Personal Flywheel

The benefits of compounding effects are not limited to investing. Compounding can be found in relationships, careers, and knowledge. As Naval Ravikant says, “All the benefits in life come from compound interest — money, relationships, habits — anything of importance.”

Jim Collins, a prominent business thinker, is known for the idea of the ‘Flywheel’, which he introduces in the book, “Good to Great”.

Jim summarizes the flywheel on this website, “The Flywheel effect is a concept developed in the book Good to Great. No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.”

The Flywheel is a simple concept, but it’s implications are powerful. Amazon has taken this concept to heart and their results are clear.

The Flywheel emphasizes the long term. It does not get overly concerned about external events that it cannot control. Collins talked to Bezos and team after the dot-com bust around 2001. Bezos stuck to their flywheel idea following the bust, and the results paid off. To get a better picture of this flywheel, consider Amazon:

Using the Amazon Flywheel as an example, we can attempt to apply this to our own lives. Getting your personal flywheel correct is difficult. It takes time to understand your strengths and what leads to success.

Jim Collins talks about his personal flywheel in an interview with Tim Ferris.

“The start of the flywheel is a key question, and in my case, it’s curiosity-fed big questions. That’s where my flywheel starts. It all starts with what am I curious about? That has to be at the beginning of everything. If I’m really curious about something, well then I can’t help but want to learn about it and do research on it. That will throw me into the research. If I do the research right and really, really throw ourselves into it and stand those creative hours of the research, well then I can’t help but have ideas and insights, concepts that come out of that research. Then, if I have those, then I can’t help but want to write them and teach them and share them.” This brings Jim back to the top of his personal flywheel.

An important point of the Flywheel is that each new leg of the Flywheel should be inevitable. As Jim says, he can’t help but move from each part of the flywheel to the next.

A general personal flywheel for a career may look like the following:

Collins stresses the circular nature of the flywheel. This means you have to avoid getting “stuck” at any one leg of the flywheel. If there is one leg of the flywheel that is not functioning as well as the others, you will not get the compounding rotations that makes it so valuable.

Simply, each leg must be performing at an 8/10 or above. If you have one leg performing at a 4/10, the flywheel will not be able to compound. For example, imagine the above flywheel where you are excelling at the work you perform. However, following this work, you are not increasing your network or trust within your organization. You may be at a point in your organization where you are not able to increase your opportunities and increase your expertise. Each leg of the flywheel must be functioning at a high level.

Bringing the personal flywheel full circle is more difficult to implement for an individual. In companies, this is typically the leg in the flywheel for research and development and investment back into the company.

In a personal flywheel, these investments are typically less tangible. You may build better habits, refine your skills, or increase your network. These will help start another rotation.

Similar to Amazon, the first rotations of your flywheel will be difficult. Each rotation will take effort and mistakes. However, the beauty of a flywheel is that once the rotations begin, they get easier and easier. People at the top of an industry illustrate this concept. Look at some of the leaders at your company or field - they are meeting new people, gaining new expertise, and improving. Their opportunities and experience seem to come faster than others at the company.

Flywheels are useful for further understanding your current situation. We can draw out flywheels for virtually anything we are looking to compound over a long period of time. Consider another example of a personal wellness flywheel.

Again, we can see that at each leg of the flywheel, the next step is inevitable. If I have a strong desire for wellness, then it’s inevitable that I’ll want to work out and eat well. The more motivated I am to stay fit, the more I can develop habits and routines around wellness. If I establish these routines, the results will be inevitable.

The wellness flywheel clearly demonstrates the 8/10 standard. We’ve all been at a wellness point in our lives where we don’t see positive results and don’t have energy (a classic 4/10 success). Once we’re at this point, at least for me, I have a low desire to rotate the flywheel and get healthy again. However, if I have energy and feel great, I have even more desire to maintain my wellness.

We must understand that the personal flywheel is dynamic. The personal flywheel will change when personal successes lead to more clarity. When we understand our strengths and weaknesses, we can refine how the flywheel rotates.

The point of personal flywheel is that it is personal. What are your strengths? Where do you find success?

Once you define your personal flywheel, you can double down on each point in the flywheel. You can focus on these points. Eventually, you will see the results as the flywheel gains momentum. As the flywheel builds momentum, the power of compounding takes into effect.