In Understand Success – Your Flywheel Architecture & Extensions we shared how Circuit City built an extraordinary business, created a flywheel extension in CarMax, while falling into the doom loop and eventually extinguishing itself.
In Amazon Flywheel transformed its business - Bezonomics we shared how when Jeff Bezos faced uncertain times in 2001 he brought in Jim Collins to help his leadership discover their flywheel, which Bezos calls Amazon’s secret sauce, the key driver to Amazon's success.
That blog started with Collins’ quote from his Stanford Graduate School professor which inspired his journey to write his books:
"The greatest danger in business and life lies not in outright failure but in achieving success without understanding why you were successful in the first place."
~ Robert Burgelman, Stanford Graduate School of Business Strategy Professor
In Good to Great to Gone: The 60 Year Rise and Fall of Circuit City, Alan Wurtzel illustrates the principles from Good to Great. Wurtzel shares 12 Habits of Mind he considers essential to organizational success.
Success
What does success look like in your business? Does success look different today then it did just a few months ago before COVID19 started?
Perhaps it wasn’t as important to understand why you were successful before, as it is now.
Circuit City failed for a variety of reasons. Leadership was a primary reason. 1999-2001 was the last year the company created and approved a three-year plan. That plan was flawed. The plan identified the issues Circuit City faced, proposed aspirational goals, yet it failed to set clear strategies to accomplish them or the metrics to show if they were achieved.
Execution, as we define it in Scaling Up, is divided into three disciplines (routines) fundamental to execution:
Circuit City failed to set priorities and execute against those objectives.
It should be noted Alan Wurtzel left the Circuit City board and sold his stock in 2001.
Why Circuit City Failed
Wurtzel offers this verdict of Circuit City in his Epilogue:
In the end success business – and this includes the business of not-for-profit organizations comes down to two things: strategy and execution.
Strategy is the art and science of harmonizing organizational goals, resources, and talent with the relevant external environment. This requires the hard work of developing realistic organizational goals as well as objectively assessing organizational capacities, and the equally difficult task of understanding the environment and sorting out what aspects of that environment are relevant to your success. Strategic planning is analytical process that takes both time and mental effort. The task is too important for the CEO to delegate and too burdensome to be done annually.
Execution is about management, and management is about achieve results through the efforts of other people. This requires being a leader, motivating others, setting standards, and demanding accountability. Being a good leader has more to do with values, feelings, empathy, and a host of other “soft” skills for which analytical thinking is a lot less relevant, and may on occasion, be counterproductive.
Flywheel
Sam and Alan Wurtzel followed Jim Collins and Morten T. Hansen, Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All, quote, “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline” to achieve greatness.
CarMax is Circuit City’s most enduring tangible legacy. Had the leadership successors understood their success, perhaps Circuit City would still be around.
Is it time your business identified why you are successful? Is it not only time to discover your Flywheel, but build an extension of it? To discover your Flywheel Architecture, contact us today to schedule an exploratory meeting.
Growth demands Strategic Discipline.
Discipline sustains momentum, over a long period of time, laying the foundations for lasting endurance.
Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.
Let Positioning Systems help your business achieve these outcomes on the Four most Important Decisions your business faces:
DECISION |
RESULT/OUTCOME |
PEOPLE |
|
STRATEGY |
|
EXECUTION |
|
CASH |
Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing! Contact dwick@positioningsystems.com to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.
Amazon is incredibly successful. One of the reasons is leadership owns their dependencies. I’ll share three easy steps from Think Like Amazon: 50 1/2 Ideas to Become a Digital Leader, Jeff Bezos uses to manage dependencies to deliver outstanding results. That's next blog.