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Good To Great Chapter Eight The Fly Wheel and the Doom Loop

Good To Great Chapter Eight The Fly Wheel and the Doom Loop. Mamie Dupre Bess Luker Alicia Estrada Ryan Dupriest Taylor Watts. BREAKTHROUGH!. Each turn of the flywheel builds upon work done earlier “What was the one big push that caused this thing to go so fast?”

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Good To Great Chapter Eight The Fly Wheel and the Doom Loop

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  1. Good To Great Chapter EightThe Fly Wheel and the Doom Loop Mamie Dupre Bess Luker Alicia Estrada Ryan Dupriest Taylor Watts

  2. BREAKTHROUGH! • Each turn of the flywheel builds upon work done earlier • “What was the one big push that caused this thing to go so fast?” • An accumulation of effort

  3. Buildup and Breakthrough • There was no one single defining action • Good-to-great comes about by a cumulative process • Media does not cover a company until after transformation • Circuit City • First national article on August 27, 1984 • After transition-97 articles • What’s so Important? • Outside vs. Inside • There was no miracle moment!

  4. An Example • UCLA Bruins Basketball • 1960s and early 1970s • Won ten NCAA Championships in twelve years • A sixty-one-game winning streak, under Coach John Wooden • Before Wooden’s first NCAA Championship • Coached 15 years • From 1948-1963, 1964

  5. The Breakthrough Stage • Circuit City • Nine years • Nucor • Ten years • Gillette • Five years • Fannie Mae • Three years • Pitney Bowes • Two years

  6. Good-to-Great Transformation • Same basic pattern • Accumulating momentum • Turn by turn of the fly wheel • Until buildup transformed into breakthrough

  7. Not Just a Luxury of Circumstance • Following the buildup-breakthrough flywheel model is not just a luxury of circumstance • The key • To harness the flywheel to manage short-term pressures

  8. The “Flywheel Effect” • The simple truth: • Tremendous power exists in the fact of continued improvement and the delivery of results • ADD THE CHART TO THIS SLIDE…IF IT FITS!

  9. The Question • “The one about commitment, alignment, and how they managed change” • Want to be consistent across the interviews. • We’ve got to understand how they overcome resistance to change and got people lined up. • They expected “creating alignment” would be one of the top challenges faced by executives • They did not find the question of alignment to be a key challenge

  10. The Flywheel • Good-to-great companies tended not to publicly proclaim big goals at the outset • They began to spin the flywheel • Understanding action • Step after step • Turn after turn • After the flywheel built up momentum • “There’s no reason we can’t accomplish X”

  11. Nucor • Began turning the flywheel in 1965 • Discovered they had a knack for making steel better and cheaper • Built more mini-mills • Gained customers • Took over two decades, but Nucor generated greater profits than any other steel company on the Fortune 1000 list

  12. Cause and Effect • When you let the flywheel do the talking, you don’t need to fervently communicate your goals • As people decide among themselves to turn the fact of potential into the fact of results, the goals almost sets itself

  13. The Doom Loop • The comparison companies start in one direction and then go in a complete direction • After back and forth the comparison companies would fail to build sustained momentum and fell into the doom loop

  14. Doom Loop

  15. Misguided use of Acquisitions • Good-to-Great Companies: used acquisition as an accelerator of the flywheel momentum not as the creator • Comparison Companies: tried to jump right to breakthrough with acquisition • Never learned while you can buy your way to growth you cannot buy your way to greatness

  16. Leaders who stop the flywheel • New leaders would stop the motion the company was already headed in • Harris Corporation, applied many of the greatness concepts in the early 1960’s • 1978 Joseph Boyd became CEO • Boyd moved head quarters to Melbourne, Florida from Cleveland

  17. Flywheel as a Wraparound Idea • It is only through consistency over time, through multiple generations • Every factor work together to create the pattern • Each component produces and push on the flywheel • Starts with level 5 leaders • Example right people right seat

  18. Signs That You’re on the Flywheel • Follow a pattern of buildup leading to breakthrough • Confront the brutal facts • Attain consistency with a clear Hedgehog Concept • Follow the pattern of disciplined people • Harness appropriate technologies to your Hedgehog Concepts • Make major acquisitions after breakthrough • Spend little energy trying to motivate or align people • Maintain consistency over time

  19. Signs That You’re in the Doom Loop • Skip build up and jump right to breakthrough • Embrace fads and engage in management hoopla • Demonstrate chronic inconsistency • Jump right to action • Run about like Chicken Little in reaction to technology • Make major acquisitions before breakthrough • Spend a lot of energy trying to align and motivated people • Demostrate inconsistency over time

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