The Flywheel Thing

August 21, 2020

About a year ago, a marketing person asked me, “Why don’t you talk about the Amazon flywheel?” I replied, “Flywheel. What flywheel?” Sure, I knew about the Bezos buzzword, but that does not mean I have to use it when I write about the world’s largest online bookstore. I prefer jazzier words and phrases; for example, cat’s pajamas, wizards, and high school science club manager, etc.

Question Everything or the Strange Loop Principle” seems to come down on my side of word choice. The essay asserts:

First, let’s see how Collins himself describes what he calls the Flywheel Concept. For that, I’m going to borrow from Collins’ own Turning the Flywheel: a Monograph to Accompany Good to Great. But first, we have to discuss Collins’ word choice and the mechanics of an actual flywheel. He picks “Flywheel” for a reason: he believes flywheels accurately describe the sort of dynamics he identifies in some very successful companies that go from being average – “good” – to being leaders – “great” –.

Now the flywheel in business:

So whatever Collins wants us to understand about great businesses, he thinks a flywheel is a good shortcut to get there.

The there is growth, maybe exponential growth. One problem:

Therefore, flywheels are great at describing something that holds a lot of momentum, but not something that behaves exponentially, or that self-reinforces itself.

Now Amazon:

I think Amazon is a great example of something I can’t quite point at but that seems to reinforce itself (I have no evidence that it’s exponential in any way. Just that it seems to go on and on forever without the need for more energy). As it sells more, it’s able to sell cheaper, which leads it to sell more, which leads it to be able to sell cheaper, and on and on. Businesses that find such self-reinforcing “mechanics” have something strong going for them.

The bottom line:

Here’s this guy who’s arguably the new Peter Drucker, revered by entrepreneurs, world leaders and executives alike, not only basing a huge part of his knowledge production on a shaky concept that’s named and explained with a shaky mix of words and examples applying it all in a very shaky way to his own life.

Yep, imagine that. Management thinking which is shaky. Nope, no flywheels for me.

Stephen E Arnold, August 20, 2020

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