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Why You have to Shift from Linear Thinking to Circular Thinking

We live in a world that accelerates at a pace few of us can cope with. While things change at a breakneck speed, our brains compensate by showing a growing lack of focus. However, our fascination with anything ‘new,’ causing a bombardment of our brains with dopamine, drives our craving for instant gratification. Although these kinds of hyper-short feedback loops have become the norm, this is not the kind of feedback loop needed for sustained growth to occur in business.

But before discussing what kind of feedback loop is needed, or even why we need it, let’s have a look at the following image, beginning with the graph in the top-left corner while following the blue arrows in a clockwise direction:

ROUNDMAP_Linear_Circular_Shift_Copyright_Protected_2022

Let’s review each of these graphs:

  1. This shows what growth (apparently) looks like to most sales managers: target-setting has little to do with actual growth; all the more with the level of ambition.
  2. This is another far-fetch from reality: growth isn’t realistic from the start and decline often happens sooner than anticipated.
  3. This is a more realistic view: growth takes time to occur, accelerates until it reaches a plateau, then starts to decline; first slowly, then accelerated.
  4. This shows that (upfront and ongoing) costs related to growth mean only a tiny window of opportunity left for profit.
  5. This indicates that the graph mimics a wave pattern that can be divided into segments: two segments of growth (boom) and two segments of decline (bust).
  6. Finally, the sine wave pattern comes not from a linear progression instead from a circular one: growth is a cyclical process ─ that can be extended like any lifecycle.

You may recognize the Bell curve or normal distribution from Roger’s Diffusion of Innovation curve as shown here:

Rogers-diffusion-of-innovations-bell-curve[1]

Rogers explained that:

  • Growth typically begins slowly (S1), following a bell curve.
  • Once we’ve crossed the well-documented ‘chasm,’ growth will pick up speed (S2) until it reaches a plateau.
  • After that (S3), growth will decline until it reaches maturity (S4).
  • Growth can be extended, delaying state S4, but maturity is inevitable.

Is growth finite? Yes, all growth is limited, but if growth is about a standardized product, the lifetime of the product may be significantly longer, i.e., the demand for peanut butter is not likely to end anytime soon.

But all growth, i.e., all lifecycles, can only be extended to a certain point, provided that we use a feedback loop and use it effectively.

The Feedback Loop

I hear you say, what is a feedback loop, and why do we need it?

Bear with me.

Our lives are finite ─ at least, according to the latest science (and we have the graves to prove it). We will all die, sooner or later. Sooner, if we neglect most of what we’ve learned over the years (eat healthy food, do your daily exercises, get enough sleep, and so on), or ignore the signs (overweight, sleeplessness, concentration problems, and so on). These signs are all part of a feedback loop mechanism.

To cope with life’s challenges, we must adapt to the given circumstances and conditions. But we can’t react if we fail to sense and process what is going on around us. When we find ourselves in unknown territory, all of our sensors are on full alert to pick up on ques and process feedback quickly to adapt to the circumstances in the best way possible. That’s why it can be exhausting to be in a room full of strangers: your brain is processing millions of micro-moments to detect any anomaly, preparing your body to respond (fight, flight, or freeze).

These so-called sensory feedback loops help us survive and thrive as individuals or species. For instance, plants adapt to climate change by passing on genes that allow sprouts to cope with the new conditions better.

We find similar feedback loop mechanisms in business: HR uses employee reviews to access past performances. Marketing uses focus groups to monitor responses to new products. The production uses quality control to check whether the production flow is up to standard.

Feedback loops are simple to understand: you produce something, measure information on the production, and use that information to improve production. Around it goes—a constant cycle of monitoring and improvement. To stay healthy, every aspect of a business needs feedback loops. If a company isn’t measuring data on its work, how can it improve? Customers, employees, teams, departments, production areas, and nearly everything else should contain feedback loops.

The pattern is always the same:

ROUNDMAP_Feedback_Loops_Copyright_Protected_2022

And yet, given all the evidence, most businesses fail to capture, process, and synthesize invaluable feedback from their customers and employees. This is a critical missing link in trying to achieve sustained business growth.

Continuous and across-the-board Lifecycle Management and Integral Change Leadership, as facilitated by ROUNDMAP™, aims to resolve the negative impact of mental, functional, and data silo. For instance, by introducing Change Circles™ while emphasizing employee and customer engagement’s critical role in propelling effective feedback loops to drive continuous strategy and product improvements, innovations, and adaptations.

