In “Good to Great” Jim Collins discusses the concept of the “flywheel” as a metaphor for a situation in which business success feeds on itself, generating ever more momentum.
Now picture a huge, heavy flywheel. It’s a massive, metal disk mounted horizontally on an axle. It’s about 100 feet in diameter, 10 feet thick, and it weighs about 25 tons. That flywheel is your company. Your job is to get that flywheel to move as fast as possible, because momentum—mass times velocity—is what will generate superior economic results over time.
It’s a powerful metaphor. The additive effects of many very small initiatives work like compound interest - nominally small, but powerful over time.
This notion that small actions, consistently applied over time will lead to greater and greater results depends on alignment, however. The actions have to be aligned in a way that complements the ultimate goal. Too often we see companies where people and processes are not in alignment. Organizations break down into tribes fighting over narrow interests. Finance vs Operations, IT vs Finance, Business Development vs everyone–has anyone not experienced this in an organization larger than, say, 40 people? Or: the business may be running very smoothly, but without any sense of strategic context. Once great companies like Kodak continued executing perfectly, doing the things they used to do even while market moved on and made those actions irrelevant.
The only solution to achieving the necessary leadership. It’s no mistake that Collins starts with leadership. The leader’s role is fundamentally about tending to the vision and working to keep all elements of the organization aligned with it.
You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction. - Alvin Toffler
At Azimuth, we think about the flywheel as it relates to our own business. It’s no mistake that we focus on helping our clients tackle problems related to strategy, finance, technology, and operations. These components are all integrally linked. We’re confident that once we deliver successfully on one pain point - e.g. helping a client manage a turnaround (operations) - that we’ll have an opportunity to tackle related challenges. We know from experience that implementing a Business Intelligence solution (technology) , for example, does more than deliver operational efficiencies that reduce costs and increase revenues. It also starts a new mindset and attitude about the role of data and analytics in the organization. Any company that starts to use data effectively for daily operations will eventually start to think about how this skill can be leveraged to create competitive advantage (strategy).
We’ll use this blog to expand on these ideas, and provide more insight into issues both big and small. Just remember that we see these business components - strategy, finance, operations, and technology - as equal components of an aligned organization.