OODA
Loops
Understanding the Decision Cycle
Has it ever struck you just how many military terms have become
everyday terms in business-speak? As well as "fighting off threats"
or "engaging in a price war," we talk about "gathering
intelligence," "making a pre-emptive strike," and even trying to
"out-maneuver" the competition.
War and business are often compared and contrasted. And it's fun
to read books like The Art of War, written in 6th Century China by Sun Tzu, and
to think about how these can be applied to business strategy!
So, when former US Air Force Colonel John Boyd developed his
model for decision-making in air combat, its potential application to business
soon became apparent.
Boyd developed his model after analyzing the success of the
American F-86 fighter plane compared with that of the Soviet MIG-15. Although
the MIG could climb and turn better, the American plane won more battles
because, according to Boyd, the pilot's field of vision was far superior.
This improved field of vision gave the pilot a clear competitive
advantage, as it meant he could assess the situation better and faster than his
opponent. As a result, he could out-maneuver the enemy pilot, who would be put
off-balance, wouldn't know what to expect, and would start making mistakes.
Success in business often comes from being one step ahead of the
competition and, at the same time, being prepared to react to what they do.
With global, real-time communication, ongoing rapid improvements in information
technology, and economic turbulence, we all need to keep updating and revising
our strategies to keep pace with a changing environment.
See the similarities with Boyd's observations? Brought together
in his model, they can hold a useful lesson for modern business.
This tool is very important not only in business but our daily
lives. It helps us become better at decisions in our daily life. It is a
logical process to follow so you gather the right information to make a good
decision for anything. It is slow at 1st untill you get the hang of it and
becomes imbedded in your thought processes and then like the fighter pilots it
becomes "real time" fast but
it takes work and thoughtful practice.If one of your weak areas involves poor
and or slow decision making ,then this is a practical tool to change that into a
strength.
Understanding the Tool
Called the OODA Loop, the model outlines a four-point decision
loop that supports quick, effective and proactive decision-making. The four
stages are:
1.
Observe – collect current information from as many sources as
practically possible.
2.
Orient – analyze this information, and use it to update your
current reality.
3.
Decide – determine a course of action.
4.
Act – follow
through on your decision.
You continue to cycle through the OODA Loop (see figure 1,
below) by observing the results of your actions, seeing whether you've achieved
the results you intended, reviewing and revising your initial decision, and
moving to your next action.
Figure 1 – The OODA Loop Sequence
Observing and orienting correctly are key to a successful
decision. If these steps are flawed, they'll lead you to a flawed decision, and
a flawed subsequent action. So while speed is important, so too is improving
your analytical skills and being able to see what's really happening.
.
Let's look more closely at what each stage involves:
Stage 1: Observe
At this initial point in the loop, you should be on the look-out
for new information, and need to be aware of unfolding circumstances. The more
information you can take in here, the more accurate your perception will be.
Like an F-86 pilot with a wide field of vision, you want to capture as much
incoming data as possible. The kind of questions you need to be asking are:
·
What's happening in the environment
that directly affects me?
·
What's happening that indirectly
affects me?
·
What's happening that may have residual
affects later on?
·
Were my predictions accurate?
·
Are there any areas where prediction
and reality differ significantly?
Stage 2: Orient
One of the main problems with decision-making comes at the
Orient stage: we all view events in a way that's filtered through our own
experiences and perceptions. Boyd identified five main influences:
·
Cultural traditions.
·
Genetic heritage.
·
The ability to analyze and
synthesize.
·
Previous experience.
·
New information coming in.
Orientation is essentially how you interpret a situation. This
then leads directly to your decision.
The argument here is that by becoming more aware of your
perceptions, and by speeding up your ability to orient to reality, you can move
through the decision loop quickly and effectively. The quicker you understand
what's going on, the better. And if you can make sense of the situation and the
environment around you faster than your competition, you'll have an advantage.
And it's important to remember that you're constantly
re-orienting. As new information comes in at the Observe stage, you need to
process it quickly and revise your orientation accordingly.
Stage 3: Decide
Decisions are really your best guesses, based on the
observations you've made and the orientation you're using. As such, they should
be considered to be fluid works-in-progress. As you keep on cycling through the
OODA Loop, and new suggestions keep arriving, these can trigger changes to your
decisions and subsequent actions – essentially, you're learning as you continue
to cycle through the steps. The results of your learning are brought in during
the Orient phase, which in turn influences the rest of the decision making
process.
Stage 4: Act
The Act stage is where you implement your decision. You then
cycle back to the Observe stage, as you judge the effects of your action. This
is where actions influence the rest of the cycle, and it's important to keep
learning from what you, and your opponents, are doing.
Using the Model
The OODA Loop isn't meant to be a static, linear "do this,
then this, then this" type model: it needs to be a smoother, more
continual process. With this approach, the faster you can move through each
stage the better. In fact, if you were to sit down and map out each step, your
decisions would likely slow down instead of speed up.
The goal of the model is to increase the speed with which you
orient and reorient based on new information coming in. You want to be able to
make a smooth and direct transition between what you observe, how you interpret
it, and what you do about it.
When you make these transitions rapidly, you're in a position to
be proactive, and you can take advantage of opportunities your competition
isn't even aware of yet. Boyd calls this "operating within your opponent's
OODA Loop." Here, your competitor is moving too slowly and simply reacting
to environmental changes. By contrast, you're working on the offensive, making
strikes and forcing them to react to you.
Tip:
Be careful with this emphasis on speed. In some situations, you genuinely need it. In others, a more cautious, deliberate approach is appropriate. This is likely to be affected by things like the length of product cycle times, the rate of change in your industry, and the consequences of a poor decision.
Be careful with this emphasis on speed. In some situations, you genuinely need it. In others, a more cautious, deliberate approach is appropriate. This is likely to be affected by things like the length of product cycle times, the rate of change in your industry, and the consequences of a poor decision.
Key Points
Whether it's looking out for the next
big opportunity, making a move before your competitors do, or assessing the
current state of affairs, you often need to be sharp-sighted and decisive. The
OODA Loop gives you a great way to maintain this vigilance, and be proactive in
a rapidly changing world.
By using the OODA Loop, you can be
nimble in your decision-making, and make changes to your decisions and strategy
quickly and decisivel
http://youtu.be/JIVWM0ldJ6w. Have a look at this video and apply the steps to your daily desicion making. It is very practical tool in all desicion processes, not just business and warfare.