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How Does Your Flywheel Turn?

Written by KV. Posted in Blog

Any student of business has likely heard of the Flywheel and the Doom Loop concept by Jim Collins (Good to Great, 2001, HarperColins), but few students of today have actually seen a true flywheel. I'm not talking about the little flywheel that is in your car or watch. I'm talking about the flywheels that powered the great factories and mills of our country's Industrial Revolution.

I visited an old textile mill in North Andover, Mass. recently. A local restaurant had set-up shop among the restored inner-workings of the mill. The largest part of the restored mechanics was the flywheel. It was clear that back 'in the day' when this thing turned, lots of things happened by design. And when it didn't, nothing happened. Getting the flywheel to turn and gain momentum while engaging many other gears and mechanisms is a fundamental point of Collins' flywheel concept. What impressed me enough to include this pic (and ultimately write about it here), was realizing the wheel's enormous power potential. Seeing its weight and how many things were connected to it made it clear that these things drove everything. Getting that wheel to turn, and keeping it turning, took enormous effort. And once it got turning, it required sustained effort to keep the momentum along with a healthy respect for the power it gathered with every turn. After all, these solid iron power wheels had the potential to spin out of control, sending too much power down the line at once and causing lots of problems - or worse, actually exploding from their own force*. Nobody wanted to be anywhere near a flywheel out of control. Therefore, the ability to manage  the force of these enormous wheels day after day meant success or failure for mill production. And just about every family of the day depended on their work at the mills.

So there it was: the flywheel. Requiring tremendous effort to get it turning and discipline to keep the momentum at a level so as not to spin out of control. Both are needed to avoid what Collins refers to as the Doom Loop: a slow but certain trajectory to the bottom. One might think the Doom Loop is a flywheel that isn't turning. But it's worse then that. Collins illustrates the Doom Loop as the flywheel in reverse. It's not just low or no production, it's the expenditure of precious resources getting the wheel to turn, then stopping it, then starting it again, then stopping, etc. The effect of re-directing, second-guessing, indecision, lack of discipline, lack of vision, etc. If the wheel never gains critical momentum, it means certain doom for the organization. Lots of activity, lots of resources expended, not a lot of results. I had always grasped Collins' reference to the Flywheel and Doom Loop, but this gave me new perspective. How productive, safe and powerful these mechanisms were when knowledge and discipline were evenly and methodically applied by the people working in the mills. And how reckless, dangerous and life-altering they could become in the absence of this discipline. Of course my mind went to strategic planning and how a solid strategic plan, thoughtfully crafted and methodically executed and monitored can change the experience for everyone involved.

I rarely encounter a business that isn't very busy making their proverbial flywheel turn. That's rarely the problem. The true challenge is being 100% certain that the wheel is indeed turning the right direction and at an even keel that empowers teams, sustains production, and maintains structural integrity.

Look around. Examine where and how the energy is being directed and applied in your organization and ask yourself: How is the flywheel turning?

 

* Environmental Control & Safety Management, Vol 11, 1906, Pennsylvania State University.

 

 

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Dancing in Succession

Written by KV. Posted in Blog

I recently presented to a groups of business owners about practice succession planning. Most business owners who are nearing or are already engaged in this phase of business planning are looking for a process - almost like a recipe to follow. That's normal. Smart people know there is a lot to learn from peers about what has worked, or not worked, before starting anything that has the potential to cost lots of time and money. However, as much as there are fundamental initiatives found within almost all plans (i.e. efficiencies, profitability, customer relations) when we look at how each business much approach these initiatives the similarities end. Just as fingerprints are comprised of the same elements, yet are unique and distinct, so is each plan from business to business. When it comes to Succession Planning, this is especially true. As my working relationships with clients mature, an increasing number of them are identifying Succession Planning as a critical success factor in their business strategy plans. As we determine how to impact this initiative, they are discovering the very unique and individual nature of their situations. And rather than panic or procrastinate from thinking that what they envision just does;t fit any pre-cut process, they are embracing the fact that they can make their transition be whatever works best for them and the people they care about. However, to do this demands time and attention of a different kind and may include addressing things that are difficult to address, like not knowing how one will spend new-found time, or realizing that difficult conversations have to take place in order to move ahead.

More than any other business strategy, the succession of leadership and ownership of a business is about human relationships and how those relationships are initiated, nurtured, and maintained. Selecting a good candidate at the start is certainly part of the challenge, but what comes after is

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If It Sounds Too Good...

Written by KV. Posted in Blog

I recently read an article about a local business that grew 1400 percent since its founding 5 years ago. I read the article with great interest. It's not usual to achieve such growth - especially in the first five years. Then I got to the part where one of the partners shared "and we never had a written business plan". I lamented. Not because I was disappointed to learn that a business could be successful without a written plan, but because of all the aspiring business owners and entrepreneurs out there who would read that same article and translate that to mean that planning doesn't matter. I imagined their glee: "I knew it! I don't need a plan! All I really need is to just deal with problems and opportunities as they happen...LIVE! Nimble!" Oh no. Reader, beware. The article was not about how successful they had become without having a plan, quite the contrary.

