You Aren't Learning If You Don't Close the Loops

You Aren't Learning If You Don't Close the Loops

In the world of business execution, it is crucial to have a disciplined approach to ensure that activities are completed and learnings are harvested. One concept that encapsulates this idea is the PDSA loop, also known as the PDCA or Deming cycle. This loop, developed by American engineer and quality control pioneer W. Edwards Deming, emphasizes the importance of planning, doing, studying, and acting in a cyclical manner.

Looking back on my operating career, I realize that many of the companies I have been involved in lacked the discipline to close the execution loops. It is easy to get distracted during the study and act phases, which often leads to incomplete projects and wasted efforts. Sometimes, the allure of something new and shiny draws us away from our current tasks. We abandon ongoing projects to chase after the next big thing, only to create a graveyard of half-finished execution loops.

Interestingly, this concept of closing the loops interacts with the sunk cost fallacy in peculiar ways. The sunk cost fallacy suggests that we should not consider the costs we have already incurred when making decisions. However, in the real world of business, it is not always easy to accurately predict payoffs and outcomes, making it challenging to completely disregard sunk costs.

One of the significant benefits of implementing the PDSA loop or other forms of scientific problem-solving is the development of critical thinking skills. Companies like Toyota and other lean manufacturing organizations believe that an engaged workforce that embraces problem-solving and critical thinking is better equipped to innovate and stay ahead of the competition. By rigorously solving problems and continuously iterating through the PDSA cycle, these companies foster a culture of innovation and improvement.

When we examine the Deming cycle closely, we realize that it essentially applies the scientific method to business. Just as scientists form hypotheses, conduct experiments, analyze data, and draw conclusions, businesses can benefit from this systematic approach to problem-solving. However, there is no secret trick to applying the PDSA cycle effectively. The challenge lies in getting organizations to commit to closing the loops they start.

To ensure that you are learning and making progress in your business endeavors, here are three actionable pieces of advice:

1. Embrace Discipline: Recognize the importance of discipline in executing projects. Stay committed to completing the loop and avoid getting distracted by shiny new opportunities. Focus on the task at hand and see it through to the end.

2. Harvest Learnings: Take the time to reflect on completed projects and extract valuable insights. Actively study the outcomes and identify lessons learned. By harvesting these learnings, you can avoid repeating past mistakes and improve future endeavors.

3. Foster a Culture of Critical Thinking: Encourage your organization to embrace critical thinking and problem-solving. Create an environment where employees feel empowered to propose and test hypotheses, analyze data, and make informed decisions. By incorporating the PDSA cycle into your company's culture, you can drive innovation and stay ahead of the competition.

In conclusion, closing the loops in business execution is essential for learning and progress. The PDSA loop provides a systematic approach to problem-solving and fosters a culture of innovation. By embracing discipline, harvesting learnings, and fostering a culture of critical thinking, you can ensure that your organization effectively closes the loops it starts, leading to continued growth and success.