Customer Success Agents and Customer Communities are some of the conduits to capture the slightest changes in competitive offerings and the customer’s job-to-be-done, allowing the firm to create added value to fulfill emerging demand, even before a customer is aware of it.

In ROUNDMAP, we refer to the opportunity of creating future value as Significance. While Relevance is about fulfilling an actual need, Significance is about fulfilling the customer’s needs in the future. And it is because of this ‘future value’, customers want to build a long-term relationship with you!

There is a ton of ways to capture feedback from customers, allowing you to improve your products and services or develop entirely new ones:

  • Customer Interviews
  • Customer Surveys
  • Customer Support Feedback
  • Customer Metrics
  • Customer Success Feedback
  • Feedback Forums
  • Sales Feedback
  • Employee Listening/Dialogues
  • Social Media Listening
  • Churn Surveys
  • Card Abandonment Feedback
  • Customer Communities

The point is that effective feedback loops enable you to plan most effectively for the future: By creating a self-learning, creative ‘powerhouse’ that delivers value that customers desire and want to come back for.

Unfortunately, according to Sachin Rekhi, founder and CEO of Notejoy, a mere 10% of institutional knowledge makes it to a centralized place. Almost 90% of captured feedback gets stuck with individual employees or small teams. To make sure feedback gets ‘fed back’ into the right system, it needs to become a feedback stream (compare: value stream). And we’ll need a feedback system of record, providing a single source of truth for all our aggregated customer feedback. And finally, we’ll need to consider the feedback we’ve received, group it, and make it count.

Brightline wrote on HBR: “No strategy exists in a vacuum. As strategies move from design to implementation, outside forces are continually changing. [..] But looking outward and adjusting to constantly changing conditions while pushing a new strategy through the organization can be a huge challenge. In a new global survey by the Economist Intelligence Unit (EIU), supported by the Brightline Initiative, more than half of the 500 companies surveyed said that competitor and customer changes greatly impeded delivery of their most recent major strategy.”

Prabhakar Ghatage, general manager of the Strategy Practice in the Tata Business Excellence Group, adds: “The business environment is very fluid. Reference points change. New issues emerge that need to be addressed, and old ones, on which the strategy was built, are not a priority anymore.” While “the challenge comes in understanding just how to use the new information effectively in implementation: just one in five companies said that it has effective feedback loops that use all this information in strategy delivery.”

The right approach can be seen as:

ROUNDMAP_Effective_Feedback_Loops_Copyright_Protected_2022

The feedback loop is .. a loop. It is a circular motion. Not a linear one. When done right, feedback loops drive a lifelong learning process, improvements, and adaptations. Or better yet, it is the main driver for our companies to evolve. For this, we need a continuous feedback loop.

From Linear Thinking to Circular Thinking

To transition a workforce from a linear (fixed) mindset to a circular (growth) mindset isn’t an easy task by any means or measure. It requires change but that’s another discussion.

I believe we’re on the verge of large-scale social innovation. We’re moving away from an era of high-profit, low-value industrial automation, ‘sponsored’ by low-wage workers doing repetitive tasks. And moving to an age of unprecedented value creation, in which the opportunities of robotization, intelligent algorithms, and business process automation demand highly creative, innovative, and collaborative individuals.

Instead of competing on product and price, firms will be competing on personalized solutions and value.

Concerns over human health have already led to ‘The Great Resignation’; however, I believe this is merely an appetizer to what’s in store. After two years of Covid-19, people have changed their habits, and most don’t want to return to the ‘same old’. Being amidst family members on a daily basis while facing their vulnerability, many have changed their behavior, convictions, and beliefs and reconsidered the priorities they had given to the different roles in their lives.

It won’t be easy, if not impossible, to get the Gini back in the bottle. Those who won’t resign will want to keep some of the benefits of working remotely, while those who will may be on the lookout for employers that cater to their newly found liberties. Firms will need to watch out: losing more than 30% of the workforce can already be disastrous.

One of the misconceptions that I often hear is that leaders believe that ‘this does not concern us’. However, it will. Your direct customers may not be impacted, but the customers of your customers will. The domino effect of technological disruption and the aforementioned social innovation will have a profound impact on your portfolio and workforce!

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Edwin Korver

Edwin Korver

Architect of ROUNDMAP™ - Advancing Grandmastership of Business™ ✪ Business Model Matrix™ ✪ Polymath ✪ Generalist ✪ Systems Thinker ✪ Board Member, CEO CROSS-SILO BV

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