flywheel strategy - Blog - Global Risk Community2024-03-28T20:19:05Zhttps://globalriskcommunity.com/profiles/blogs/feed/tag/flywheel+strategy3-Phase Flywheel Strategy Approachhttps://globalriskcommunity.com/profiles/blogs/3-phase-flywheel-strategy-approach2021-10-10T07:47:42.000Z2021-10-10T07:47:42.000ZMark Bridgeshttps://globalriskcommunity.com/members/MarkBridges<div><div class="entry"><p><span style="font-size:12pt;"><a href="{{#staticFileLink}}9662216489,original{{/staticFileLink}}"><img class="align-right" src="{{#staticFileLink}}9662216489,RESIZE_400x{{/staticFileLink}}" alt="9662216489?profile=RESIZE_400x" width="289" height="245" /></a>Strategy Development has followed a set path since the last century where a predetermined, rectilinear, and inflexible approach defined the process.</span></p></div><div class="entry"><p><span style="font-size:12pt;">In the 21<sup>st</sup> century, however, business leaders are devising Strategy by evolving it into a probabilistic, repeated, and multifaceted process. An approach that can both endure and adapt to the growing pace of Change and <a href="https://flevy.com/business-toolkit/disruption">Disruption</a> that is manifesting itself in all industries.</span></p><p><span style="font-size:12pt;">Using gaming, AI, unremitting execution, and adjustment, with numerous scenarios to deliberate on, leaders create “Flywheels” that successfully tackle the not so deterministic world where the future is highly uncertain.</span></p><p><span style="font-size:12pt;">Flywheel is a concept originally used in the power industry to explain an origin of stabilization, energy storage, and momentum. The concept was propagated in the Strategy context by author Jim Collins. Employing the Flywheel concept, executives are able to validate assumptions through simulations as well as in the real-world scenarios.</span></p><p><span style="font-size:12pt;">Rather than using past assumptions and relying on instincts, using the Flywheel Strategy, decision makers exploit the power of <a href="https://flevy.com/business-toolkit/artificial-intelligence">Artificial Intelligence</a> (AI) and <a href="https://flevy.com/business-toolkit/analytics">Advanced Analytics</a>. They model the multitude of variables and produce a sizable number of simulations that propose many strategic bets, option-value bets, and no regret moves.</span></p><p><span style="font-size:12pt;">Instead of numbing decision-makers with a profusion of options they created, the simulations render elucidative insights. Also, the AI system is made more capable through learning mechanisms called Reinforcement Learning by selecting from the above strategies.</span></p><p><span style="font-size:12pt;">The collection of strategic choices is increased exponentially and cost of experimentation is diminished by this approach. Decision-makers are also empowered by this tool to make better decisions. Likewise, organizations are able to select accurate market approaches, pricing, advertising, and customer strategies for several cities and communities, over a time span.</span></p><p><span style="font-size:12pt;">Strategy Flywheels can be used as a basis for developing Growth Flywheels by organizations. The Flywheel Strategy approach consists of the following 3 phases: <strong> </strong></span></p><ol><li><span style="font-size:12pt;"><strong>Sense: Market Sensing</strong></span></li><li><span style="font-size:12pt;"><strong>Think: Strategy Formulation and Investment Planning</strong></span></li><li><span style="font-size:12pt;"><strong>Act: Performance Evaluation and Learning</strong></span></li></ol><p><span style="font-size:12pt;"><a href="https://flevy.com/browse/flevypro/flywheel-strategy-5904"><img class="aligncenter size-full wp-image-9764" src="https://flevy.com/blog/wp-content/uploads/2021/10/Slide-Deck-Image-Fly-Wheel-Strategy.png" alt="" width="702" height="526" /></a></span></p><p><span style="font-size:12pt;">The dynamic and resilient Flywheel Strategy of Sense, Think, Act has 3 parts, which are based on establishing policies, contending with dynamic models within the background of environmental assumptions, and handling randomness.</span></p><p><span style="font-size:12pt;">Let us delve a little deeper into the 3 phases.</span></p><h3><span style="font-size:12pt;"><strong>Sense: Market Sensing</strong></span></h3><p><span style="font-size:12pt;">Environmental assumptions are formulated through this procedure of extraneous Market Sensing.</span></p><p><span style="font-size:12pt;">Uncertainties to which probability assignment is difficult are the target of Market Sensing activity. Most urgent strategic matters can be detected and senior leaders consistently engaged in devising a response to them by recurrently sensing extraneous market changes.</span></p><p><span style="font-size:12pt;">Improvements in Machine Learning and cutting-edge AI can aid in not only expanding the quantity of information scanned but also enhancing the quality of content evaluated.</span></p><h3><span style="font-size:12pt;"><strong>Think: Strategy Formulation and Investment Planning</strong></span></h3><p><span style="font-size:12pt;">Conventional strategic thinking can be aided in the new way of strategizing by the 3-phase process for Gamification—Design and Build, Simulate, and Evaluate.</span></p><p><span style="font-size:12pt;">A stable strategy consists of a portfolio of investments and projects with diverse risk profiles. Diverse risk profile of performance is a mix of:</span></p><ol><li><span style="font-size:12pt;">No-regret moves</span></li><li><span style="font-size:12pt;">Strategic bets</span></li><li><span style="font-size:12pt;">Option-value bets<strong> </strong></span></li></ol><h3><span style="font-size:12pt;"><strong>Act: Performance Evaluation and Learning</strong></span></h3><p><span style="font-size:12pt;">Performance Evaluation and Learning from the efforts has to be carried out so that improvement in proficiency to sense the market and experiment with new ideas occurs.</span></p><p><span style="font-size:12pt;">Interested in learning more about how Amazon and Uber used Flywheels, how the Gamification approach is used in Flywheel Strategy formulation, and what constitutes a diverse risk profile? You can download <a href="https://flevy.com/browse/flevypro/flywheel-strategy-5904"><strong>an editable PowerPoint on Flywheel Strategy here</strong></a><u> </u>on the <a href="https://flevy.com/browse">Flevy documents marketplace</a>.</span></p><h3><span style="font-size:12pt;"><strong>Editor's Note:</strong></span></h3><p><span style="font-size:12pt;">If you are interested in becoming an expert on Strategy Development, take a look at Flevy's <a href="https://flevy.com/browse/stream/strategy-development"><strong>Strategy Development Frameworks</strong> offering here</a>. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. <a href="https://flevy.com/browse/stream/strategy-development">Full details here.</a></span></p></div><div class="entry"><h3><span style="font-size:12pt;"><strong>Want to Achieve Excellence in Strategy Development?</strong></span></h3><p><span style="font-size:12pt;">Gain the knowledge and develop the expertise to become an expert in Strategy Development. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. <a href="https://flevy.com/browse/stream/strategy-development">Click here for full details.</a></span></p><p><span style="font-size:12pt;">"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu </span></p><p><span style="font-size:12pt;">For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. 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