Using Fast Feedback
FF1: The Principle of Maximum Economic Influence: Focus control on project and process parameters with the highest economic influence.
Control measures that have the greatest impact on economic success. Use an economic framework to identify these parameters. For example, if a 10% increase in project expenses reduces profits by 1%, but a 10% increase in unit cost reduces profits by 50%, prioritize controlling unit cost over project expenses.
FF2: The Principle of Efficient Control: Control parameters that are both influential and efficient.
A parameter's strong economic influence does not guarantee efficient control. For instance, average sales price significantly impacts life cycle economics but is difficult to control directly. On the other hand, unit cost has a similar influence and is more manageable.
To identify effective control variables, find the intersection of economic influence and control efficiency. Conduct sensitivity analysis to determine which proxy variables have economic impact, then rank these variables based on their control efficiency to identify the most effective ones.
FF3: The Principle of Leading Indicators: Select control variables that predict future system behavior.
Leading indicators are valuable for efficient control because they enable early interventions, which are economically beneficial. As development progresses, intervention costs rise exponentially, while the value of acting early increases significantly. These combined effects make early interventions highly efficient.
For instance, a manager focused on monitoring task start times instead of completion times. He observed a strong correlation: when the right person started a task on time, it usually finished on schedule. Conversely, tasks that started late or with incorrect resources often finished late. By using start times as a leading indicator, he could intervene early—adjusting resources or priorities—before delays became costly.
However, these conditions—predictive leading indicators and the potential for impactful early interventions—may not always be present. When absent, the benefits of using leading indicators can diminish or even become counterproductive.
FF4: The Principle of Balanced Set Points: Set tripwires at points of equal economic impact.
FF5: The Moving Target Principle: Know when to pursue a dynamic goal.
Many companies create harmful control systems by failing to distinguish between static and dynamic goals. They assume that following the plan is always correct and any deviation is negative. In stable environments, like manufacturing, this can be true, where frameworks like Six Sigma prevent deviations to optimize efficiency.
However, in product development, goals constantly shift as better information emerges. Stable goals require preventing deviations and avoiding risk, while dynamic goals demand quick adjustments and reduced inertia to close the gap between the current state and the desired outcome.
Recognizing when your goals are dynamic or stable is crucial, especially in the highly variable world of product development. For example, in developing a new software feature, user feedback may shift priorities, requiring the team to pivot and adjust the goal to meet evolving customer needs.
FF6: The Exploitation Principle: Exploit unplanned economic opportunities.
FF7: The Queue Reduction Principle of Feedback: Fast feedback enables smaller queues.
Fast feedback loops not only provide insights more quickly but also reduce the need for work-in-process (WIP) in a system. By rapidly addressing variability, these loops allow processes to operate with smaller buffers, minimizing delays caused by excessive WIP. Smaller WIP, in turn, reduces overall system delays, enabling even faster feedback. This creates a positive feedback cycle: faster feedback reduces WIP, which lowers delays, further accelerating feedback and improving system efficiency. This principle highlights the compounding benefits of designing systems with rapid feedback mechanisms.
FF8: The Fast-Learning Principle: Use fast feedback to make learning faster and more efficient.
Fast feedback is essential for accelerating learning and making it more precise. It achieves this by shortening the time between cause and effect, reducing noise, and improving clarity in the results. Investing in environments that enhance feedback, like Team New Zealand's (they designed the yacht that won the America's Cup) use of two boats for direct comparison, allows for more cycles of testing and better insights in each iteration. This approach demonstrates that faster feedback not only provides quicker answers but also leads to more efficient and reliable learning processes.
FF6: The Exploitation Principle: Exploit unplanned economic opportunities.
FF10: The First Agility Principle: We don't need long planning horizons when we have a short turning radius.
In product development, agility is the ability to quickly shift focus or direction without needing to plan too far ahead. A smaller, more focused project is much easier to adapt than a large, rigid one. Just like turning a small object is easier than moving a massive one, agile teams can change direction quickly when they have fewer moving parts.
To maintain this agility, it's important to have enough resources ready to make these changes as soon as needed. Organizations operating at full capacity often struggle because they can't reallocate resources quickly enough. This delays response times and makes it harder to shift direction.
When teams are set up to pivot quickly—by working on manageable projects and keeping resources flexible—they can move faster and more confidently, even in uncertain environments. This short "turning radius" means you don't need to plan everything in detail far into the future, because you can make quick adjustments as new information emerges. This approach reduces the complexity of managing changes and allows teams to operate at a higher speed without losing control.
FF11: The Batch Size Principle of Feedback: Small batches yield fast feedback.
FF12: The Signal to Noise Principle: To detect a smaller signal, reduce the noise.
FF13: The Second Decision Rule Principle: Control the economic logic behind a decision, not the entire decision.
FF14: The Locality Principle of Feedback: Whenever possible, make feedback local.
FF15: The Relief Valve Principle: Have a clear, predetermined relief valve.
FF16: The Principle of Multiple Control Loops: Embed fast control loops inside slow loops.
FF17: The Principle of Controlled Excursions: Keep deviations within the control range.
FF18: The Feedforward Principle: Provide advance notice of heavy arrival rates to minimize queues.
FF19: The Principle of Colocation: Colocation improves almost all aspects of communication.
Colocation accelerates feedback by fostering real-time, face-to-face communication, which is more efficient and includes both verbal and nonverbal cues (the principle B17: The Proximity Principle discussed the value of physical proximity). It reduces communication costs, enabling frequent, small-batch interactions and immediate issue resolution. Beyond speed, colocation strengthens team cohesion through informal, non-task-related interactions, helping team members see each other as complex individuals and reducing negative biases. This leads to more cohesive and effective teams. Despite its proven benefits, colocation remains underutilized, but it is one of the simplest and most impactful ways to boost team performance and development speed.
Scope: human-to-human communication. What people decide this way reaches agents only once written; see The Corollary of Contextual Readiness.