One of the most useful management tools is the feedback loop.
Feedback involves some mechanism that provides you with data on whether your actions are focused toward your objective.
When you’re off track, a well-designed feedback loop gives you some kind of indicator.
When you’re on track, the same feedback loop provides confirmation to give you confidence that you’re heading in the right direction.
For example, in some parts of the United States, the lanes of a road are delineated by both painted lines and circular “bumps.”
Under good driving conditions, we all drive by using the painted lines as a guide.
However, when there's a downpour or fog rolls in, visibility on the road can be extremely poor. Sometimes, it’s extremely difficult to see those painted lines.
In this situation, I can tell if I’m inadvertently drifting into an adjacent lane because suddenly one side of my car vibrates like crazy as I’m running over those bumps between lanes.
That’s a feedback loop.
Tracking your sales team's sales performance is an example of gathering performance data. Sharing that data with each individual salesperson daily is a feedback loop.
Publishing every salesperson’s revenue production for the day in a place where everyone in the sales department can see it is a feedback loop (combined with peer pressure).
When I walk into a client or portfolio company, the first thing I do is request all relevant performance data. The second thing I request is that the data be continually updated so we can track the progress of our efforts.
Without the feedback loop, it’s impossible to tell if the actions we take are helping or hurting us in our efforts to reach the goal.
In my business, we have feedback loops at the annual, quarterly, monthly, weekly, and daily levels. I have daily business performance metrics going back to 2004.
The quote “what gets measured gets done” is very true.
To develop a feedback loop, you need three things:
- A goal
- A method of measuring progress
- A reporting interval
If you want to lose 10 lbs. (4.5 kg) of weight, the 10 lbs. (4.5 kg) is “the goal.” The unit of measure is pounds (or kilograms). The reporting interval is how often you step on the scale.
If you want to increase sales by $1 million, that’s the goal. The unit of measure can be dollars booked, contracted, or collected. The reporting interval is how often you calculate your sales performance (which could be hourly, daily, weekly or monthly).
My question for you today is this:
What do wish to achieve in your life?
Have you defined a goal?
Do you have a method of measuring progress?
If so, how often do you measure?
Some people think of success as some magical formula. For me, success comes from doing fairly simple, basic things with consistency over long periods of time.