THE FLYWHEEL AND THE DOOM LOOP Chapter 8 in "Good to Great" by Jim Collins
Jim Collins likened the buildup and breakthrough of good to great companies to a flywheel.
"... you keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. you keep pushing in a consistent direction. Three turns . . . four . . . five . . . six . . . the flywheel builds up speed... a hundred. Then, at some point-breakthrough!" (Collins,2001,p165.)
It wasn't a single bigger than life idea or instance that transitioned the good companies to great ones...
... but instead "a quiet, deliberate process of figuring out what needed to be done to create the best future results and then simply taking those steps, one after the other, turn by turn of the flywheel." (Collins,2001,p169)
Good to great companies do not breakthrough due to a luxury of circumstance
The then CEO of Fannie Mae, David Maxwell said, "We communicated with analysts, to educate them on what we were doing and where we were going. At first a lot of people didn't buy into that-you just have to accept that. But once we got through the dark days, we responded by doing better every single year. after a few years, because of out actual results, we became a hot stock and never looked back." (Collins,2001,p172)
As years passed by the good to great companies stuck with their their three circles ( Hedgehog) and made progress with it in mind.
The Doom Loop
Collins states the comparison companies, "would push the flywheel in one direction- and then they would stop, change course, and throw it into yet another direction. After years of lurching back and forth, the comparison companies failed to build sustained momentum and fell instead into what we came to call the doom loop" (Collins,2001,p178)
Reference
Collins, J. (2001). Good to great: Why some companies make the leap and others don't. London: Random house business.
Built up... breakthrough (n.d) Retrieved January 26, 2016, from http://metropraise.blogspot.com/2010/08/good-to-great-book-review.html
Fannie Mae headquarters (n.d) Retrieved January 26 2016, from http://www.loc.gov/pictures/item/2011632166/
Creative Commons. (n.d.). Retrieved from Slate.adobe.com