Showing posts with the label feedback loop

The Accuracy of Developing Feedback Loops in Strategy

In strategy, it is necessary to develop not only the action but also the feedback loop to ensure effectiveness. Research by Newell, et. al (2013) using dice rolls indicates that top-down strategies are quickly developed while the changing of poor strategic choices through bottom-up discoveries in feedback is much slower. It helps decision makers understand they may be quick to accept optimizing strategies but slow in adjusting course once those strategies are enacted. An unyielding strategy could potentially lead to poor results. People often use probability matching when determining a strategy which is based on the probability of outcome.   In essence, if people believe they will have a payoff 70% of the time they are likely to choose that option 70% of the time even it could be chosen 100% of the time for more effectiveness. Optimization requires the ability to understand the factors within the game. When people are provided feedback of outcomes it is believed they wou