{"id":112827,"date":"2023-09-08T15:41:00","date_gmt":"2023-09-08T19:41:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=112827"},"modified":"2023-09-15T15:45:31","modified_gmt":"2023-09-15T19:45:31","slug":"jim-collins-flywheel","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/","title":{"rendered":"Jim Collins: The Flywheel Is the Core of Businesses"},"content":{"rendered":"\n<p>What&#8217;s a company&#8217;s &#8220;flywheel,&#8221; according to Jim Collins? Why&#8217;s it important to keep your focus on said flywheel?<\/p>\n\n\n\n<p>According to <em>How the Mighty Fall<\/em> by Jim Collins, flywheel means the small wins that gain momentum for your business. If you take your mind off the flywheel for even just a moment, it could have dire consequences.<\/p>\n\n\n\n<p>Check out why the flywheel is the <a href=\"https:\/\/www.shortform.com\/blog\/foundation-of-a-business\/\">foundation of a business<\/a> strategy.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-successful-company-loses-its-focus\">A Successful Company Loses Its Focus<\/h2>\n\n\n\n<p>Overconfidence harms companies when <strong>leaders take their focus off what&#8217;s called the \u201cflywheel\u201d<\/strong>: Jim Collins&#8217; concept for the momentum keeping the company moving forward. Because the company may seek to expand its success to new ventures unrelated to their core business, it may pay little attention to what drives its success in the first place. When the company finds that success is hard to replicate in other fields, it may turn its attention back to the flywheel, which by then has become shaky from neglect.<\/p>\n\n\n\n<p>(Shortform note: Collins introduces the concept of flywheels in <a href=\"https:\/\/www.shortform.com\/app\/book\/good-to-great\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Good to Great<\/em><\/a>. He explains that <a href=\"https:\/\/www.shortform.com\/app\/book\/good-to-great\/chapter-8\" target=\"_blank\" rel=\"noreferrer noopener\">a company\u2019s spinning flywheel<\/a> results from a \u201cbuildup phase,\u201d wherein the company focuses on sound management practices: having highly driven people, facing facts, sticking to its core philosophy, and using technology tactically. He explains that companies fail when they take shortcuts, barreling into new projects without gaining the necessary momentum in the buildup phase.)<\/p>\n\n\n\n<p>According to Collins, one example of a company that lost its focus is Circuit City, a consumer electronics retailer that enjoyed impressive growth in the 1980s and \u201990s. Collins argues that the company\u2019s decline began when it turned its attention to building up other unrelated businesses, such as used car dealerships. In the process, its electronics superstores stagnated. Circuit City filed for bankruptcy in 2008.<\/p>\n\n\n\n<p>(Shortform note: Some experts say that <a href=\"https:\/\/fourweekmba.com\/what-happened-to-circuit-city\/\" target=\"_blank\" rel=\"noreferrer noopener\">Circuit City had plenty of other problems<\/a> aside from being distracted by unrelated businesses. It couldn\u2019t differentiate itself from its competitors, it opened too many stores that ended up competing against each other, and it mismanaged its inventory. In a bid to keep its share price from plummeting further, it also disposed of valuable assets to buy back its own stock.)<\/p>\n\n\n\n<p>Collins adds, however, that focusing on your flywheel doesn\u2019t mean that your company shouldn\u2019t innovate. Rather, it means building on what you\u2019re good at. For example, if your company is successful at selling baked goods, you shouldn\u2019t suddenly venture into manufacturing car parts. Instead, you might expand into baked goods for dogs, boxed mixes of your muffins, or kitchen equipment like cake pans and mixing bowls.&nbsp;<\/p>\n\n\n\n<p>(Shortform note: Innovating by building on what you\u2019re good at doesn\u2019t automatically lead to success. In <a href=\"https:\/\/www.shortform.com\/app\/book\/ten-types-of-innovation\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Ten Types of Innovation<\/em><\/a>, the authors contend that some innovations fail because many companies don\u2019t know <em>how<\/em> to innovate. The authors thus recommend <a href=\"https:\/\/www.shortform.com\/app\/book\/ten-types-of-innovation#problem-undisciplined-approach-to-innovation\" target=\"_blank\" rel=\"noreferrer noopener\">treating innovation as a formal discipline<\/a> with a standard set of strategies. For example, you can <a href=\"https:\/\/hbr.org\/2015\/06\/you-need-an-innovation-strategy\" target=\"_blank\" rel=\"noreferrer noopener\">start by defining the specific objectives<\/a> of a project and clarifying how it fits into the bigger business strategy.)