Group 4:
Katy Neely
Andrew McDonald
Matt Tevis
Shelly Brown
Hunter Pond
Buildup and Breakthrough
 Circuit City
 “The Nucor Threat”
 “There was no miracle
moment”
Circuit City To Liquidate In The
Latest Massive Business Failure
 “Even the Cars couldn't save Circuit City. The electronics retail giant is shifting
from Chapter 11 to Chapter 7 bankruptcy, and as early as tomorrow will begin
liquidating all 567 of its stores' merchandise and laying off over 30,000
employees.”
 “What are the lessons for other businesspeople from Circuit City's demise?
Now is a good time for me to point you toward an interview I did with Paul
Carroll, author of Billion-Dollar Lessons, a guide to some of the most
devastating business failures of all time and why they happened.”
 “The most relevant lesson seems to be about a failure to change, and a harmful
tendency for companies to adopt a "stay the course" mindset. Caroll cites
Kodak as an example. He says Kodak failed to adequately anticipate the
changes that digital photo technology would bring to its market space. One
could say the same thing about Circuit City and the effect that online retail has
had on the market for consumer technology. Competitors like Best Buy have
found ways to be successful even in a world where online retail is growing.”
U.S News and World Report January 16, 2009 By, Matthew Bandyk
“No Miracle Moment”
Representative Quotes From Interviews
 Circuit City: “The transition to focus on the superstore
didn’t happen over night. We first considered the concept
in 1974, but we didn’t fully convert to Circuit City
superstores until about ten years later, after we’d refined
the concept and built enough momentum to build our
whole future on it.” (p.170)
 Kimberly-Clark: “I don’t think it was done as bluntly as it
sounds. These things don’t happen overnight. They grow.
The ideas grow and mushroom and come into being.”
(p.170)
 Walgreens: “There was no seminal meeting or epiphany
moment, no one big bright light that came on like a light
bulb. It was sort of an evolution thing.” (p.171)
Not Just a Luxury of Circumstances
 Long term vs. Short term
 Fannie Mae
 Abbott
 Blue Plans
The “Flywheel Effect”
 Commitment and
Alignment
 Kroger
 “Spin the flywheel”
 Magic of Momentum
The Doom Loop
 Warner-Lambert
BYU's Flywheel Is Turning
 Collins asked, "Why do most over-hyped change programs ultimately fail? Because
they lack accountability, they fail to achieve credibility, and they have no
authenticity. It's the opposite of the Flywheel Effect; it's the Doom Loop.“
 “Doom Loop organizations launch programs with huge fanfare, but start down one
path only to change direction. After years of lurching back and forth, these
companies discover that they've failed to build any sustained momentum.“
 The Flywheel Effect? Collins says “to imagine a massive metal disk mounted
horizontally on an axel about 100 feet in diameter, 10 feet thick and 25 tons. That is
your team/company and the job is to move the flywheel from a dead stop to as fast
as possible.”
 "To get it moving, you make a tremendous effort. You push with all your might, and
finally, you get the flywheel to inch forward. After two or three days of sustained
effort, you get the flywheel to complete one entire turn. You keep pushing, and the
flywheel begins to move a bit faster. It takes a lot of work, but at last the flywheel
makes a second rotation. You keep pushing steadily. It makes three turns, four
turns, five, six. With each turn, it moves faster, and then -- at some point, you can't
say exactly when -- you break through. The momentum of the heavy wheel kicks in
your favor. It spins faster and faster, with its own weight propelling it. You aren't
pushing any harder, but the flywheel is accelerating, its momentum building, its
speed increasing.“
Deseret News (Salt Lake City) , Nov 12, 2006 by Dick Harmon Deseret Morning News
Leaders Who Stop The Flywheel
 Harris Corporation
 Joseph Boyd
 Computerworld magazine: “Boyd targeted the
automated office as a key…unfortunately for Harris,
the company had everything but an office product.
The attempt to design and market a word processing
system met with dismal failure…out of tune with the
market, and had to be scrapped before introduction.”
(p. 182)
How To Tell If You’re On The
Flywheel Or In The Doom Loop
 Consistency
 Coherence
Signs that you’re on the
Flywheel (Good-to-Great
Companies)
Signs that you’re in the
Doom Loop (Comparison
Companies)
Follow a pattern of buildup leading
to breakthrough.
Skip buildup and jump right to
breakthrough.
Reach breakthrough by an
accumulation of steps, one after the
other, turn by turn of the flywheel;
feels like an organic evolutionary
process.
Implement big programs, radical
change efforts, dramatic revolutions;
chronic restructuring- always
looking for a miracle moment or new
savior.
Confront the brutal facts to see
clearly what steps must be taken to
build momentum.
Embrace fads and engage in
management hoopla, rather that
confront the brutal facts.
Attain consistency with a clear
Hedgehog Concept, resolutely
staying with the 3 circles.
Demonstrate chronic inconsistencylurching back and forth and staying
far outside the 3 circles.
Harness appropriate technologies to
your Hedgehog Concept, to
accelerate momentum.
Run about like Chicken Little in
reaction to technology change,
fearful of being left behind.
Let results do most of the talking.
Sell the future, to compensate for
lack of results.