Jim Collins is the poet of management thinking. In classic books like Built to Last and Good to Great, he has rendered big ideas as memorable phrases and metaphors--"BHAGs" and "clock-building" and "hedgehogs"--all in the interest of explaining what makes great companies tick. Among his most evocative images is the flywheel: a circular sequence of actions or conditions, each emerging naturally from the one before it, that companies turn slowly at first but then faster and faster until its momentum carries them to greatness.
Eighteen years after the flywheel appeared in Good to Great, Collins is back with a new monograph,Turning the Flywheel (HarperBusiness). Collins spoke with Inc. about misapprehensions of the flywheel, his new research interests, and his affection for entrepreneurs.
Inc.: Why revisit the flywheel specifically?
Collins: When you articulate principles, even if you are the first to uncover them, your understanding is not static. My understanding of that principle, in particular, got a lot deeper. It started at a meeting with Amazon in 2001 not long after the publication of Good to Great. I watched as the team took the flywheel principle and made it their own. That was very interesting to me to see how that happened: the kind of specification of one company's flywheel. Look at what somebody who has learned this principle is doing! How neat!
Every time a group of 20 or so CEOs would come to [Collins's management laboratory in] Boulder [Colorado], I would challenge them. Show me your flywheel. How does it actually work? They would respond very well. And people started saying, have you ever written this somewhere? You have to put this out there so people can get the benefit of the challenge you keep issuing.
Were companies getting it wrong on their own?
I began to notice a lot of people tossing around the word flywheel. I would look at what they were doing, and those weren't really flywheels. A flywheel is not a list of aspirational steps drawn as a circle. Or a list of action steps drawn as a circle. The essence of a flywheel is that it captures an underlying logic that has causal momentum within it. If you do step A, you are almost going to be thrown to step B. You almost can't help it. And if you do B very well, you are going to get thrown to C. And if you do C really well, it is going to throw you to D. And all around to the top of the flywheel again.
What do people struggle with most when building their flywheels?
There is a very hard question that is implicit: What is at the top of the flywheel? Even though it is a repeating loop there is something important about what you put at the top as the ignition point of the whole thing. Flywheels start in different ways. So you take the Amazon flywheel. It starts with low prices on more stuff. It is a very economies-of-scale-driven flywheel. But then you look at Intel. That is an innovation-driven flywheel. It starts with the next generation of chips. I wrote about Ware Elementary School [on a military base in Kansas], which is, hands down, my favorite. That starts with a certain kind of person they need to get on board: passionate teachers.
Is it easier to figure out what's on top if you have the founder in the room?
A founder who has done a really great job probably does instinctively have the whole flywheel in mind without necessarily knowing it. They might not be able to lay it all out at the beginning. But when I think about the founders I have known, most have a pretty strong view of what is at the top. And if they are building great companies, they are probably right.
I guess, though, that I always think of Good to Great in terms of large public companies because those are its subjects.
Because that's where the data is. I'm not a business writer. Good to Great was not about business. Built to Last was not about business. Great by Choice was not about business. Why do we study business? Because business has data. The reason we studied publicly traded companies is that's where I could get 6,000 years of combined data that would allow me to do very, very rigorous comparisons and analyses and correlations and statistical stuff.
So if those books aren't about business, then what are they about?
That's an interesting question. Because I never expected half of our readership to come from outside of business. They are about the principles that distinguish great organizations from mediocre ones.
Is that why the principles hold true for smaller companies?
In my mind, Built to Last was an entrepreneur's book, first and foremost. Because what I realized is that all enduring great companies were once startups. So you need to go back to when Bill Boeing was selling furniture to raise enough cash to build an airplane. You need to go back to when Walt Disney was doing his very first film. You need to go back to Sony and their failed rice cooker. That they ended up as big companies is a result of what they were doing when they were small companies.
So how does a startup build a flywheel, since flywheels are based on previous successes and failures?
Here's an example from when I was teaching at Stanford. I wrote a case about a company called Giro Sport Design. At the time, the founder, Jim Gentes, was making bicycle helmets in his garage. His bedroom was finished goods inventory. But he was already thinking flywheel. He thought, I can learn from an established flywheel. I can learn from what someone like Nike has done. In that case, his insight was that in sports there is a mechanism of social influence. If the elite people wear it, then the serious amateurs will adopt it, and then the weekend warriors, and then the rest of us. He copied that. So I think as a startup founder it is fine to look at what has worked for others, although your flywheel as a whole will be somewhat different.
What are your new research topics?
The first is K-12 education. I am looking at what, in my mind, is the ultimate entrepreneurial act, which is to be a school principal in a really difficult setting with very, very limited resources and nobody supporting you. And you still figure out how to produce great results for the kids. The second is the question of self-renewal, when your life as you knew it before comes to a conclusion. Let's say you've sold your company. What separates those who self-renew so well over the long course of a life from those who don't? I now have figured out how to come at this question methodologically.
That second one sounds kind of like a personal flywheel. Is there a Jim Collins flywheel?
There is a little bit. The start of my flywheel has always been curiosity that has to be fed. So it starts with a question. If it's a really great question, I can't help but want to do research on it. And if I do the research right, then I can't help but have insights into concepts that come from that research. And if I have those concepts and I really believe they are validated and powerful, then I can't help but want to write about them and share them and teach them. And if I share the ideas and teach and write them, then I can't help but have impact with the work, and it will have reach. And if I have impact with the work and it has reach, then that is going to generate funding. And I can't help but want to channel those resources into feeding the next questions, which never stop. Which then drives the flywheel around again.