The Flywheel and the Doom Loop John Shonk
- Slides: 12
The Flywheel and the Doom Loop John Shonk Bob Odgers Donald Ewalt
I’ve Got to Be Unstoppable � http: //www. youtube. com/watch? v=GA 8 z 7 f 7 a 2 Pk
Buildup and Breakthrough �View from the outside �No single defining action �No name for their progress ◦ UCLA Bruins (1948 -63)
Not Just a Luxury of Circumstance �Short-term �Blue Plans constraints
The “Flywheel Effect” �Steps forward consistent with the Hedgehog Concept �Accumulation of visible results �People line up, energized by results �Flywheel builds momentum
The Doom Loop �This ◦ ◦ occurs when: Flywheel is going in one direction Then stopped Change course And continue in another direction
The Doom Loop
What Causes A Doom Loop �Misguided Use of acquisitions: ◦ When core business is treading water ◦ Dive into a big acquisition in to: �Increase growth �Diversify away their troubles �Make CEO look good �Leaders who stop the flywheel: ◦ Current CEO �Gets the flywheel going �Builds momentum �Identifies hedgehog ◦ New CEO takes over �Stops the flywheel �Changes direction �Tries to save company again
Flywheel and Summary �Consistence �Leading �Follow hedge hog concept �Follow discipline people disciplined actions disciplined thought �Takes time, after momentum BOOM.
Flywheel and Summary � FLY WHEEL � Follow pattern of buildup that leads to break through � Attain consistency with clear hedgehog concept � Make acquisition after breakthrough, build momentum � Spend little energy motivating people � DOOM LOOP � Skip buildup and jump to breakthrough � Embrace fads management hoopla � lurching back and forth outside of 3 circles � Make acquisitions before breakthrough, fear of left
Schlotzsky’s 1971 muffuletta stuffed with three meats, cheeses, lettuce, tomato, olives, and dressing on a sourdough bun. • Wanted market share of Subway, Quiznos, and Panera. ( diversified from six sandwiches to 15 and adding pizzas and salads and cafe) • Big building, lounges, like star bucks, computers. • Crazy advertising campaigns promotions • buy back restaurant development rights 28 million. • 1994 -2000, turnkey program, too many stores. •
Schlotzsky’s
