Illustration by Patrick Edwin Moran
Observe. Orient. Decide. Act. The OODA Loop is an effective decision-making model developed by the US military strategist, Colonel John Boyd.
Its driving force includes continuous feedback and observations. It enables late commitment—an important element of agility.
Boyd’s view was that decision-making occurs in an iterative cycle that means an individual or organisation can process the OODA cycle quickly, observing and reacting to unfolding events more rapidly, and hopefully more effectively than their opponent, therefore getting inside the opponent’s decision cycle and gaining the advantage.
The four-step OODA Loop process is about collecting pertinent information, recognising potential biases, making decisions then acting on them. Crucially, you then repeat the process as new information becomes available.
The connection between the military and business
Entrepreneurs and business owners are often faced with making decisions under pressure. Looking at techniques used to make rational decisions during extreme situations, like military conflict, can be helpful to adopt in a practical business context.
The huge amount of resources that military leaders and strategists invest in developing and testing decision-making processes, and their agility in refining processes that don’t work, gives us robust theories like the OODA Loop that we can trust when we apply them to business practices.
Rational thinking in chaotic situations
Business strategy and navigating business dealings can often be unpredictable.
To quote John Boyd:
“What is strategy? A mental tapestry of changing intentions for harmonising and focusing our efforts as a basis for realising some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests.”
The ‘Loop’ is key
The success of the OODA Loop relies on repetition until the challenge is resolved; each repetition provides more information to inform the next, which makes it a continuous feedback loop.
Here’s how it works:
Observe
You’re not only building the most accurate and comprehensive view of the situation, thinking about what’s affecting you and your opponent, what might impact you in the future, and how accurate your previous predictions were, you’re separating the wheat from the chaff, skilfully identifying what information is useful and what is irrelevant in the overall context.
Good decisions have to be made with your environment in mind. For a fighter pilot, a key element is weather conditions. For a business, key factors might be your resources, your relationships, and any regulations you have to conform to.
Orient
This part of the process is about seeing things as they really are, with minimal influence from cognitive biases, and recognising any barriers that might obstruct the OODA Loop.
“Orientation isn’t just a state you’re in; it’s a process. You’re always orienting.”
John Boyd
By not quickly jumping in but, instead, by carefully orienting before making a decision, you can overcome initial disadvantages to outsmart a competitor.
We need to overcome barriers like genetic heritage, cultural traditions, falling back on old habits if we’re not continually sharpening our analytical thinking skills, and the clutter of constantly changing situations.
As Boyd’s approach describes, it’s a “scheme of pulling things apart (analysis) and putting them back together (synthesis) in new combinations to find how apparently unrelated ideas and actions can be related to one another.”
Decide
At this point in the loop, you have what you need to make informed decisions. If there are multiple options, your observations and orientation should enable you to make your choice. Keep your mindset flexible and open. Think of your decision making stage as testing a hypothesis, looking for flaws and incorporating any issues at future observation stages.
Be careful not to be swayed by first-conclusion bias, and making the same decision over and over.
Act
Making a decision is redundant if you’re not going to act on that decision.
This is when you find out if you’ve made a good decision or not. Whatever the results are, your action will provide valuable information for the next iteration of the OODA Loop.
Stop going round in circles
The OODA Loop creates and maintains momentum, emphasising the value of speed and agility in taking the initiative and being decisive.
It also helps us to cope with uncertainty; no-one has a crystal ball and it’s impossible to know how things are going to turn out. This is why it’s easy to get stuck in the observation stage, going round and round, looking for more guidance and advice, scared to make a decision and take action in case we get it wrong.
However, by following the OODA Loop principle, we can include margin for error and mitigate uncertainty.
Another effective benefit of the OODA Loop is how its potential for you to make unpredictable changes in speed and direction can make it tricky for competitors to second guess your next move.
Making the OODA Loop work for you
If you adopt the OODA Loop in your business’s decision-making process, I believe you’ll experience a positive difference.
It will inevitably take time to practice and hone your skills, but I think you’ll be surprised what happens when you pause before jumping in, and how much detail and nuance you notice when you properly step back, observe and orient before making decisions and acting on them.
How I can help you to work with the OODA Loop principles
My comprehensive, detailed analysis of the strengths and weaknesses of your business, the RealityCheck®, was described by one of my clients as "an MRI scan for my business.”
The report I produce contains the ‘OOD’ part of the OODA Loop. The advice I give, and the actions my clients then take, completes the ‘A’ part of the Loop.
If you would like to talk about how I can help you to tackle challenging situations in your business, do get in touch, I’d love to hear from you!
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