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Decision Making is essential to any organization's success.  Military strategists use their training and experience to create battle plans and make quick decisions aimed at achieving specific objectives.  Military strategies, concepts, and practices have found widespread application in business and daily life.  The works, memoirs, and experiences of renowned military historians and strategists, such as Sun Tzu's "The Art of War," Clausewitz's "On War," and Liddell Hart's "Strategy," are highly esteemed in the business world and continue to be utilized by business executives worldwide.

Numerous businesses have successfully captured markets, competed with rivals, and accomplished strategic objectives in the marketplace by employing military strategies.  In both the military and the business world, unity of command, planning, effective communication, Decision Making, mutual understanding, and coordination are essential.

Colonel John R. Boyd was a fighter pilot in the United States Air Force and a renowned military strategist whose writings and theories have been extensively adopted by the military and the business community.  Boyd served at the Pentagon and provided mathematical support for the F-15 Eagle program.  Together with the mathematician Thomas Christie, he created the Energy-Maneuverability (E-M) theory of aerial combat, which became the industry standard for designing fighter aircraft.  In addition, he made significant contributions to the development of a light aircraft (later known as the F-16).

Colonel Boyd's most well-known theory is the Observe, Orient, Decide, and Act (OODA) Loop or Boyd's Decision Cycle.  The military uses this instrument to plan and execute strategic decisions.

In the business realm, the OODA Loop is a Decision Making mechanism.  The model consists of a four-step decision loop:

1. Observe – entails gathering as much pertinent data as possible.
2. Orient – involves analyzing the data gathered.
3. Decide – entails choosing a course of action.
4. Act – involves implementing the decision.

Implementing the OODA Loop provides numerous benefits for organizations.  For instance, this framework: 

• Improves the processing and reaction periods of practitioners.
• Establishes harmony and reduces discord among parties involved in a decision's implementation.
• Enables prompt, objective decisions.
• Enables individuals to concentrate on particular aspects rather than uncertainties.
• Promotes Problem Solving and innovative abilities.
• Establishes a dynamic, adaptable, situationally aware, and receptive culture.
• Highlights the importance of careful planning and preparation for effective decision making.

Inadequate planning, lack of practice, and reckless execution of the OODA Loop may result in the following negative outcomes:

• Erroneous, costly decisions as a result of a lack of conceptual understanding.
• Problems and calamities resulting from a decision made without taking into account all available data, scenarios, consequences, and possible outcomes.
• Individuals' erroneous perception of the model's credibility.
• Negative outcomes result from failing to use the OODA Loop in an iterative cycle under familiar conditions.
• Failure to account for the additional response times inherent to team settings and collaboration can result in discord among team members.

Let's examine the OODA Loop's first two stages in detail.

Stage 1: Observe

The initial phase of the OODA Loop requires data collection, a thorough evaluation of the hazard or problem, and an understanding of the organizational and external context.

Observations influence the Decision Making process.  If the OODA Loop's initial phase is flawed, the subsequent decision and action will also be flawed.  In order to accurately appraise the unfolding situation, it is necessary to collect all the data regarding the current organizational state, competitors, and market during the Observation phase.   This is essential prior to making a decision because, while rapidity is important, developing your analytical skills and being able to see what's actually happening are more important.

Stage 2: Orient

During the "Orientation" phase of the OODA Loop, information is acquired, analyzed, and a thorough comprehension of the situation is developed.  This stage involves reflecting on the observations' findings and determining the subsequent actions.

During this phase, we endeavor to create a mental model of the environment or problem, considering our prior experiences and biases into consideration.

Interested in learning more about the other steps or stages of the OODA Loop? You can download an editable PowerPoint presentation on the OODA Loop here on the Flevy documents marketplace.

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