Good To Great - The Flywheel and The Doom Loop

The following is extracted from Good To Great by Jim Collins:

Key Points

-           Good-to-great transformations often look like dramatic, revolutionary events to those observing from the outside, but they feel like organic, cumulative processes to people on the inside.  The confusion of end outcomes (dramatic results) with process (organic and cumulative) skews our perception of what really works over the long haul.

-           No matter how dramatic the end result, the good-to-great transformation never happened in one fell swoop.  There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, and no miracle moment.

-           Sustainable transformations follow a predictable pattern of buildup and breakthrough.  Like pushing on a giant, heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough.

-           The comparison companies followed a different pattern, the doom loop. Rather than accumulating momentum – turn by turn of the flywheel – they tried to skip buildup and jump immediately to breakthrough.  Then with disappointing results, they'd lurch back and forth, failing to maintain a consistent direction.

-           The comparison companies frequently tried to create a breakthrough with large, misguided acquisitions.  The good-to-great companies, in contrast, principally used large acquisitions after breakthrough, to accelerate momentum in an already fast-spinning flywheel.

Unexpected Results

 -           Those inside the good-to-great companies were often unaware of the magnitude of their transformation at the time; only later, in retrospect, did it become clear.  They had no name, tag line, launch event, or program to signify what they were doing at the time.

-           The good-to-great leaders spent essentially no energy trying to "create alignment," "motivate the troops." Or "manage change."  Under the right conditions, the problems of commitment, alignment, motivation, and change largely take care of themselves.  Alignment principally follows from results and momentum, not the other way around.

-           The short-term pressures of Wall Street were not inconsistent with following this model. The flywheel effect is not in conflict with those pressures.  Indeed, it is the key to managing them.

-           Spending time and energy trying to "motivate" people is a waste of effort.  The real question is not, "How do we motivate our people?"  If you have the right people, they will be self-motivated.  The key is to no de-motivate them.  One of the primary ways to de-motivate people is to ignore the brutal facts of reality.