UNDERSTANDING THE DECISION CYCLE
Decisions without actions are pointless. Actions without decisions are reckless.” – John Boyd
In my last blog, I described the OODA Loop and tried to explain how it can be used in combat. I also mentioned that it is considered a problem-solving process or decision-making model. Have you ever noticed how many military terms have become standard in business-speak?
War and business are often compared and contrasted. As well as “engaging in a price war,” we talk about “gathering intelligence,” “making a preemptive strike,” and even trying to “out-maneuver” the competition.
Reading books like The Art of War, written over 2500 years ago by the Chinese General and Philosopher Sun Tzu, and to think how these ideas can be applied to the business strategy can be fun. So, when former US Air Force Colonel John Boyd developed his model for decision-making in air combat, its potential application in business soon became apparent.
Boyd developed his model after analyzing the success of the American F-86 fighter compared with that of the Soviet MIG-15. Although the MIG was faster and could 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 advantage, which meant he could assess the situation better and faster than his opponent. As a result, he could out-maneuver the enemy pilot, who wouldn’t know what to expect, and would start making guesses and inevitably make mistakes.
Business success 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 communications, ongoing, rapid improvements in information technology, economic turbulence, and supply chain issues, we need to keep updating and revising strategies to keep pace with an ever-changing environment. Boyd’s observations can hold useful lessons for modern businesses.
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:
You continue to cycle through the OODA Loop by observing the results of your actions, seeing whether you’re achieving the results you intended, reviewing and revising your initial decision, and moving to your following action.
Observation and orienting correctly are key to a successful decision. If flawed, this leads to flawed decisions and flawed actions. While speed is essential, improving your analytical skills and seeing what is happening is vital. The OODA Loop model has closely related to the Plan Do Check Act model. Both highlight the importance of accurately analyzing a situation, checking that your actions have the intended results, and making changes as needed.
Each OODA Loop stage presents questions and specific things you should be familiar with. Here are what each stage involves:
Observe – This initial point in the loop requires you to look for new information and unfolding circumstances. The more information you can take in here. The more accurate your perception will be. The kinds of questions you need to be asking here are:
Orient – This is the stage that presents the most significant challenge. We all view events in ways filtered through our experiences and perceptions. Boyd identified five main influences:
Orient is essentially how you interpret a situation. This leads directly to your decision. As you become more aware of your perceptions, you move through the loop quickly by speeding up your ability to orient to reality. The quicker you understand what’s going on, the better. Remember, you are constantly re-oriented. As new information comes in at the Observe stage, you must process it quickly and revise your orientation accordingly.
Decide – this is your best guess based on your observations and the orientation you use. They should be considered fluid works in progress. As you move through the decision loop, new suggestions keep arriving; these can trigger changes to your decisions and subsequent actions – essentially learning as you go through the cycle. The results of your learning are incorporated into the orient stage, which then influences the rest of the decision-making process.
Act – This is where you implement your decision. You then cycle back to the Observation stage, as you judge the effects of your action. This is where actions influence the rest of the cycle, and it’s essential to keep learning from what you, and your opponent, are doing.
The critical point here is to use the OODA Loop to help you when you see the big ample opportunity, move before your competitors, or assess the current state of affairs, allowing you to be sharp-sighted and decisive. Operating inside your competitor’s OODA Loop will enable you to make your decisions and make changes to your strategy quickly and decisively.