Turning the Flywheel: A Monograph to Accompany Good to Great

The Hedgehog Concept is a simple, crystalline concept that flows from deep understanding about the intersection of the following three circles: (1) what you’re deeply passionate about, (2) what you can be the best in the world at, and (3) what drives your economic or resource engine.

The Vanguard case exemplifies a key aspect of how the best flywheels work. If you nail one component, you’re propelled into the next component, and the next, and the next, and the next—almost like a chain reaction. In thinking about your own flywheel, it’s absolutely vital that it not be conceived as merely a list of static objectives that you’ve s

For a truly great company, the Big Thing is never any specific line of business or product or idea or invention. The Big Thing is your underlying flywheel architecture, properly conceived. If you get your flywheel right, it can guide and drive momentum (with renewal and extensions) for at least a decade, and likely much longer. Amazon, Vanguard, an

THE FLYWHEEL No matter how dramatic the end result, building a great enterprise never happens in one fell swoop. There’s no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum unti

GENIUS OF THE AND Builders of greatness reject the “Tyranny of the OR” and embrace the “Genius of the AND.” They embrace both extremes across a number of dimensions at the same time. For example, creativity AND discipline, freedom AND responsibility, confront the brutal facts AND never lose faith, empirical validation AND decisive action, bounded r

great enterprise transcends dependence on any single extraordinary leader; if your organization cannot be great without you, then it is not yet a truly great organization.

Once you fully grasp how to create flywheel momentum in your particular circumstance (which is the topic of this monograph) and apply that understanding with creativity and discipline, you get the power of strategic compounding. Each turn builds upon previous work as you make a series of good decisions, supremely well executed, that compound one up

STEPS TO CAPTURING YOUR FLYWHEEL So, then, how might you go about capturing your own flywheel? At our management lab, we’ve developed a basic process, refined during Socratic-dialogue sessions with a wide range of organizations. Here are the essential steps: Create a list of significant replicable successes your enterprise has achieved. This should

Notice how each component in the Vanguard flywheel isn’t merely a “next action step on a list” but almost an inevitable consequence of the step that came before. If you offer lower-cost mutual funds, you almost can’t help but deliver superior long-term returns to investors (relative to higher-cost funds that invest in the same assets). And if you d