Value Creation

Flywheel and V-REEL

I recently read Jim Collins newest book, Turning the Flywheel, in which he drills down on the Flywheel concept introduced in Good to Great. For a quick refresher, the flywheel for an organization is a virtuous cycle of actions, each building on the previous, that, when executed consistently and with excellence, build self-sustaining momentum for the organization. To illustrate, I’ve included the flywheel for my company below.

ClearVision Consulting Flywheel

You can see how each action propels the organization into the next. As intensity and depth of effort increase on every rotation, velocity also increases, accelerating the growth of the organization and making it healthier with each turn. As the flywheel turns faster and faster, the weight of the flywheel, which early on seemed to work against you as you struggled to execute each action, now begins to work for you and the flywheel becomes almost unstoppable.

I was introduced to the flywheel several years ago when I first read Good to Great. Like a lot of Jim Collins’ material, it’s an enduring bit of business genius. But when I revisited the topic this time through the new book, I couldn’t help but think of how well it paired with the V-REEL framework from David Flint’s excellent 2018 Book Think Beyond Value.

In Think Beyond Value, Flint introduces the V-REEL framework – a tool that helps business owners and managers think through their organization’s value creation activities using fives lenses –

  • How do you create value?
  • How rare is that value?
  • What factors erode that value?
  • What factors enable that value?
  • How long can the value be sustained?

It didn’t take long to make the connection between the two tools. The flywheel is a virtuous cycle of value creation activities (Flint’s first question). Those activities only remain valuable as they differentiate the organization and make their product or service unique or desirable in the marketplace (Flint’s second question). Stewards of the organization must constantly be vigilant for those factors, both internal and external, that impede or diminish the effectiveness of the flywheel activities (Flint’s third question). At the very same time, they need to infuse those flywheel activities with resources that make them more effective and efficient (Flint’s fourth question). And finally, stewards of the organization must ensure that the flywheel activities continue to build sustained competitive advantage for the organization – that is, they still have meaning in the current competitive environment (Flint’s fifth question).

There are only a handful of business activities that approach “holy grail” status and value creation is one of them. I hope introducing these two tools helps you step back and take a fresh look at your value creation chain. A 500-word post doesn’t come close to doing justice to either of these two books, so I hope I’ve sufficiently whetted your appetite to hit your favorite bookstore (brick and mortar or online) and pick them up. Here they are on Amazon:

Turning the Flywheel

Think Beyond Value