There’s a lot that the business world can learn from the military. With a clear strategy, commitment to diversity, a loyal and long-standing team, creative tactics to recruit younger generations, and the unwavering ability to hit goals, the military has a lot to brag about when compared with the corporate world.
It follows that many organizations make it a priority to recruit military veterans in the hope of achieving some of these benefits. In fact, a study by Kellogg School of Management found that former soldiers are better prepared to “make tough decisions and show leadership in tough times.”
However, there may be another way to bring some of the military’s wisdom into the private sector. By learning how to apply military strategies to business practices, innovative businesses are recreating these tried-and-true tactics to create disruption in their respective industries.
Wondering exactly which military strategies are being used? Let us introduce you to the OODA Loop.
What is the OODA Loop?
Developed by US Air Force Colonel John Boyd in the 1960’s, the OODA loop is a process that consists of four steps empower smarter, faster decision-making. Each phase of the process works together to create a systematic approach to filter, process, and act on new and existing information.
Originally, the OODA loop was used as a military training tactic to help fighter pilots make smarter decisions in environments where every second counts. By using this framework, pilots were able to process information faster than opponents and gain the upper hand in high-stakes situations.
The OODA loop is flexible framework that can be applied for a variety of organizations, ranging from small startups to Fortune 500 companies. The four steps are as follows:
- Observe. The first step is to identify the problem and examine the current system by collecting objective quality and productivity data.
- Orient. Next, the data is put into context by analyzing the current outputs and measuring them against overall business objectives.
- Decide. The decision phase prepares for action by formulating a data-driven roadmap
- Act. Action is taken with progress objectively evaluated against objectives
The main benefit of applying the OODA loop to business scenarios is that it allows the user to quickly gain situational awareness. Then, smarter decisions can be made and executed at a much faster pace than the typical decision-making process.
When Should the OODA Loop be Applied?
Since its invention for military strategy, OODA loops have been applied to robotics, law enforcement, game theory, information security, and perhaps most notably, business strategy. The business world has embraced this framework for its ability to build a competitive edge.
For businesses looking to implement the OODA loop framework into existing processes, the best place to start is highly competitive business functions. These are areas where the market is rapidly evolving, a competitor is presently threatening to overtake your business, or some other external force is involved.
In today’s landscape where technology can make or break a business, business digitalization efforts are the perfect place to apply OODA loop principles. This is especially pertinent for industries that are already lagging in their digital transformation.
For example, consider a Plant Manager at an industrial facility that needs to shorten their production cycle in a short amount of time in order to meet current market demand. Applying the OODA loop, the Plant Manager would:
- Observe: First, identify the problems with their current system that are causing the prolonged production cycle.
- Orient: Next, they would analyze the relevant data depicting how the current system is measuring up to overall business goals.
- Decide: A digital solution is selected and a data-driven roadmap is developed to deploy and scale the use of the new technology at the facility.
- Act: The technology is piloted across an isolated area of the facility, repeating each step in the OODA process over again as its use is scaled across the entire facility.
Overall, businesses that successfully use the OODA loop can make smarter, faster business decisions when it comes to technology.
Benefits of the OODA Loop
In addition to enabling smarter technology and digitalization decisions, implementing the OODA loop into the decision-making process offers the following benefits.
- Systematically incorporates objective data in the decision-making process
- Shortens the decision-making process through quicker reaction times
- Creates a more agile organization by limiting indecisiveness and bureaucracy
- Adds a competitive edge through increased situational awareness
- Fosters a culture of innovation and collaboration
Remember, the best place to use the OODA loop is when some sort of external force (such as a market trend or competitor) is threatening to disrupt your current business. After all, OODA was first used by the U.S. Air Force to make fast decisions when lives were at stake. When applied correctly, it can help your business always stay one step ahead of the competition.
While the OODA loop brings a lot of value when used in business settings, its application can be practiced across a number of different settings. From deciding what to make for dinner to evaluating whether to make a big career move, OODA can also help with a variety of personal, everyday decisions.