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Feedback Loops in Business

Feedback loops play an important role in all aspects of life.

Feedback loops influence our behaviour by keeping us safe and healthy and they also measure our progression toward outcomes through positive or negative feedback. We utilise feedback loops as tools of improvement so we can constantly evolve and thrive.

All organisations need to monitor performance and seek ways to improve in order to stay relevant and to thrive. A competitive market also means companies need to surpass their past performances. Feedback loops are keys of awareness that provide the insight and direction in which to improve and to steer growth. To stay healthy, every aspect of a business needs feedback loops.

If a company isn’t measuring data on its work, they are unaware as to what is working and what is not. Customers, employees, teams, departments, production areas and marketing should contain feedback loops.

There is one key characteristic to any feedback loop – the output from one cycle becomes the input for the next cycle. All Feedback loops measure something and that measurement becomes the starting point for the next cycle of behaviour. For example, you produce something, measure information on the production and then use that information to improve production. It is a constant cycle of monitoring and improving.

Ways to Incorporate Feedback Loops in Organisations

There are simple ways to incorporate feedback loops within an organisation.

Begin with staff – engaged and valued talent is your foundation stone to growth.

Encourage a communicative culture – effective team communication is the best way to keep your staff engaged. Let your team know that you’re addressing their needs by improving team communication.

When people feel heard and issues raised are addressed and resolved, you are communicating action. It creates a healthy dynamic, a work culture of mutual trust among staff, management and leadership. This encourages a culture of transparency and honesty; essential for staff retention and developing high potential employees.

Most companies have a performance review process where managers provide structured feedback to their employees. While a good practice, this system needs to include regular feedback loops, rather than the once a year, sit down review meeting. This will improve employee performance and employees are afforded the opportunity to constantly improve work efficiency and thrive when given the opportunity to give and receive constructive feedback.

Marketing & Sales – feedback for your value propositions through marketing activities is essential.

Audiences move quickly, therefore it is imperative that feedback is built into these processes to ensure you stay relevant. Creative marketing activities across mediums are all means by which you can generate more impact, awareness, education, conversion, retention, and advocacy. Increasingly, this feedback is being gained and used to respond and act in real-time. You need to be conscious of how these feedback loops are working and what they are showing about your product or service.

A proportional part of any company’s budget is devoted to marketing and advertising and you want to make sure that budgeted dollars are being well spent and contributing to the company’s bottom line. One good way to see if your company’s marketing plan is working is through what is called ‘closed loop marketing’. This feedback loop opens up the lines of communication between the company’s sales and marketing teams. The two areas are able to analyse how the current marketing strategies are working to help target their future marketing campaigns more successfully. Sales assist Marketing with data on how customers arrived at their product or service and what they did after they got there.

Another key data collection and analysis tool for constant improvement is through your website and social media platforms. Mainstream use of the internet has created advanced web tools like Google Analytics which give businesses the chance to take a much more detailed look at their marketing methods. This feedback tool can show you more specifically where to focus your future marketing efforts. This helps to break down results to get a clearer picture of what happened in the marketing to sales process and also helps you to narrow your target audience. If used correctly, this tool has the potential to shorten the gap between marketing to sale time. This feedback loop helps you to set more realistic goals with future marketing and sales strategies. Keeping marketing costs effective and increasing your profit line.

Effective feedback loops also allow employees to understand how their actions are directly impacting the success of the company. This promotes feelings of pride for valued contribution, ownership and belonging. These feelings strengthen the emotional affinity toward your organisation’s success.

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