The Forgotten OODA Loop: It’s An Amazing Military Decision Framework And Awesome Gift To Business

In a world that’s increasingly real-time, volatile, uncertain, and complex, businesses and military operations alike search for strategies that can not only withstand such conditions but also thrive within them. One such strategy, birthed from the crucible of aerial combat and refined by military strategists, is the OODA Loop: Observe, Orient, Decide, Act. This decision-making framework, despite its origins in the military, offers profound insights and advantages when applied to today’s real-time business environment.

In this article, I’ll explore how this tactical gem can be a game-changer in the data-driven landscape of modern commerce. Specifically, I’ll explain its applicability to today’s business in terms of the need for agility in operating in a real-time environment and 8 ingenious OODA Loop concepts for businesses. Lastly, I’ll highlight the pros and cons of this unique decision framework for businesses. Then you can decide if this is right for your business as a way to stay ahead of the competition.

1. OODA Loop Decision Framework: Is This Forgotten Military Tactic Applicable to Today’s Information-Rich Business Environments?

The OODA Loop, with its four-step cycle of Observe, Orient, Decide, and Act, was originally devised by the jet fighter pilot, John Boyd. He was a military strategist who developed this decision framework to gain the upper hand in dogfights.

However, its relevance extends far beyond aerial combat. Indeed, it offers businesses a robust framework for making swift, informed decisions using today’s data-driven technology. Further, the OODA Loop’s iterative process provides businesses with a superior decision framework that leverages information-rich environments. In the following paragraphs, I’ll highlight the OODA Loop decision framework unique characteristics that are applicable to today’s business. Namely, OODA Loop’s key characteristics are agility and operating in real-time. Additionally, I’ll provide you an example of how a business can go through the OOAD Loop of Observe, Orient, Decide, and Act.

a. Agile Decision-Making That Best Harnesses High-Speed Technology. 

Jet fighters in the past as well as today’s tech-smart business leaders both rely on cutting-edge tech and operate in a highly competitive environment. Also, both jet aircraft and computer tech are powerful and much faster than their older counterparts. So, it was in this context that the jet fighter pilot, Colonel Boyd, came up with the OODA Loop concept. His focus was to help pilots make the most of their new jet airplanes. This new tactical decision framework centered on creating agility and using the speed of new tech to win. 

Similarly, companies now use high-speed, information-rich tech to meet their goals. Thus, the OODA Loop decision framework holds great promise for today’s businesses success. Indeed, it is an approach for businesses to use agility to effectively harness high-speed technologies in information-rich environments.

b. Decision-Making That Best Operates in Real-Time Versus Discrete Time-Frames. 

With the advent of jet aircraft, pilots had to both plan and act in real-time. There was no time to have a set-piece battle plan that was executed in phases as in times before jet aircraft. Similarly, businesses are now increasingly planning and executing in a real-time environment. Now with high-speed computers, global internet, and advanced AI-powered applications that can crunch data in real-time, businesses operate in real-time as well.

Indeed, businesses and their information systems are less and less operating in daily, bi-monthly, and quarterly cycles. To stay competitive, businesses are phasing out their discrete time-framed processes and technologies to operate in real-time. Further, both businesses and IT are accelerating their processes with such concepts as iterative development, just-in-time delivery, and lean processes to name a few. For a more detailed discussion of businesses that operate in real-time with agility using the OODA Loop, see Rémy Fannader’s article Business Agility & the OODA Loop.

c. A Business Example of Applying the OODA Loop Decision Framework. 

So, to get a better idea on how the OODA Loop Decision Framework can work for businesses, below is a high-level overview. This overview details each step a business would take within the OODA Loop cycle.

