Every action taken in your business is either a driving force that builds momentum or a cause of friction that slows you down. Consider someone who finds your company online while searching for a product you offer. They see your ad, click through to your website, and go straight to your site’s homepage. The visitor clicks around on the menu to see if they can find the product they want and are disappointed when they cannot do so. Frustrated, they scroll up and down the homepage and find little information on their specific questions.
They leave the site, go back to the search engine, and click your competitor’s link.
The driving force in this scenario was a well-placed ad with compelling copy encouraging the person to visit your site. However, sending them to the homepage instead of a specific product page caused friction and ultimately resulted in them leaving the site without contacting you.
Imagine another scenario where, after doing all the steps leading right up to a sale, the potential customer asks for financing options. The sales rep pulls out a finance application, and when the prospect asks for help calculating different options, the sales rep turns white in the face, fumbles around with the numbers, and blows the deal.
There were many positive driving forces. However, the singular cause of friction (not clearly explaining the finance options) caused the sale to be lost.
In last month’s article, we dove into why the traditional marketing funnel needs to be molded into a closed-loop system that feeds momentum into your company’s flywheel.
The business flywheel allows us to view the business more holistically. It shifts the focus from the end result (a sale) to continuous improvement that builds lasting momentum and energy that can then be released at critical times.
A natural outcome of our shift in focus is seeing opportunities to craft superior customer experiences. These become the catalyst our customers need to share our business by word of mouth. The output is that our customers, passionate team members, and goodwill become the “stored energy” inside our flywheel.
Defining Your Business’ Flywheel Components
The secret to building momentum in your flywheel is to define its components based on your unique business. While some companies may have similar components, how you express these should align with your company values and goals, making them unique.
A component is a high-level input that helps create self-sustaining momentum. In Jim Collin’s monograph, “Turning the Flywheel,” he prescribed no more than six components and no fewer than four be attributes to your flywheel.
To start, set a meeting with your team and ask the following questions:
- What are the essential things that we do that drive our business forward?
- What successes have we had as a company that are repeatable?
- What failures have we had?
- Based on what has consistently worked and what hasn’t, what components can we extract for our flywheel that will be a driving force in our organization?
- Which component is the most important?
- Which should come next, and next after that?
Once you have the outline of the basic components, how do they match up against the reality of successes and failures in your business? Do these components align with your company’s core values? Boil down to the key factors that have propelled you forward and place them in “buckets.” Soon you’ll start to see four to six components emerge. Once you have the outline of the basic components, how do they match up against the reality of successes and failures in your business? Do these components align with your company’s core values?
Boil down to the key factors that have propelled you forward and place them in “buckets.” Soon you’ll start to see four to six components emerge.
Here are a few examples of a flywheel’s components:
- Efficient, effective, environmentally sustainable products;
- Socratically built, value-driven team culture;
- Customer-first marketing & sales; and
- Exceptional, craveable customer experiences.
As you build out your components, think about how each component impacts the others. Could you have a value-driven company culture if you didn’t offer an efficient and effective product? I’d argue that your culture would not stay positive for long.
Each component is filled with daily actions, decisions, and inner workings that affect the amount of force applied to the flywheel. If each detail is held up and examined in light of your overall company values and goals, it will be easier to apply labels of “force” or “friction” to identify areas for improvement.
One person’s experience on your website may not be enough to raise an eyebrow. However, if hundreds of people are clicking your ads over a month and are experiencing the same thing, it needs to be addressed.
Using the Pareto Principle to Identify Areas for Improvement
One day while gardening, a man named Vilfredo Federico Damaso Pareto made an astounding discovery. He observed that 80% of his healthy pea pods came from 20% of the pea plants. This realization led him to a universal truth about the imbalance of inputs and outputs. It was from this discovery the Pareto 80/20 Rule was born, which states 20% of inputs result in 80% of the outputs.
In business, this may manifest itself through 20% of products generating 80% of your sales or 20% of the tools in your warehouse getting 80% of the use.
When we layer this principle over our flywheel, it helps us identify the 20% of our daily actions in a company that yields 80% of the growth and similarly helps shine a light on the 20% of the things we do that cause 80% of the friction.
Using your Unique Forces to Fuel all Your Flywheel Components
Coming from a marketing and sales perspective, I often find that many of the things businesses do to create an exceptional experience for their customers get overlooked in their marketing message. Perhaps not sharing these little morsels of differentiation with their marketing team is due to the dulling that happens over time where routine things no longer feel special. Perhaps the marketing company never asks what makes your company unique. Perhaps these differentiators are hidden in the vaults of faulty processes or a jaded team environment.
There’s no time like the present to dust off these differentiating diamonds and use them to fuel your marketing and sales efforts.
Likewise, in the four components of our example flywheel, does everyone on your team know about the things that make you exceptional across departments? Do they have messaging and processes that make it easy for them to remember and share these?
What about your customer? Once someone purchases equipment, are they retained and valued as an essential part of your business flywheel, or is the unequal distribution of mass from people coming in and not being retained causing customers to fly off your flywheel into the abyss?
As we mold the marketing and sales funnel into a closed-loop system that helps fuel your business flywheel, don’t forget to feed data and relevant information back into that system. Lead-to-appointment-to-sales metrics can help your marketer better understand what’s working to attract, nurture and convert new customers. Likewise, they can also use marketing tools to help you retain and delight those who have already purchased from you. The freer the flow of information between departments, the more momentum you’ll build.
- Collins, Jim. Good to Great. HarperCollins Publishers, 2001
- Forbes, The 80/20 Rule and How It Can Change Your Life. https://www.forbes.com/sites/kevinkruse/2016/03/07/80-20-rule/
- Collins, Jim. Good to Great. HarperCollins Publishers, 2001, pg. 169