum is fun. John Maxwell said, “Momentum solves 80% of your problems,” and I tend to agree.

As one tennis legend is supposed to have said, “Momentum is a cruel mistress. You’re either feeding her, or she’s leaving you.”

Flywheels work that way. They require immense effort and intentional focus to build—and just as much effort and focus to maintain. But the type of work changes. Figure out which one you need.