Virtuous Cycles in Organizations – A Review

Many leaders of business and industry have recently begun to adopt a “virtuous cycle” or “virtuous circle” strategy for their business process re-engineering. This report surveys various approaches to virtuous circles and cycles through published diagrams and images exemplifying the strategy in various domains.

Though the web is full of examples of the application of the virtuous circle/cycle approach in various organizations, a researcher in this area must be persistent, as some of the first results of searches for the terms “virtuous circle” and “virtual cycle” are not particularly relevant.

However, digging beyond initial search results reveals many practitioners of the virtuous circle or cycle approach. Some are straightforward:

Others provide more detail:

Applying a virtuous circle approach within an organization can be easy – there are even templates available in widely-used office tools. You can simply fill in the blanks and be done your business strategy development before lunch.

However, there are some precautions that should be heeded. First, it’s important to note that there are both virtuous and vicious circles, and you want to make sure you are on the one and not the other:

Second, it’s particularly important to ensure that an organization’s virtuous circle isn’t instead a death spiral – this can cause problems down the road:

Fortunately, business experts have developed some approaches to dealing with a death spiral should you unexpectedly find yourself having to deal with one.

Though the virtuous circle strategy has become widespread, not all practitioners of the approach seem to have mastered the concept, so you need to be careful when consulting existing practice. For example, some organizations have virtuous circles that aren’t really circles:

While others have virtuous cycles that aren’t cycles:

Some applications are problematic from the start. (Though the author isn’t a mechanical engineer, he feels pretty sure that he knows what won’t happen when you put 3 gears together like this.)

Others seem to fall quite wide of the mark. (Most would consider the Tower of Babel to be more an example of a death spiral than a virtuous circle).

So despite the availability of templates and examples, it takes some diligence to correctly and effectively apply the virtuous circle approach. Luckily, there are even virtuous circles that have been developed to help “boost confidence” during the development of your own virtuous circle strategy.