The OODA Loop Explained

March 6, 2019

This is the OODA loop — a military methodology for decision-making with applications far beyond the battlefield.

“Victorious warriors win first and then go to war,” the military strategist Sun Tzu advises, “while defeated warriors go to war first and then seek to win.” This maxim, written over two thousand years ago, essentially argues that success is a matter of sober planning and strategic initiative. In other words, victory — whether on the battlefield or in the marketplace — depends on clear-cut insights, tactical thinking, and confident organization before any action is taken.

For commanders in the field or CEOs in the enterprise, assessing developing situations and leveraging data to formulate strategy are crucial steps to the decision-making process whether engaging the enemy or competing in the private marketplace. Originally conceived for the fast-paced world of air-to-air combat, the OODA loop mirrors Sun Tzu’s thinking while accounting for the ability of current technology to inform decision-making in real-time. The series of steps that make up the OODA loop — discussed further below — prize situational awareness and reward informed decision-making in evolving scenarios.

From military brass to the corporate C-Suite, the OODA loop can serve as an essential paradigm for operational stakeholders. As technology condenses traditional decision-making timelines, it’s vital that stakeholders have clear-cut plans in place to make the best decisions in the shortest amount of time — and with the most reliable information possible.


What is the OODA Loop?

The OODA loop is a way of thinking about the decision-making process. Broken down, the OODA loop stands for four distinct yet interrelated, smaller loops: observe, orient, decide, and act. The OODA loop encourages decision-makers to think critically, anticipate threats, and neutralize them before they become critical. In practice, organizations use the OODA loop to benchmark their ability to react, with the attendant goal of continuously improving (shortening/quickening) their decision cycles.

In following the OODA loop, stakeholders observe developing scenarios, orient themselves to assume a strategic footing, decide on the best course of action to take advantage of that strategic footing, and act to assume command of the situation. While this process seems like a linear one, it relies on constant feedback from a wealth of data points in order to update each step for the benefit of subsequent steps.


The Four Steps of the OODA Loop

1. Observe

This is the data collection phase — here, decision-makers are trying to ingest all the information they can. They aren’t thinking about how to prioritize it or what to do with it yet — they’re just aggregating what’s available.

2. Orient

During the orientation phase, the data is crunched, so to speak. Raw statistics are leveraged into insights. Information is analyzed, evaluated, and prioritized. The fundamentals of the situation — threats, opportunities, competitors, partners, all are sized up and duly appraised.

3. Decide

From raw data to actionable insight, decision-makers should now be well-positioned to decide on the appropriate response. Ultimately, this step of the process is about choosing from among a great many options. Each option will be informed by the foothold established in the orientation phase, but this is the forward-looking part of the equation. Given the present variables that have been established, which course of action will deliver the most optimal outcome? Invariably, this phase produces a hypothesis: the decision-maker predicts what the best course of action will be based on his understanding of the situation.

4. Act

This step is about testing the hypothesis generated in the decision phase. Here, you’re doing two things: executing your decision, and determining if your hypothesis was right. Because the OODA loop is, after all, a loop, action is never the last step of the process. What is learned about the validity of the hypothesis is repurposed throughout the entirety of the next cycle of the OODA loop. Ideally, future cycles will be both more accurate and faster.

What is the OODA Loop Really About?

For military commanders, law enforcement, and corporate executives, the OODA loop represents a methodology by which to improve decision-making processes. The concept has had remarkable staying power and indeed, in today’s technological ecosystem, it seems all the more relevant. As the Internet of Things and connected digital assets contribute to an ever-growing vault of valuable data, turning that data into actionable insights requires increasingly rigid, repeatable, and process-oriented decision-making methodologies. For this, the OODA loop serves the purpose.

With the OODA loop, crucial information can be interpreted within the parameters of clear objectives and variable contexts. By following each step in the OODA loop — and updating your assessment of each step based on real-time data — it’s possible to identify systemic bottlenecks, develop effective strategies, and implement purposeful solutions on a more competitive timeline.


The OODA Loop in Action

While the OODA loop continues to be used in the military for everything from daily operations to high-level strategy, it’s also become popular in the modern enterprise as executives face an increasingly fast-paced, competitive marketplace.

For executives in the enterprise, the application of this paradigm is meant to improve operational efficiency; and success in this regard will be measured by the organization’s ability to shorten their loop, speed up response times, and apply more learnings more quickly. Indeed, by condensing what used to be drawn-out analyses into a decision-making framework suited to the breakneck speed of modern business, the OODA loop allows enterprise decision-makers to outmaneuver the competition by making better decisions, faster.

Boyd’s concept has, for example, found a new home in the manufacturing sector. By encouraging system managers to identify issues quickly, orient their resources accordingly, decide on a course of action, and execute that plan effectively, it’s possible to respond to changes of demand, supply chain disruption, and other contingencies more quickly than the competition.


Measuring Success With the OODA Loop

The OODA loop provides a methodology for discrete action, but it also provides a broader framework for measuring organizational success and enabling high-level strategic optimization. Organizations that are performing well will have a short, fast OODA loop — these organizations will be able to quickly ingest data, form actionable insights, determine the optimal solution, and execute on it.

Poorly-performing organizations will have long, slow OODA loops — their decision cycles will be kinked, bottle-necked, and as a result both slow to mature and suboptimal. The goal of every organization should be to improve the speed and efficacy of their OODA loop.