<\/p>\n\n\n\n<p>The only time you should consider completely pivoting away from your flywheel, says Collins, is when it\u2019s bound to become obsolete in a few years or when it no longer excites you. (Shortform note: If your flywheel looks like it\u2019s destined to become obsolete, you don\u2019t have to completely pivot from it right away. In <a href=\"https:\/\/www.shortform.com\/app\/book\/the-innovator-s-dilemma\" target=\"_blank\" rel=\"noreferrer noopener\"><em>The Innovator\u2019s Dilemma<\/em><\/a>, Clayton M. Christensen recommends <a href=\"https:\/\/www.shortform.com\/app\/book\/the-innovator-s-dilemma#what-you-can-do-to-adopt-disruptive-innovations-successfully\" target=\"_blank\" rel=\"noreferrer noopener\">establishing an autonomous organization<\/a> within the company to explore and develop disruptive innovations. And if you\u2019re no longer excited by your flywheel, you don\u2019t have to abandon it, as Collins suggests\u2014instead, consider <a href=\"https:\/\/www.forbes.com\/sites\/mikekappel\/2017\/02\/22\/is-passion-good-for-business\/\" target=\"_blank\" rel=\"noreferrer noopener\">channeling your passion into something else that can keep you going<\/a>, whether it\u2019s entrepreneurship or helping your employees grow.)&nbsp;&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What&#8217;s a company&#8217;s &#8220;flywheel,&#8221; according to Jim Collins? Why&#8217;s it important to keep your focus on said flywheel? According to How the Mighty Fall by Jim Collins, flywheel means the small wins that gain momentum for your business. If you take your mind off the flywheel for even just a moment, it could have dire consequences. Check out why the flywheel is the foundation of a business strategy.<\/p>\n","protected":false},"author":14,"featured_media":5910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,30],"tags":[1260],"class_list":["post-112827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-work","tag-how-the-mighty-fall","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Jim Collins: The Flywheel Is the Core of Businesses - Shortform Books<\/title>\n<meta name=\"description\" content=\"Jim Collins&#039; flywheel concept shows how important it is to stay focused on a business&#039;s core principles. Discover more about the flywheel.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Jim Collins: The Flywheel Is the Core of Businesses\" \/>\n<meta property=\"og:description\" content=\"Jim Collins&#039; flywheel concept shows how important it is to stay focused on a business&#039;s core principles. Discover more about the flywheel.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\" \/>\n<meta property=\"og:site_name\" content=\"Shortform Books\" \/>\n<meta property=\"article:published_time\" content=\"2023-09-08T19:41:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-15T19:45:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/12\/good-to-great-flywheel-doom.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"917\" \/>\n\t<meta property=\"og:image:height\" content=\"583\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Katie Doll\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Katie Doll\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\"},\"author\":{\"name\":\"Katie Doll\",\"@id\":\"https:\/\/www.shortform.com\/blog\/#\/schema\/person\/c3e1b539e89423b544ede91ab2bff937\"},\"headline\":\"Jim Collins: The Flywheel Is the Core of Businesses\",\"datePublished\":\"2023-09-08T19:41:00+00:00\",\"dateModified\":\"2023-09-15T19:45:31+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\"},\"wordCount\":646,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/12\/good-to-great-flywheel-doom.jpg\",\"keywords\":[\"How the Mighty Fall\"],\"articleSection\":[\"Business\",\"Work\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\",\"url\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/\",\"name\":\"Jim Collins: The Flywheel Is the Core of Businesses - Shortform Books\",\"isPartOf\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.shortform.com\/blog\/jim-collins-flywheel\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/2019\/12\/good-to-great-flywheel-doom.jpg\",\"datePublished\":\"2023-09-08T19:41:00+00:00\",\"dateModified\":\"2023-09-15T19:45:31+00:00\",\"description\":\"Jim Collins' flywheel concept shows how important it is to stay focused on a business's core principles. 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