The OODA loop — A Strategy Tool for Turbulent Times

The OODA loop is a tool every business leader should be familiar with. It’s a core part of U.S. military training, and accounts for much of the strength of our military. In today’s turbulent times, it’s equally applicable to business leadership and strategy.

During the Korean War, American pilots won ten air battles for every one they lost. This was despite the fact that they were facing well-trained Russian pilots flying MiG-15s which were pretty evenly matched to the Americans’ F-86s.

An American pilot, John Boyd, became intrigued with how this could be. He began studying battles where armies won overwhelmingly, even when outnumbered by their enemies. Besides Korea, other examples include the American Revolutionary War and the Blitzkrieg which began World War II. During the Blitzkrieg, the German Army overran the combined French, British and allied forces in less than two weeks.

Boyd spent the rest of his colorful career developing his theories of war strategy and evangelizing for them. Eventually they evolved into the concept of the OODA loop, which has been applied in the development of the F-15, F-16, and F/A-18 aircraft, has been adopted as official doctrine by the U.S. Marines, and was employed with great effect in both Gulf Wars.

But this isn’t a military blog, and you may be wondering why I’m writing about this. It’s because, as Chet Richards points out in his excellent little book, Certain to Win, Boyd’s theories have interesting implications for business strategy. Consider, for example, one way in which Boyd summarized the goals of his strategy: ((From Certain to Win, by Chet Richards, page 43))

What we want to have on our side

  • Sense of mission
  • Morale
  • Leadership
  • Harmony
  • Teamwork

Which allow us to:

  • Appear ambiguous
  • Be deceptive
  • Generate surprise and panic
  • Seize and keep the initiative
  • Create and exploit opportunities

Which cause these in the enemy:

  • Bickering
  • Scapegoating
  • Confusion
  • Panic
  • Rout
  • Mass defections and surrender

Some elements of this may be a bit strong for normal business competition — surrender is a rarity, after all — but we have all seen situations where one competitor’s strategy reduced its other competitors to bickering, scapegoating, confusion and panic. For example, this is what Toyota has been doing to its American competitors for over 30 years. Just as in warfare, any business strategy which enables you to do that to your competitors on a regular basis is very powerful.

So, what is the OODA loop, and how does it work? The concept is fairly simple. OODA stands for Observe, Orient, Decide, and Act. Executing an OODA loop involves observing what facts are available, orienting yourself accordingly, making decisions (explicitly or based on skill and intuition) and taking action. What makes this strategy so powerful is Boyd’s emphasis on speed and the use of speed to create surprise. As the Marine manual Warfighting puts it,

By our actions, we seek to impose menacing dilemmas in which events happen unexpectedly and faster than the enemy can keep up with them

This is a powerful notion, and very different from the largely static conception of strategy taught in most business schools and discussed in business publications. In today’s unstable and rapidly changing business environment, your ability to decide and act more quickly than everyone else may be the edge that helps you to succeed when all about you are failing.

Of course, there’s a lot more to this than I can lay out in one short blog post, particularly concerning how to create a business culture and organization capable of fast OODA loops. I may come back to that in future posts. In the meantime, I suggest reading Richards’ book.

I look forward to your comments.

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