The OODA Loop

OODA is an acronym for Observe, Orient, Decide and Act. It’s a decision-making process originally developed by military strategist and USAF Colonel John Boyd.

The OODA Loop is a four-stage decision-making process that stands for Observe, Orient, Decide and Act. The OODA loop bases itself on the premise that parties to a conflict or competitors are systems that operate through a rational decision-making process that follows a cycle of Observation, Orientation or situational awareness, Decision Making, and Action.

Here’s how it works:

• Observe: In this stage, you gather information about your current situation. This could include data about your environment, your competitors or any other relevant factors.
• Orient: In this stage, you analyze the information you gathered in the Observe stage. You consider your own strengths and weaknesses as well as those of your competitors or other relevant parties. You also take into account any cultural, historical or other contextual factors that might influence your decision.
• Decide: In this stage, you make a decision about what to do based on the analysis you conducted in the Orient stage. You choose a course of action that you believe will help you achieve your goals.
• Act: In this final stage, you implement the decision you made in the Decide stage. You take action to achieve your goals.

By going through these four stages in a continuous loop, individuals and organizations can make quick and effective decisions in rapidly changing environments.

The OODA loop is a decision-making process that can be used in a wide range of fields. It was originally developed for use in air-to-air combat situations by military strategist and United States Air Force Colonel John Boyd. However, it has since been applied to many other areas including business, sports and personal development.

The OODA loop can help individuals and organizations make quick and effective decisions in rapidly changing environments. By going through the four stages of Observe, Orient, Decide and Act, they can gather information about their situation, analyze it to make informed decisions and then take action based on those decisions. Is there anything else you would like to know?

Use Cases

The concept was originally developed to help with decision making in air-to-air combat situations. However, it has since been applied to a wide range of fields including business, sports and personal development.

The OODA loop can help individuals and organizations make quick and effective decisions in rapidly changing environments. By going through the four stages of Observe, Orient, Decide and Act, they can gather information about their situation, analyze it to make informed decisions and then take action based on those decisions.

An example of how the OODA loop can be used is in a business setting is that a company might use the OODA loop to make decisions about how to respond to a new competitor entering the market.

• First, they would Observe the situation by gathering information about the new competitor and their products or services.
• Next, they would Orient themselves by analyzing this information and considering their own strengths and weaknesses.
• Then they would Decide on a course of action based on this analysis.
• Finally, they would Act by implementing their decision.

Organizations use the OODA loop to orient their strategy to disorient or disrupt their competitors. The “observe” phase of the OODA loop probes and tests competitors to reveal their strengths, weaknesses, maneuvers, and intentions. Instead of the conventional approach of using raw power to overwhelm competition, or reacting to competitors actions, John Boyle’s OODA loop recommends implementing the OODA cycle at a faster pace than competitors do. Such a blitz, while making explicit the competitors intentions to the organization, obscures the organization’s intentions from the competitors, and thereby makes the organization unpredictable and ambiguous to competition, and inhibits the competition from adapting or reacting to the onslaught.

The OODA loop helps organizations exploit situations and respond to challenges better, and change existing states or conditions before customers lose interest, before competitors understand the organization’s business strategy and devise something better, and/or before the external environment changes for the worse.

This can help companies make quick and effective decisions in response to changing market conditions.

Use in Business

Sun Tzu’s “The Art of War” has guidelines that sheds light on how to lengthen the competitor’s OODA loop. Countering competition requires being extremely mysterious to the point of soundlessness to the point of formlessness. The strategy is not to wait for the competitor to make a mistake and hope to capitalize on such mistakes, but rather to adopt deception, make fast transient manoeuvres, and show unexpected reactions to competitor initiatives. Such postures sow uncertainty, mistrust, and ambiguity in the competitor’s mind, enticing them to make wrong perception of threats, and thereby, make wrong decisions. Attacking the competitors thought process through such means also shatters their morale values, generates panic, and induces decision-making paralysis, leading to their collapse. The exact means adopted depends on the perception of threats.

The business strategy adopted by Honda trying to overcome the challenge poised by Yamaha is an example of OODA applied to competition. Honda countered Yamaha’s initiative to build a new grandiose factory and take the title of “World’s Largest Motorcycle Manufacturer” away from Honda not by building an even larger factory but by a smart manoeuvre of introducing many more new models to Yamaha’s 37. Honda neither waited to see what Yamaha was going to do, nor aped Yamaha’s strategy. It rather processed a faster OODA cycle to seize the initiative of shaping the marketplace, with decisive effect. At the end of eighteen month, Yamaha publicly acknowledged defeat.

In 2002, Netflix observed that the Internet was becoming more important and that consumer broadband access was increasing rapidly. While the market wasn’t quite ready for streaming videos, Netflix oriented towards this future. At this point, Netflix could see several ways forward

Similarly, Wal-Mart bases its success not on a reactionary approach of detecting market trends but by a fast OODA loop to create such trends in the first place. Wal-Mart succeeded in rapid conversion of ideas into reality such as reinventing the Five-and-Dime marketplace into rural markets to pull the rug out from under its competitors.

OODA as System

The OODA loop bears resemblance to the Plan Do Check Act cycle. Both OODa and PDCA highlight the importance of analyzing situations accurately, checking for actions to have intended results, and making the required changes. This is applied to automation as follows:

(O)=Observe: The system scans the environment and gathers information regarding changes in the environment that affects the system directly or indirectly, and how the environment reacts to the strength, weakness, maneuvers, and intentions of the system. Such observations aim to spot mismatches before customers and competitors do.

(O)=Orient: Orientation is interpretation of the observed information, or converting information into knowledge by developing concepts through analysis of information. The way the system interprets knowledge depends on culture, genetic heritage, ability to analyze and synthesize, experience, and latest changes to information, and success depends on such interpretation being better or more relevant than that of the competitors.

(D)=Decide: Decide is weighing the several options or alternatives available from the concepts knowledge body generated during the orientation phase, and picking the best one. For instance, a company having realized the need for a new product may choose to launch a new product or repackage an existing product, based on what they perceive the customer would do with the same knowledge. Decisions are at basic level guesses, and as such, need to remain fluid or work-in-progress, ready to change as new information comes.

(A)=Act: Act is carrying out or implementing the selected decision. This completes the OODA loop and the feedback of the implementation is the basis for the next round of observation.

John Boyd

John Richard Boyd (January 23, 1927 – March 9, 1997) was a United States Air Force fighter pilot and Pentagon consultant of the late 20th century. He was born in Erie, Pennsylvania. Boyd enlisted in the Army Air Forces on October 30, 1944 while he was still a junior in high school. After graduation, he completed his basic training and skill training as an aircraft turret mechanic during the waning months of World War II.

Throughout his career, Boyd studied dogfighting principles, based on his experience as a fighter pilot to explain victory in air-to-air combat, he looked at the ability of an aircraft to manoeuvrer into positions of advantage where it could shoot down an opposing aircraft.

He later extended this concept into a grand strategy to defeat the enemy by psychological paralysis and the OODA loop found its way from the military battlefield to corporate boardrooms as a management strategy, where the theory has been highly influential business, sports and litigation.

He retired from the U.S. Air Force as a Colonel on August 31st,1975.