“All purposeful behavior may be considered to require feed-back. If a goal is to be attained, some signals from the goal are necessary at some time to direct the behavior.” —Norbert Wiener, father of Cybernetics & Control Systems
From investment banking to homeostasis to climate change, feedback loops are everywhere, and play a major role in the way we navigate through life and business. But what is a feedback loop? How do they work? And what can I do to make my own feedback loops more efficient and effective?
A feedback loop is defined as a system where the output of a system becomes the input for the next iteration of the system. This simple idea is found everywhere: homeostasis of the human body, investment banking, thermostats, biological ecosystems, and many more. Any system that takes processed information and uses it to control or modulate itself can be considered a feedback loop.
Feedback loops come in 2 forms: positive feedback loops and negative feedback loops.
Positive feedback loops are self-amplifying cycles that seeks to increase a signal that comes through. A perfect example comes from the banking world in compound interest, where money in an account continually benefits due to interest being added and further compounded. After every year, the money in the account is more than the last year and the overall amount increases in a rapid fashion due to the progressively larger balance in the account.
Negative feedback loops react to a change and use mechanisms to reduce or reverse the change. A great example of this is a thermostat. When a high temperature is detected, the loop begins by activating the air conditioner to drop the temperature. Every minute, the thermostat gets a measurement of the temperature and continues to blow cold air until the ideal temperature is reached, and the cycle ends until another high is detected. Negative feedback generally increases a systems stability, modulating effects to keep within a normal range.
A well known example of feedback loops applied to the context of business and decision making is the OODA loop, which consists of 4 phases — Observe, Orient, Decide, Act — with each phase feeding information back into a set of observations that continually improve the process. Though it originates in military doctrine, it’s now widely used in business as a tool for decision making.
Even with a well designed workflow for processing feedback, the speed with which you react to a stimulus is also important to consider. What good is a thermostat that cools your house down 3 weeks later? Or what good is product feedback that gets received months after the product line is shipped? The costs of delayed communication are many — loss of opportunities, lack of situational awareness, or delayed reactions and responses to problems.
For decision makers, this is a major concern. More often than not they are reliant on accurate data coming in from the field or from other team members, and need to know the details about a problem or situation in a timely manner. Yet many times, inefficiencies in the communication system provide latency that hinders progress.
Latency in a business’s communication system can come in many forms: delayed reporting, data entry or transcription errors, or incomplete, inaccurate, or duplicate information. In short, by reducing latency and improving the speed of a feedback loop, we can gain more accurate information faster and gain a better understanding of a situation in order to make better decisions. Let’s look at a few ways we can reduce latency in a business context.
You have a field service team that goes to a variety of locations daily for service calls. Your team has clipboards where they take notes, fill out service orders, and at the end of each day provide headquarters with a paper report updating management of their work for the day: repairs completed, issues observed, and follow-up visits to conduct.
In this example, there are several inefficiencies and latency issues to address that would improve communication, improve service quality, and give headquarters a more accurate picture of the field service team.
First, headquarters doesn’t know what parts to order until a team member returns at the end of the day. This leads to a delay in ordering, which delays installation, which delays solving a customers problem. If there was a way to send your service order instantly, the order could be placed within minutes of request, allowing your repair company to react quicker to your customers’ needs, and improving customer service.
Next, waiting for an end-of-day report means that headquarters is being reactive, not proactive. They must wait to learn about issues, problems, and new business and can’t act on an issue until long after a team member returns for the day. By sending this information in real time, a business can prepare for an issue immediately or take advantage on a new opportunity.
Lastly, if the handwriting on a form is unreadable or the form is damaged or lost, this leads to additional delays on top of existing delays. Another day gets wasted going back to collect the information, and return to headquarters to transcribe the information before the process can continue.
We spend a lot of time working with customers on using technology to tighten their feedback cycles through improved process, business rules, and workflow design to shorten the distance between an input and an answer. To business analysts, GIS support staff, and project managers, data from the field is their currency. They can’t do their jobs and answer questions about organizational effectiveness without timely and accurate information from below. And without an efficient cycle of feedback, staff in the field suffer, as well. Just as office staff demand better, faster information flows, field staff also need to know where to focus their attention to make improvements and corrections. The tighter these lines of communication, the healthier the organization.
Improving your feedback loop can be as simple as changing your process (like having your field team call headquarters for every new order) or introducing better field communication tools like Fulcrum.
If you feel like your business processes could be improved with real-time updates, better field data, and fast reporting, we invite you to try Fulcrum FREE with your team by visiting our signup page. And if you have any questions, just drop us a line and we’ll be glad to help.