Skip to content
Mike SilvaFeb 21, 2024 10:40:32 AM4 min read

What is a Feedback Loop? A Business Guide to Feedback Loop Communication

You may remember learning (or at least hearing about) feedback loops in science classes. It’s what maintains homeostasis in our bodies and regulates ecosystems to avoid collapse.

Feedback loop communication isn’t solely for biological occurrences, it’s also greatly useful for businesses, employee retention, and customer gain.

First and foremost, let’s define what feedback loop communication is so we can get you started on deciding how you can use it for your own gain.

What Is Feedback Loop Communication?

Feedback loop communication is a circuit that uses the output as part of its input. Let’s use your savings account as an example.

Imagine a ring. At the top of the ring is the monthly interest you gain on your savings. Circling around to the bottom of the ring is the addition of that interest to your current savings. Now that you have more money in your savings, circling back up to the top of the ring adds an even greater monthly interest to that savings. This continues on and on using the amount of money you have at the end of the month as in the input to calculate the amount of interest you earn for the next month.

This is a potentially never-ending loop (until you empty your bank account). Feedback loop communication can be broken down into two categories: positive and negative.

What Are Positive Feedback Loops?

The interest rate example from the previous section is a positive feedback loop. It seeks to amplify the input for constant growth.

Another example of positive feedback loop communication is working out. When you work out, you get a boost of endorphins that make you feel good, you use your good mood to be more productive during the day which you enjoy, so the next day you work out again.

Let’s not confuse the positive in positive feedback loop with something good. Positive in this case is more along the lines of promotion and addition. A bad positive feedback loop could be raising the price of a product which leads to less sales, which then forces you to raise the price of the product in an attempt to avoid going in the red.

If Positive Feedback Loops Can Be Negative, Then What’s a Negative Feedback Loop?

Negative feedback loop communication is an attempt to maintain stability by accepting a high output and seeking to reduce it.

That sounds confusing, but essentially it is the opposite of its positive counterpart. Instead of amplifying an input, it’s reducing it.

Bad customer reviews are a great example of a negative feedback review. Your business receives a negative review, so you use that customer’s feedback to modify the product. You’ve used the feedback as a way to reduce the input (being negative reviews) as a way to stabilize the product.

The OODA Feedback Loop Communication Method

As seen from the previous example, feedback loop communication is a great way to interact and gain trust with your customers which eventually leads to better sales. Feedback loop communication is also a great way to improve productivity in the workplace, and this is done mostly with the OODA method.

Most companies today provide perks like gym memberships or paid public transportation to their employees as a way to keep employees at 100% working potential. But it’s not the only way to improve productivity in the office.

OODA stands for Observe, Orient, Decide, and Act and is one of the best methods to follow for employee feedback loop communication.

Observe the good performance of your employees or ask them to observe the performance of their coworkers (privately). Add an anonymous tip or recommendations box somewhere in the office, give out your email as a way for employees to voice concerns (or praise), and let them know your door is open to one-on-one communication. This can also be referred to as information gathering.

Orient the details you’ve gathered, otherwise known as the analyzation process. Use the information to discover how your employees are working and what they’re thinking.

Decide what to do about the information you’ve gathered. If there are recurring events throughout your workforce, then formulate a way to tackle them head on. Or find a personal way to praise the workers who are doing a great job.

Act is the final step. This is where you face your workforce, praise them, tell them what needs to be improved, and address their needs and concerns. After this step, the process continues as both positive and negative feedback communication because it’s entirely dependent on the person and the situation.

Nrby is the communication platform that enables business to capture any feedback loop. Negative or positive feedback loops, customer or employee feedback loops, Nrby has a pre-configured workflows to digitize your businesses feedback loops quickly.

location intelligence platform