Monday, January 9, 2012

Flywheel Momentum

Many business leaders trying to change their culture often adopt practices that are fun but superficial. They look at successful companies like or the fish market at Pikes Place in Seattle. They buy the books, watch the videos and think they are creating a culture that will be sustainable and create growth. Some employee-owned companies (ESOP's) do the same, thinking they're creating an ownership culture that will create success when they celebrate October's Employee Ownership Month, have summer picnics and other fun events around the theme of ownership. These are not the elements that create engagement or ownership thinking. Those elements are just programs for which the rewards have to be raised in order to generate levels of participation. Wellness programs that are absent of a supportive corporate culture find that the costs of getting people to take a health risk assessment have doubled or tripled in the space of a few years to maintain the same percentage of participation. If it's part of the culture, the efforts to create improvement are not seen as a program. "It's just the way we do things here," you'd hear.

Great companies create momentum around their vision. Jim Collins' describes Good to Great companies cycling through Disciplined People, Disciplined Thought and Disciplined Action till they're nearly unstoppable. Great engaged-people companies cycle through steps that generate energy in the workforce. Once the momentum is built up, it's like a perpetual enthusiasm machine. Employees feel like owners because they have a stake (like job security, and/or a bonus and/or growth in wages). That flywheel momentum is a deeper, more stable, more sustainable competitive advantage.

You can't go wrong following the Great Game of Business methodology. It's more than open book management. By going through the steps repeatedly, you build a strong culture based on mutual success. Does it work? While the S and P 500 has gone up 400% in 20 years, and Berkshire Hathaway has gone up 1600%, GGOB's parent, Springfield Remanufacturing Company, has created value at the rate of 27,800% over a 20 year period.

What are the steps:
1) Begin with the right leadership--trust, constructive conflict, commitment, accountability, results focus, open book leadership
2) Share the Why before the How
3) Open the books and teach the numbers
4) Apply high involvement planning--get people involved in developing and critiquing the strategic plan
5) Focus on the critical number--the one thing that defines success for the organization
6) Act on the right drivers--get everyone aligned to create positive movement on that critical number, create a line of sight from each person to the goal and show them how they can contribute
7) Provide a stake in the outcome
8) Keep score--does everyone know if they're winning or losing?
9) Follow the action--frequent and effective two-way communication
10) Create an early win--win early, win often


You and other leaders may not get it right the first time. Your employees won't catch on the first time. That's why repeating is important. The more you repeat, you cycle through the steps. You get your ocean liner of an organization up to a good speed. The people are engaged and you'll plow over your competition. Look at the steps. Though it comes from "Great Game of Business," it's not a program that needs more and more energy to keep it going. It becomes self-sustaining. After the initial cost, it's free and, better yet, it creates greater cash flow year after year.

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