Summary of Powering the Innovation Flywheel in the Digital Era

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Powering the Innovation Flywheel in the Digital Era summary

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The flywheel approach is driving innovation velocity at thriving companies like Tesla, Slack and Square, and galvanizing transformation at established nondigital enterprises such as Starbucks and UPS. For companies in any sector and at any level of digital maturity, this approach promises to drive ever-increasing customer engagement and innovation. To explain the power and inner workings of the flywheel approach, Boston Consulting Group offers a practical white paper. 

About the Authors

Charles Gildehaus and David Allred are co-founders of BCG Digital Ventures and managing directors and partners at BCG. Euvin Naidoo is a senior lecturer of business administration in the accounting and management unit at Harvard Business School. Anil Podduturi is a managing director and partner at BCG and a member of BCG Digital Ventures.


The flywheel approach links customer engagement, data gathering and innovation to drive value generation.

As leaders ask how they can embrace the accelerating potentials of digital technologies, lifestyles and mind-sets, the innovation flywheel offers an answer. The flywheel approach means boosting customer engagement to gain information and data, drawing insights from that information and data, innovating from those insights, and completing the cycle by using those innovations to drive increased engagement and, in turn, larger volumes of data.

Tech giants Apple, Google, Facebook, Amazon and Netflix all relied on innovation flywheels as engines of their phenomenal growth. For example, Netflix gathers data on more than 50 billion hours of streaming annually and applies algorithms to this data to provide customized content. Netflix saw its customer base grow fivefold over the past eight years thanks to the engagement engendered by its innovation flywheel. Tesla, Slack and Square are applying the flywheel approach to new sectors, and nondigital natives such as UPS and Starbucks have been building flywheels to transform their fulfillment networks and customer experience...

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