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.
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.
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.
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.
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.
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.
The concept of the OODA loop originated with the late great John Boyd, an Air Force Colonel who helped train pilots in air-to-air combat during the Cold War. Boyd understood that, in aerial engagements, pilots who are able to make sense of variables, position themselves accordingly, integrate those variables into a strategic plan, and implement that plan at the right moment are most likely to emerge as the victor.
After Boyd introduced the concept, the OODA loop went on to become instrumental in combat training in the latter half of the 20th century.
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.
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.
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.
For officers and executives alike, the OODA loop will continue to provide an essential decision-making paradigm going forward, especially as our networks and digital assets provide us with greater insights into strategic situations than ever before. As stakeholders invest in situational awareness platforms that gather, interpret, and activate disparate data streams to provide clear-cut pictures of complex situations, this kind of thinking will become more and more essential.
The OODA loop is already evolving to fit next-generation needs and industries. With advances in technology, enterprises can leverage AI, Big Data, and predictive analytics to improve their decision-making processes and increase the rate at which these decisions are made and implemented.