1. The Flywheel and the Doom Loop John Shonk Bob Odgers Donald Ewalt

2. I’ve Got to Be Unstoppable http://www.youtube.com/watch?v=GA8z7f7a2Pk

3. Buildup and Breakthrough View from the outside No single defining action No name for their progress ◦ UCLA Bruins (1948-63)

4. Not Just a Luxury of Circumstance Short-term constraints Blue Plans

5. The “Flywheel Effect” Steps forward consistent with the Hedgehog Concept Accumulation of visible results People line up, energized by results Flywheel builds momentum

6. The Doom Loop This occurs when: ◦ Flywheel is going in one direction ◦ Then stopped ◦ Change course ◦ And continue in another direction

7. The Doom Loop

8. What Causes A Doom Loop Misguided Use of acquisitions: ◦ When core business is treading water ◦ Dive into a big acquisition in to:  Increase growth  Diversify away their troubles  Make CEO look good Leaders who stop the flywheel: ◦ Current CEO  Gets the flywheel going  Builds momentum  Identifies hedgehog ◦ New CEO takes over  Stops the flywheel  Changes direction  Tries to save company again

9. Flywheel and Summary Consistence Leading Follow hedge hog concept Follow discipline people  disciplined actions  disciplined thought Takes time, after momentum BOOM.

10. Flywheel and Summary FLY WHEEL Follow pattern of buildup that leads to break through Attain consistency with clear hedgehog concept Make acquisition after breakthrough, build momentum Spend little energy motivating people DOOM LOOP Skip buildup and jump to breakthrough Embrace fads management hoopla lurching back and forth outside of 3 circles Make acquisitions before breakthrough, fear of left behind Spend a lot for energy trying to motivate people

11. Schlotzsky’s 1971 muffuletta stuffed with three meats, cheeses, lettuce, tomato, olives, and dressing on a sourdough bun. Wanted market share of Subway, Quiznos, and Panera. ( diversified from six sandwiches to 15 and adding pizzas and salads and cafe) Big building, lounges, like star bucks, computers. Crazy advertising campaigns promotions buy back restaurant development rights 28 million. 1994-2000, turnkey program, too many stores. http://www.austinchronicle.com/gyrobase/Issue/story?oid=oid%3A232204

12. Schlotzsky’s