#21: The hedgehog and flywheel concept, with Jim Collins

In Episode 20, we featured a discussion with Jim Collins about concepts in his book Great by Choice, and his mission to study and scientifically determine what makes some companies succeed while others fail.

In their discussion, Paul and Jim had also spoken about the concepts Jim made famous in one of his best-known books, Good to Great, which has become required reading in business schools. For that seminal book, Jim and a group of researchers looked into how companies made the transition from just a regular company to a standout organization that perpetuated success. They came to understand some common traits that seemed counterintuitive. For example, the charismatic, white knight CEO rarely saves the day, but more often sinks the company. Instead, it’s the plodding tortoise that wins these races – or as Jim and his group put it, the hedgehog that wins the fight.

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SHOW NOTES:

02:30  Jim’s hedgehog and flywheel concepts go back years. But in today’s economy and with our ever-changing technology, they are as relevant as ever.

03:50  In order to understand Jim’s hedgehog concept, you need to understand the three circles that feed into it.

05:20  How does one discover what their hedgehog is? Jim says that, sometimes, you find it through empirical testing.

08:30  Paul talks about how he’s put Jim’s flywheel analogy to use.

09:40  Jim explains the “cumulative” aspect of the flywheel concept.