The flywheel and the slywheel

A flywheel multiplies value, a "slywheel" obfuscates it. If you can’t get a flywheel effect going within your organization, it might be because there’s a slywheel effect at play. 

A slywheel is easy to miss. To the untrained eye, it doesn’t even look like a wheel. It looks like a nice smooth runway from which initiatives take flight. The slywheel begins to appear when you ask, “What value has it delivered?”

The classic enterprise does not ask this question at all. Initiatives are funded based on promises of value but there is no validation later. That’s a spray-and-pray approach to investing in initiatives.

A spray-and-pray approach has other adverse side-effects. It ends up bloating the tech landscape and therefore the tech budget. In good times, budget bloat might lead to a transformation initiative getting funded. In the not-so-good times, bloated budgets simply get cut. More of the slywheel reveals itself.

2023 is already shaping up to be a year of cuts.

But the years leading up to 2023 were different. Transformation initiatives did get funded. Unfortunately, they did not deliver as much as they could have, had they paid attention to both, tech delivery and benefits validation. Instead, they fixated on the former and neglected the latter. Value was anyone's guess.

When money is easy to come by, we tend to squander. Startups fell into the same trap. They spent on too many initiatives (product variations, features) without proper feedback loops. This is not about experimentation. It is about making a habit of assessing commercial impact of efforts.

There is growing recognition of the slywheel. I see it in how leaders receive the Business Impact Retrospectives method today. Although the method ensures both effective and efficient use of innovation capital, when I shared it earlier, a leader in the startup ecosystem questioned the need for it, saying startups don’t need to worry about the efficient use of capital available for innovation. Hopefully they don’t think so anymore.

Until next time, take care and prosper.

Sriram

agileorgdesign.com

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