The best leaders have a knack for seeing the whole picture. This is called situational awareness. Indeed, they notice things others miss, which helps them make smarter choices. In the past, a superior situational awareness meant knowing your market and watching your competitors. But technology has changed everything. Today’s successful companies use AI and other tools not just to gather information to detect problems, but to spot opportunities before anyone else sees them. With this higher level of situational awareness, businesses win not because they’re bigger or stronger, but because they see what’s coming and act first.
In this article, I’ll first look at what situational awareness means for decision-makers, organization, and even AI in this high-tech world. Next, I’ll look at several examples of key military tenets forged from battle for achieving situational awareness. Indeed, these concepts are very applicable for businesses that operate in today’s rapidly changing digital environment. Lastly, I’ll explain the three ways that digital technology and AI can rapidly increase situational awareness in corporate decision-making. Namely, how tech enhances decision-makers ability to quickly perceive, comprehend, and predict.
1. Situational Awareness: What It Means For Decision-Makers, Organizations, and AI.

People have always needed to understand their surroundings to survive and thrive. Early humans relied on their senses and tribal knowledge. As we invented new tools—from books to computers—our ability to understand the world expanded dramatically. Today’s organizations have access to massive amounts of data and AI tools that help them spot patterns and opportunities their competitors might miss. But having more data isn’t enough. Smart companies need systems that can make sense of all this information and turn it into real insights. So, let’s first look at what situational awareness means to decision-makers, organizations, and even AI technology.
a. Situational Awareness Definition.
The term, Situational Awareness, can mean many things to different people and contexts. For the purposes of this article, I’ll use this definition.
“Situation awareness is the perception of the elements in the environment within a volume of time and space, the comprehension of their meaning, and the projection of their status in the near future.”
Mica R. Endsley
Along with Dr. Endsley’s definition of situational awareness above, she also developed a model of situational awareness. See diagram below.
b. Organizational Situational Awareness.
As information technology and its systems facilitate information sharing, it is important to understand that individual situational awareness is different from an organizational perspective. This is because everyone in an organization will have different degrees of situational awareness. Thus, each individual has a different perspective of the situation.
So within an organization, different team members need different levels of information. For instance, a small project team needs to be completely in sync—everyone should understand exactly what’s happening and why. But in larger companies, it’s more important that employees simply share a clear picture of the company’s goals and desired outcomes. The key is getting the right information to the right people at the right time. This is organizational situational awareness. When everyone understands their part in the bigger picture, the whole organization moves forward with a common purpose. For more information, see National Academies Press’ paper, Modeling Human and Organizational Behavior. Also, see Schwerpunkt: The Way Businesses Get Their People To Seize Opportunities, Shatter Competitors.
c. Situational Awareness Levels.
Also, it is important for businesses to know its level of situational awareness in terms of readiness to act within its environment. One proven way to measure this comes from Cooper’s Color Code – a tool that police departments have used for years. This simple system can help any organization assess how aware it really is. As an example of how businesses can determine their level of situational awareness, see below.
Cooper’s Color Code Chart: Situational Awareness from a Business Perspective

- White: Oblivious. Here the business is unprepared and unready to take action. Now, this level may be OK for individuals on vacation, but this level of awareness will most likely result in disaster for a business.
- Yellow: Aware. In this case, the organization is prepared, alert, and relaxed. This can be a good state for business in that they are prepared, and there is no perceived threat or imminent opportunity.
- Orange: Alert. At this level, the business is alert to probable danger and is ready to take action. Here, the business has to balance expending resources to remain alert versus not being ready for a threat or opportunity.
- Red: Engaged. For most businesses this is the normal level of awareness. They are in action mode focused on the emergency at hand. The danger with this level of awareness is that the business may be surprised by new or different threats.
- Black: Panic. Here, the organization is having a breakdown affecting their performance and their ability to assess the situation. Obviously, leaders need to take remedial action to get their business out of this panic mode.
By business leaders assessing their situational awareness level, they can allocate resources and give direction for their organization to obtain the optimal level of situational awareness. Obviously, no business should be at a level of situation awareness that is oblivious (White) or in panic mode (Black). For more information on Cooper’s Color Code, see Brad Spicer’s article, How to Improve Your Situational Awareness.
d. AI Situational Awareness: If AI Doesn’t Have Consciousness, Can It be Aware?
Yes, in this day and age it is important to distinguish between Artificial Intelligence having consciousness versus having awareness. Now, most, if not all, AI technologists will agree that AI does not have consciousness, but AI is aware. To explain, let’s look at the following definitions of consciousness.
“Human consciousness is the awareness and perception of the self and the environment. Specifically, it encompasses the ability to experience feelings, thoughts, and emotions.”
“Artificial consciousness is only the awareness and perception of a machine or a software program.”
So, AI tools have some degree of awareness based on their programming and their access to knowledge-based data. Also, they’re getting better at spotting patterns and making sense of complex situations—especially through machine learning (ML). When combined with Internet of Things (IoT) sensors and data analytics, these tools help organizations increase situational awareness more clearly than ever before.
At the same time, AI does not have consciousness. To illustrate, ask ChatGPT or any other sophisticated AI Large Language Model (LLM) about this. The AI will tell you it doesn’t have feelings or self-awareness. However, ChatGPT is aware because it can discuss complex topics and provide insights, but it’s not truly conscious. Think of it as a highly sophisticated tool rather than a sentient being. For more discussions on AI and consciousness, see eficode’s article, Consciousness, awareness, and the intellect of AI. Also, see Unvarnished Facts’ article, With Emerging AI Consciousness Comes The Peril Of AI Rights: Think It’s Time To Worry?
