In such a fast changing world, evolving technological landscape and rapidly growing business environment, the only way for entrepreneurs to stay relevant is to execute faster.

 

Agility is proving to be as important in business as any sport. And companies who fail to iterate and innovate faster will perish in no time. So how to do that with minimal risk, swiftly and effectively? This is where the OODA loop comes in picture.

 

OODA (Observe-Orient-Decide-Act) is a famed military strategy that was developed by John Boyd. Boyd applied this concept actively and successfully during his own military combat operations and there is a lot of things we can learn from this. This strategy works like a hot knife on butter in businesses as well. This concept not only is applicable in a changing market, but also equally effective when you are head to head against a competitor trying to win the biggest chunk of market share.

Let’s break down the OODA cycle below!

 

Observe

Observation is being aware of the situation you are in; gathering all the data on your table and knowing where you are on the number line of gradually shifting trends and markets. Observing where you stand is crucial as it will help you equip with all the data points and a clear awareness of the means at your disposal. In military combats, the soldiers were forced to observe their surroundings, gather and memorize everything they can before moving forward, remember pictographic checkpoints in their head and to know the blind spots/paths if they had to retreat or pull in the enemy into their territory. Similarly, businesses can know their checkpoints as to where they stand in the market, how they got there and where is the market heading? What means do they have at their disposal for the next stage of the shift and could they gather any more leverages? These are the questions to be asked and answered during this stage of the loop.

Orient

Orientation is the most important of all the 4 stages in this loop because this stage demands you to orient yourself based on what you have gathered from the ‘Observe’ stage. This is the most important stage because if you get this wrong, then the whole loop falls apart. This goes to say that the decisions you take in this stage is going to be a mix of logic and gut feeling. Continuing the previous example of battle combat, soldiers would rent themselves and devise a plan of action that would potentially compliment all the information they gathered from the ‘Observe’ stage. Should they detour and bypass the small battalion that they see ahead or just open fire and go through them? Will bypassing them now prove to be a future risk? Will this affect when we retreat? Do we have enough ammunition to take them now or bypass them and gather some ammunition and coming back when the time right? These are the questions they would ask themselves to orient themselves towards the next plan of action. Similarly, in business, the right set of questions to ask and answer would be ‘Do we have enough cash to outrun our competitors in the marketing spend?’, ‘The way we have been marketing all along, is that still relevant or do we need to change our approach?’, ‘Do we need to be prepared for some other competitor in another potential market that would hinder and waste our marketing dollars in that market?’ etc. Answering such questions will help you orient yourself and the business in the right direction for the next stage.

Decide

The third stage is relatively easier as all you have to do next is decide on the data you have gathered and the orientation you have cultivated. Consult your board members or discuss among your peers and take their vote if required on the next steps to take. You must decide on what to act on based on the information and mindset at your disposal and decide in this stage as to what you will be doing next. Setting targets with deadlines and clear plan of action is absolutely important in this stage at this leads way to the final stage of the loop.

Act

All that is left there now is to act on what has been decided. One of the important thing to note at this stage is that, synchronization is very crucial. This stage is not the stage to iterate and act on your own if you are a part of a team. What has been devised and decided in the previous stages, needs to be executed in that manner. One soldier going rogue and iterating on their own at this stage would prove to be fatal to the whole battalion during a battle and this same applies to business. Everything needs to be done in tandem as decided in the previous stage. Once this is executed properly, you will end up with some new information, data points, space and a new time in the market. This is the time to go through the loop again. Start back with Observing where you are taking it from there stage by stage.

According to Boyd, it is extremely vital to change speed and direction faster than your opponent. This simply means, the faster you go through the loop, the better are your chances of getting out on the other side as a winner.