In our lives, our work, and our finances, we are surrounded by data. We know how many likes our latest social media posts received. We know how our blood pressure reacts to a workout and how many steps we’ve taken during the day. We know how our work performance affects our income. And we can see how market movements affect our financial planning minute-by-minute.
But how often do we stop to think about how that data is cycling back and affecting our behaviors, in both positive and negative ways? And, just as importantly, how often do we use that data to make adjustments that can improve our Return on Life?
This ongoing cycle of input, output, and influence is called a feedback loop. Here’s how we can master the two different types of feedback loops to make better decisions and build better habits.
Positive Feedback Loops: Reinforcing What Does — and Doesn’t — Work
A positive feedback loop provides reinforcement or affirmation of an existing behavior. For example, you might bring a bottle of water with you wherever you go so that, when you’re thirsty, you take a drink of water from your bottle. You can use that bottle to keep track of how much water you’re drinking, and to avoid drinking unhealthy alternatives. Thirsty, drink, not thirsty, repeat.
Despite the name, positive feedback loops can reinforce both positive and negative behaviors. If you’re an older employee, you might find that you have trouble relating to and working with the new crop of Gen Z employees. As a result, you may avoid interacting with them during lunch breaks, or volunteering to work with them on team projects. This keeps you at a distance from your younger colleagues, which you might perceive as a positive outcome. But all you’re doing is reinforcing your discomfort. You could also, potentially, be harming your work performance and your chances of moving up in the company.
If a particular habit or behavior is good for you, think about ways you can grease the wheels of that feedback loop and keep the data trending in a positive direction. Exercise one more day every week so you gain a little more energy and endurance that will loop back into more exercise, and better health. Contribute 5% more to your savings and investments account every month so that your nest egg will compound and grow even more.
Negative Feedback Loops: Restore Balance That You’ve Lost
And if a habit is destabilizing part of your life? Stop reinforcing that habit and look for ways to achieve balance.
That’s where negative feedback loops come in. Instead of perpetuating and strengthening a behavior, these loops stop behaviors that could throw a system out of whack. A simple example: when you’re hot, your body sweats. This cools you off and helps to prevent overheating.
So, where could you use a little more balance?
If a sudden rush of negative customer service reviews is threatening your business’ bottom line, listen to that feedback and train your people on new protocols that will turn critics into superfans.
If you feel like you’re spending too much time at work, establish hard outs on your daily calendar. As you bump up against those new boundaries, you’ll stop scheduling an extra weekly meeting that stretches into dinner time and learn to leave your work computer off during family movie night.
And if you need help curbing your spending, boosting your investment contributions, and preparing financially for major life transitions?
Come visit our offices and let’s work through our suite of interactive Life-Centered Planning tools. Together, we’ll start putting together a comprehensive plan that will keep your life and your money in perfect sync.
