Positive Feedback Loops


Hi there! The subject of this week’s video blog is all about the compound interest of success.  Now I’m sure you’re aware of the compound interest of money where you put money in a bank account, you earn interest on that money, then that interest adds to the principal, and then you earn interest on that new amount.  So what happens over time is that sum of money starts to grow exponentially.  Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”  Well…what’s cool about compound interest is it doesn’t just apply to money, it applies to a lot of different areas in life.  And it’s due to something called positive feedback loops.  And it explains a lot about the world and the way it is.


What is a positive feedback loop?  Basically it’s a loop where a small change has a compounding effect.  So if you have money in a bank account, you earn interest on that…it comes round and it adds again and you earn interest on that new amount.  So it compounds and grows exponentially over time.


Well positive feedback loops don’t just apply to an investment account.  They apply to a lot of different things and a really strong example has a great deal of relevance for 360 degree feedback.


You can probably think back to when you were at senior school or high school and when you were in a sports team.  And there would have been one kid in that sports team who had a slight advantage and who was slightly better than everyone else in the sports team.  Well, that slight advantage at first would have just been small but what would happen very quickly is that the coach would favour that kid, would give him or her more attention during training, they would get preferred positions in the sports team, they would also get more game time, would get more support from the sidelines, and probably more support from their own team members.


So that small advantage just attracts more success, and over time that starts to compound.  As their team mates and their coach continually tell them that they’re really good, they start to believe they’re really good, start to play better and then that increase – that started off as a small advantage - just gets bigger and bigger, and it keeps compounding.  This is how superstar athletes get to where they are.  They start with a small advantage and then, due to positive feedback loops, it starts cascading, growing and compounding over time.  Can you see the relevance to using the 360 questionnaire to catch people doing things right, even the smallest things, and then using the feedback session to reinforce those things?  This is what we mean when we say ‘build on strengths’, or ‘strengths-based leadership’.


Careful though!  Here’s another, completely different example, of how positive feedback loops work, but not necessarily in a good way.  Imagine a pond with goldfish in it.  If there is one goldfish that has a slight size advantage over the other goldfish, just ever so slight…well that goldfish will be able to fight off other goldfish when they’re being fed food and she’ll be the leader in that pond, which will mean that she’ll have access to more food and over time she’ll grow exponentially.  Now this has been studied across a variety of animal species over the years, the results are in and we can clearly see that the one who has the slight size increase, after a few months she has a HUGE size increase.  Is that how bullying cultures get started, we wonder?


So why this is important is for you to realise that you only need a slight increase, a slight improvement, over the way you used to be for positive feedback loops to take effect.  So the message today is…instead of looking at everyone at the top and thinking “Gosh, they’re such a long way away from me”, just look at what you can do right now to get a slight improvement.  Because we can tell you that positive feedback loops will distort that improvement that you have over time and you will start to earn compound interest on your own success!


Please post a comment and tell me what you think of the vlog and feel free to ask any questions.  I’ll be answering questions and reviewing comments personally.


Thank you for watching.


Colin Newbold