As it happens, if the reader were to have read the article in its entirety, they would have learned that this company created its first product 10 years ago. There was at least 5 years of "thinking about" the business (dare I say planning for it?) before it was formally structured and started. Even if that planning was done informally and was undocumented, there was certainly strategy in considering product development, research, packaging, production, distribution, target markets and more. The reader would also learn that the owners are a husband, wife and brother-in-law team. It helps when you can form strategy, follow-up on execution and determine next steps when you're in close regular contact with your business partners who also serve as the only full time employees.

I don't mean to be the editorial equivalent of a photo bomb, but the reporter chose to frame this story as a start-up company that grew 1400 percent in its first 5 years of business without planning. This level of rapid growth is comparable to winning the lottery: it isn't impossible, but it sure wouldn't be

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The "Right" Approach to Growth

Written by KV. Posted in Blog

I attended a "Sharpen the Saw" day for Executive MBAs recently. The agenda included speakers from various business sectors. One such speaker was a business consultant who operates a firm that helps organizations hone resources to serve the top 20% of their customer base to expand revenue and increase efficiency. You know the premise from Pareto: 20% of a business's clients yield 80% of its revenues - and the bottom 80% require more than an astounding 90% of its resources. The point being that a business should focus on delivering services and experiences that strengthen the business relationship with the top 20% of customers. As for the other 80% - well, business ought to seriously scrutinize any resources put towards them. Instead, they should discover other low-cost methods to satisfy these customers. Sounds like a no-brainer approach, right? The stats that the speaker presented were certainly compelling and I noticed many nodding heads in approval. But at the end of the speaker line-up for the day, we heard from a woman business-owner named Kitty Van Bortel. Van Bortel is a Rochester, New York native. Her father owned a dealership so she grew-up 'in the business', but in no way was anything given to her. She has an admirable history of being one of the first women to own and operate a car dealership in upstate New York...possibly the entire state. She had to lobby for years to convince Subaru to grant her a dealership that today is the company's top selling dealership in the nation. Over the years, she added Ford to her automotive group and that dealership is considered one of the most successful in a multi-state area. She recently added Chevy to the line-up. Van Bortel in nothing short of a true standout in the automotive industry and she has industry acclaim to prove it (www.edmunds.com/car-buying/from-front-yard-lot-to-dealership-success.html). So, naturally, as a featured speaker at our event, she was highlighting the approaches she felt were essential to her business growth and continued success.

Incredibly, her top "non-negotiables" were REPUTATION and ACCESSIBILITY...and she practiced what she preached. Every single person who encountersVan Bortel's dealerships and employees (of which there are over 250) receives the same level of customer service. And every single person who asks to speak to Kitty gets her personal cell phone number. It's as simple as that - whether they buy

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Fierceness Alone

Written by Krista. Posted in Blog

Nothing is better than a gift of inspiration. I received such a gift this past holiday season from my dad who introduced me to a two thousand year-old woman named Boudica. We were playing chess and musing about brave leaders who dared to dream BIG. For instance, ancient warriors who dared to believe they could stop the rule of the Roman Empire to preserve their culture and freedom. You can't help but admire guys who charge into battle with no idea of the force they were up against (ironically, not unlike me against my dad in chess).

Dad: "It wasn't just those guys who were brave warriors. There was Boudica after all."

Me: "Who's Boudica?"

We googled Boudica and found a full-length movie online1. I lost the chess match, but scored a tale of greatness. And within this tale an even greater message: fierceness and influence alone cannot beat sound strategy, solid discipline and, in the case of the Roman military, a "killer" team.

But allow me to give the honorable Boudica her due. This woman is a heroine, without doubt. Nobody of either gender can dispute that she was not only incredibly fierce, she knew how to galvanize over 100,000 people around a common vision at a time when phones didn't exist, when languages varied from tribe to tribe, and most of them were warring with each other for one reason or another. Despite these hurdles, Boudica cultivated and grew this unified army in the space of a year without the Romans being the wiser. And when they struck, they were effective. Don't think for a minute that her fame is simply due to her being a woman leading a military force in the days of antiquity (60 A.D.). While that is certainly extraordinary, what's more extraordinary is that when they finally launched their rebellion, Boudica's Celtic force left several crucial Roman-held cities in utter waste and had Roman leadership on the run contemplating full withdrawal from Britain. Go Boudica!

As I watched, I was all about victory for the Celts - even though history foretold a different ending. Indeed, Boudica's army was ultimately defeated by not much more than a single Roman legion led by Suetonious. In this final battle, roughly 8000 Roman soldiers were being chased down by more than 50,000 (some say over 200,000) of Boudica's angry, Celtic warriors. It must have seemed unimaginable that she could lose with such superiority in numbers, but she or her army hadn't yet experienced the full force of Roman strategic planning and tactical might.

 

 

"To accomplish great things, we must not only act but also dream. Not only plan but also believe."

Anatole France