2. Examples from Military History of Where Superior Situational Awareness Determined Success or Failure.
Military history provides stark examples of how superior situational awareness can mean the difference between victory and defeat. In fact, there are several key military tenets and practices that were forged from battle for achieving situational awareness. Further, these concepts are still very applicable for businesses that operate in today’s rapidly changing digital environment. Below, are three examples from military history of superior situational awareness.
- Directed Telescope: Napoleon’s secret weapon for cutting through the fog of war.
- OODA (Observe, Orient, Decide, Action) Loop: A decision-making dramework that helps pilots make split-second decisions.
- Fingerspitzengefühl or “Finger Feeling”: An uncanny sense some leaders develop for how things are unfolding.
Indeed, these battle techniques aren’t just old military ideas gathering dust in history books. Without a doubt, business leaders can use these battle-tested methods to see through the fog of today’s digital world. For a more detailed discussion, see Unvarnished Facts’ article, Battlefield Situational Awareness: Awesome Military Principles That Can Now Empower Victory For Today’s Businesses.
3. The Three Ways Technology Increases Awareness in Corporate Decision-Making: Perceiving, Comprehending, and Predicting.
Think of corporate decision-making like driving a car at night. In the past, executives had to navigate with dim headlights, making choices based on gut feelings and limited information. But today’s technology acts like a suite of advanced sensors – helping leaders spot dangers ahead, understand road conditions, and plan the best route forward. This shift has transformed business from a game of intuition to one of informed insight, where companies can see clearly in all directions and make choices with unprecedented clarity. Below, I’ll look at how today’s information technology can increase an organization’s situational awareness. Namely, how tech enables organizations to better perceive, comprehend, and predict.
a. Perceive: Use Descriptive Analytics, IoT, and Knowledge Tools to Access Key Information to Uncover Trends, Risks, Opportunities, and Anomalies.
Modern businesses swim in a sea of data, but the real magic happens when they learn to filter the signals from the noise. With today’s technology, smart sensors track cargo temperatures, AI-powered cameras monitor production lines, and sophisticated analytics tools sift through millions of customer interactions. Take Netflix – their systems track not just what shows you watch, but when you pause, rewind, or give up. This rich web of information helps them spot viewing patterns they never knew existed, catch potential service issues before they explode, and identify promising new content opportunities while they’re still just glimmers on the horizon.
For more information on how modern business perception can work within a decision-making framework, see SC Tech Insights’ article, OODA – Enabling Business Agility: The Best Way To Disrupt Competitors, Seize Opportunities, And Overcome Obstacles. Also, for types of information technology that can facilitate perception and improve situational awareness, see these tech links: Knowledge Graphs, IoT.
“The best hiding spots are not the most hidden; they’re merely the least searched.”
Chris Pavone
b. Comprehend: Use Diagnostic Analytics to Understand the Root Cause of Why Things Are Happening
Descriptive Analytics such as Business Intelligence (BI) dashboards can tell you what happened, but it does not necessarily help with comprehending why something is happening. This is where diagnostic analytics comes in. It can reveal why it happened. So, when sales drop in a specific region, modern diagnostic tools can pinpoint whether it’s due to a competitor’s promotion, changing weather patterns, or shifts in local demographics. Companies like Amazon use this deeper understanding to solve complex puzzles – like why some products face frequent delivery delays. By diving into weather data, traffic patterns, and warehouse operations, they can trace problems to their source and fix the real issues, not just the symptoms.
Thus, this second level of situational awareness enables businesses to comprehend relevant information that can affect a business. Specifically, businesses use diagnostic analytics to leverage their knowledge and analytical skills to determine the root cause of why things are happening. For more on diagnostics analytics, see SC Tech Insights’ article, Diagnostic Analytics For Agile Decision-Making: The Best Way For Businesses To Quickly Research Why Things Happened.
c. Predict: Use Predictive Analytics and AI to Forecast Future Events and Probable Outcomes
The holy grail of situational awareness isn’t just knowing what happened yesterday – it’s seeing what’s likely to happen tomorrow. Modern AI and predictive tools turn historical patterns into future insights. For instance, Target famously predicted customer pregnancies based on subtle changes in shopping habits, while weather companies can now forecast storms days in advance with remarkable accuracy. These predictions aren’t just party tricks – they help businesses stock the right inventory, staff the right number of people, and invest in the right opportunities at exactly the right time. It’s like having a business crystal ball, backed by data instead of magic.
So, the final piece of situational awareness is prediction—using what you know to figure out what might happen next. Today’s technology makes this easier than ever. Even small businesses can now use powerful tools to spot trends and predict outcomes. AI and modern computing help companies make smarter guesses about the future, turning raw data into practical insights about what’s coming next. For more details on the technical aspects of predictive analytics, see SC Tech Insights’ article, Predictive Analytics Types.
Conclusion.
So in this article, we first looked at what situational awareness means for decision-makers, organization, and even AI in this high-tech world. Also, we saw how military principles about situational awareness apply directly to today’s businesses and their rapidly changing digital environment. Lastly, we looked at three ways technology enhances decision-makers ability to quickly perceive, comprehend, and predict. . Indeed with superior situational awareness, businesses win not because they’re bigger or stronger, but because they see what’s coming and act first.
More References.
- Jim Santana’s article, Situational Awareness, Intelligence Analysis, and AI-Powered Decision Support Systems
- CQ Net’s article, Situational awareness: What it is and why it matters as a management tool
- Stanton, N. A.; Chambers, P. R. G. & Piggott, J. paper on Situational Awareness and Safety
- SC Tech Insights’ article, Emerging Tech For Supply Chain Visibility: The Best Innovations Available Now To Empower Businesses
For more from Unvarnished Facts, see the latest articles on decision-making, learning, and conflict.
Writer and advisor in supply chain technology and operational analytics. Passionate about giving actionable insights on information technology, business, innovation, creativity, and life in general.