The most general strategy framework you are using, but are not aware of
Did you know that the (arguably) most general strategy framework around was not invented by any strategy consultants, but instead was discovered by the US airforce Colonel John Boyd? In its simplest form, it is a general description of all strategy processes and forms a very useful approach for how we respond to external changes in the situation we are in. You are most likely already using the framework without knowing it. By becoming aware you might be able to get a better chance of getting things right in the situation YOU are in and get a feeling for whether there is any particular part of the framework where you could do better.
Introduction
John Boyd was a US airforce pilot that was responsible for a number of breakthroughs in human knowledge. He developed specific theories for fighter aircraft that led to the F-15 and especially the F-16, which arguably is the most successful fighter jet of all time. The insights from that work later led to him developing a lecture series "On winning and losing" where the concept of the OODA loop is the final result. The OODA loop is a description of how strategic decisions are being made. The speed at which you make decisions in the OODA loop is often a determinant of your effectiveness, and getting "inside" your opponent's OODA loop is a strong key to victory.
The OODA loop originates from the military side of strategy but is directly translatable to the world of business. It is so general that most other strategy frameworks (there are a lot of them) can all be described with the OODA loops language.
How the OODA loop works
OODA stands for Observe, Orient, Decide, Act
What you see in this rather complicated picture is what goes into each step. While the picture above is complicated, in its simplest form the OODA loop is not complicated at all.
Observe: We observe some form of change (or no change) in our environment
Orient: We understand the change to the best of our ability. What does this change mean for us? What OPTIONS does it provide?
Decide: We decide on which option to use, or if we are not able to make a firm decision we put forth a hypothesis for what to do.
Act: We implement and carry out the decided-upon option, or if we had a hypothesis, we test the hypothesis.
Decisions and actions we make, will then impact our situation and our environment which we observe, and orient ourselves to and we potentially get new options for action that we can decide to use and implement.
A simple example
Let’s say that we are walking on the savanna and suddenly we see a lion. I.e we OBSERVE a lion. The OODA loop might look something like the following.
Observe: There is a lion on the savanna close to us
Orient: We can stop and hope that the lion will not see or smell us or is uninterested. We can run and hope that the lion will not follow or will not be able to catch us. We can pick up rocks from the ground to throw at the lion to make it go away. Etc.
Decide: We decide to stop and hope
Act: We stop.
Then we are back at observe again. What is the lion doing? What should we do in response? And round the OODA loop we go until the lion is gone, dead or we are eaten.
A simple example from the business world
Let's have a simple example from the business world. Let's pretend to be Nokia in 2006 when the iPhone was revealed.
Observe: Apple, who had done very well with their iPod series, is launching a smartphone based on a touchscreen
Orient: Nokia decided that they were in a continued strong position and could continue using their Symbian operating system and continue to build smartphones using Symbian. There seems to have been a lack of alternatives for Nokia at the time. But they ought to have had the option of perhaps testing an open-source alternative (android) or building on the Microsoft offering that was there at the time.
Decide: Nokia decided to continue with Symbian as the first-line defense. Whether there was any hypothesis around other means of defense is not known to the general public.
Act: Keep the corporate plans as is.
These actions were taken by Nokia (or perhaps we should rather say, in-actions) led to Apple creating or at least dominating a new segment of phones, the touch screen smartphone, and by doing that they opened up new markets and growth for a number of players, Google with the android offering being one.
Nokia failed to respond and answer the market fast enough, i.e, they could not run through the OODA loop fast enough, and Nokia as we knew it is now gone.
There are of course loads and loads of reasons why mistakes were made, and Nokia’s demise was not the result of making a mistake in one single OODA loop, but rather, the company failed to adjust in many many OODA loops in a row. And we're not able to go through the loops fast enough to adjust when needed.
What businesses get wrong
Businesses tend to be weaker in certain aspects of the OODA loop.
There is often observation carried out in many shapes and forms. However, the orientation is not carried out equally well. I.e lots of talk about what is happening, not so much focus on the available options to deal with it.
When a clear decision is hard to make, businesses are poor at working with hypotheses. A hypothesis is more or less a fancy word for "testable guess". Setting up testable guesses, and testing them is something that lies at the core of innovation and it is something organizations struggle with. Especially older larger organizations
The biggest issue is normally that the speed at which the OODA loop is executed is slow. Orientation is especially slow and decision-making is slow. Why is it slow? Because once you get to act and you see the impact your actions have, and you restart the OODA loop, it is difficult to change again. The rigid form for most large companies slows down the OODA loop a lot.
How to become OODA proficient
It is not possible to give an exact "get fit plan" to follow, but general advice can be provided to make an organization more agile I.e "OODA proficient".
Be aware of the fact that there is such a thing as business DOCTRINE, i.e a large number of useful patterns, that will significantly increase your business agility/ ability to run through the OODA loop. Examples: know your users, challenge assumptions, and think small (know the details). A long list can be found here: https://doctrine.wardleymaps.com/
Make sure that you have a way to test hypotheses in an effective way. Certain areas have a lot of uncertainty in them. the way to deal with uncertainty is not to act as if it is not there, it is to explore with experiments
Be aware that it is often better to make OK decisions fast and adjust later than making the perfect decision that is way too late. This is the essence of a fast OODA loop
Why does it matter to you?
It is very likely that you are part of executing some form of OODA loop. It can be at a high strategic level but also at a day-to-day operational level. Where you fit depends on you and your role. Even if you are not at the top level of an organization, being aware of the OODA loop and how to improve it can be extremely beneficial. By structuring your own decisions and actions so that the OODA loop can run faster, you may be able to get more done with fewer problems. If you are in a leadership function, creating an organization around you that is able to OODA loop faster can have massive benefits. Imagine responding to market changes faster than competitors, introducing new offers twice as often, etc. It is possible to get there with a focused effort to OODA better!
