Jim Collins gave us one of the most useful metaphors in strategy: the flywheel. The idea is simple — success builds on success. Each turn of the wheel makes the next turn easier, until momentum becomes self-sustaining and competitors struggle to understand what they're up against.
The problem is what happens when the flywheel starts to slow.
Momentum is invisible until it's gone
A flywheel in motion looks a lot like a flywheel accelerating. The metrics are still good. Customers are still coming. Revenue is still growing. And so leadership teams do what worked before — they push harder on the same levers, invest in the same channels, optimise the same processes.
By the time the deceleration is legible in the numbers, the real problem is often six to eighteen months old. The flywheel didn't stop spinning on the day the earnings call went badly. It started slowing the day the company stopped doing the things that built the momentum in the first place.
The most dangerous moment for a company is not when things are bad. It's when things are still good but the underlying dynamics have already shifted.
Three ways companies miss the signal
Confusing lag indicators for leading ones. Revenue, profit, and market share are all lag indicators — they tell you what happened, not what's coming. The leading indicators are messier: customer acquisition costs creeping up, churn ticking higher in a specific cohort, sales cycle length extending in a particular segment. Most leadership teams don't have the discipline or the data infrastructure to watch these closely enough.
Survivorship bias in strategy review. Strategy reviews tend to focus on what's working. The initiatives that failed quietly get deprioritised and forgotten. This means the learning loop that should catch early warning signs — why did this not work, and what does that tell us about the market? — never closes properly.
Momentum as identity. In successful companies, the things that built the flywheel often become part of the company's identity. "We grow through word of mouth." "We win on product." "Our culture is our moat." These were once accurate descriptions of a competitive advantage. Over time, they become assumptions — and assumptions that go untested long enough become blind spots.
What to do about it
The most honest thing I can say is that there is no clean solution. Companies that navigate this well tend to have a few things in common: a leadership team that maintains genuine curiosity about why things are working (not just that they are), a willingness to run experiments that challenge current assumptions rather than just validate them, and a culture where surface-level contrarianism — "what if we're wrong about this?" — is rewarded rather than punished.
The flywheel is a powerful concept. But it's most useful when you use it to ask: what exactly is spinning, and why? Not as a comfort, but as a diagnostic.
The companies that fall off the cliff almost always had time to see it coming. They just weren't looking.