Advantage Flywheels

The concepts of complex system dynamics, represented by system dynamics models with stocks, flows, feedback loops and influence diagrams, have always held the promise of shedding light on business systems and models (we have used these tools ourselves to model the innovation process within large corporations). The problem has always been that they are, well, complex. They are hard to develop, much less understand and adopt to practical advantage. Along comes the ‘flywheel’, discussed in this article and in Jim Collins new book ‘Turning the Flywheel’.

In this brief introduction, the author gives examples of both archetypical flywheels and specific company flywheels. As he states

archetypes can be combined to create more comprehensive flywheels modeling the driving “engines” of each company’s moat … the most successful moats have multiple flywheels that feed off of each other’s momentum … the analogy of a feedback loop helps (one) to think of an advantage as a moving, changing system. A system that needs catalysts to get started, and will gain momentum at first but still be slowed by friction over time.

It would have been better if the author had referenced complex systems dynamics tools, Jim Collins flywheel concepts and all the work that has been done on business models (which can be well represented by flywheel diagrams).

What we are witnessing is the transition of a complex methodology (system dynamics modeling used primarily by academics and other researchers) into the business world. This transition should be applauded. The concept of flywheels will be a useful mechanism to think about complex business dynamics. This includes business models for which flywheels will be a much better tool than static business-model canvases.

Original Article »

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