1. Observe. In this step, a business focuses on understanding their market. Here, they use multiple sources of data, keep an eye on trends, and analyze customer behavior. 
2. Orient. Next, the organization analyzes the information they have gathered in the first step. The intent in this step is to identify patterns and trends. This enables the business to focus on the most critical information and anomalies.
3. Decide. Here, business leaders make informed decisions. This includes considering multiple options, prioritizing decisions, involving the right stakeholders, and making decisions.
4. Act. In this step, the business executes decisions. As this is an organizational setting, business leaders need to communicate clearly, establish clear goals, and monitor progress.
5. Repeat. As this is an iterative process the OODA cycle repeats itself over and over again. Also with a business being an organization, these steps can occur simultaneously and at different levels of the organization. Lastly, business leaders set the tempo and velocity of this continuous OODA cycle. This is how competitive advantage is achieved. Obviously, speed needs to be balanced with the operational tempo to determine the best time to execute.

“Decisions without actions are pointless. Actions without decisions are reckless.”

John Boyd

For more examples of how business can use the OODA Loop decision framework, see Dale Larson III article, Stay Ahead with OODA Loop Strategy: Lessons for Business Leaders and The Decision Lab’s The OODA Loop.

2. Getting Inside the Competitor’s Decision Cycle And 7 Other Ingenious OODA Loop Concepts For Businesses.

A critical aspect of the OODA Loop is its application in outmaneuvering competitors by “getting inside” their decision cycle. Indeed by moving through the OODA steps more rapidly, businesses can observe and react to market changes swiftly, thereby disrupting the competitor’s ability to respond effectively. So, this principle, when coupled with other OODA concepts such as implicit guidance and control, allows for a fluid, dynamic approach to competition. It’s not just about being fast; it’s about being appropriately aligned with the unfolding situation to gain a strategic advantage. Hence the OODA Loop is a formidable tool in the business arsenal.

Below are 8 ingenious OODA Loop concepts that are applicable to today’s businesses with their rapidly changing technological and business landscape.  For a more detailed discussion of these OODA Loop Concepts, see my article, The Thrilling OODA Loop: The Way To Shatter Your Competitor’s Decision Cycle And More Breakthrough Concepts.

Eight OODA Loop Concepts

1. Orient: Examine the Information to Identify Anomalies, the Second Step of the OODA Loop.
2. Not Just Cold Calculations: The OODA Loop Considers Moral and Culture Factors As Well.
3. Fingerspitzengefühl: Intuitive Situational Awareness Based on Expertise, Experience, and Study.
4. Embrace Uncertainty: In the OODA Loop, Competitive Advantage Is Achieved By Staying Calm and Seeking Opportunities.
5. Retain Objectivity: Process information in Real-Time Striving to Sift Out Biases and False Assumptions.
6. Schwerpunkt – Your Intent: Retain a Primary Focus and Center of Effort.
7. Exploit Both Tempo and Velocity: Use It to Get Inside and Disrupt the Adversary’s Decision Cycle.
8. Nurture Continuous Feedback: Within the OODA Loop Learn, Train and Evolve.

This concept, while rooted in the art of warfare, extends its reach into the business arena and beyond, promising breakthrough insights for those daring enough to master its intricacies. Click here and I’ll explain 8 key operational concepts that are extremely applicable for businesses that embody this powerful military theory called the OODA Loop.

3. Pros and Cons for Businesses to Adopt an OODA Mindset For Exploiting Both Technology and Market Conditions.

So, the OODA Loop decision framework, though originally designed with fighter pilots in mind, offers great potential for businesses. For business leaders to decide if their companies should adopt these OODA Loop concepts, they will need to weigh the pros and cons. So, below is a list of both the pros and cons of businesses adopting an OODA mindset to achieve competitive advantage.

Businesses Adopting an OODA Loop Mindset

For a more detailed discussion of the pros and cons of businesses adopting an OODA mindset, see my article, The Military OODA Loop Process That Will Make For Better Business Decisions: Pros Vs Cons.

For more discussion on the business pros and cons of adopting the OODA Loop decision concept, see DecisionSkill’s COMPETITIVE DECISION-MAKING: USING THE OODA LOOP and miro’s What’s an OODA loop and how to use it?

Indeed, data-driven decision-making can now unlock countless business insights that were once hidden. Moreover, this approach empowers companies to react more precisely and swiftly to market shifts, customer tastes, competitor moves, and other outside influences. Click here to explore data science basics, the data-driven decision-making process, its benefits, and its challenges for improving business decision-making in the age of AI.

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