Decision Making with OODA Loops

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 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 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.

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 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

Source: www.mindtools.com

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