The OODA loop (observe, orient, decide, act) is a strategic tool that supports making decisions when there is limited time and information available. It provides a way of identifying potential options in the decision-making process that impact the competition’s ability to also reach a decision. It uses feedback loops to allow decision-makers to revisit different stages as they learn more information.
The OODA loop was originally developed in the mid-20th century by Colonel John Boyd, a United States Air Force fighter pilot and military strategist. It was created to help fellow fighter pilots to make logical decisions during combat when they had to react quickly but didn’t have ample time to collate information.
Boyd designed the OODA loop after observing that US pilots fighting in the Korean War had a high success rate in combat, despite battling with better machinery brought by the opposition. He acknowledged that this success rate with the US pilots was likely due to how they were acting rather than relying solely on their aircrafts. He concluded that the US pilots were far superior at observing and quickly orienting to their environment, making a decision, and acting on it. Speed, accuracy, and adaptability were more important factors in the fighters’ success than physical resources. The OODA loop, also known as a Boyd Cycle, formalized this decision-making process.
Flying the OODA loop is common terminology used to describe the process of cycling through the different stages of the OODA framework. Flying is a nod to its aviation routes while also acknowledging the idea of constant movement. If you are flying the OODA loop, there is a continuous learning and feedback process as you briefly land in one stage before progressing to another. Each flight (loop) will consist of more learning - such as current market insights - which informs and influences the other stages of the framework.
Constant revisits and updates to OODA stages reflect rapidly changing conditions and the importance of adaptability when making a strategic decision. This is why “flying the OODA loop” is used specifically when discussing adaptive thinking in strategy.
While the OODA loop was originally developed for the military, it has since evolved into being used in strategic business contexts across various industries. Boyd placed heavy importance on disrupting an opponent’s decision-making process, by reacting quicker, to stay one step ahead. There is still a great emphasis on the information used to reach a decision, rather than relying on power and resources. The main focus when using the OODA loop, as Boyd discovered, is mental agility and adaptability in dynamic environments.
OODA is now a widely adopted tool used for strategy creation by organizations around the world. In spite of OODA’s simplistic nature, it has demonstrated its effectiveness in warfare and offers business leaders (or other decision-makers) an efficient way to create competitive advantage - especially in rapidly changing market conditions.
The earlier OODA representation was not as straightforward as the widely accepted process followed today. Boyd’s OODA diagram focused heavily on various iterations of decision and feedback loops. This contributed to OODA being simplified into how it is currently used for organizations. It is an ideal tool for building a strategy as it comprises elements that lead to success in business: speed in decision-making, handling uncertainty, data-driven decisions, and is highly adaptable.
There have been major advances in how organizations form their strategy compared to many years ago. Thanks to the introduction of the internet and other digitized services, we now have access to far more information than when OODA was originally developed. Sufficiently analyzing this data, and highlighting relevant points to make decisions, is now a more informed but noisier process. This means that the observe and orient stages may take longer than Boyd intended.
Recent shifts have now also placed more importance on making the right decision rather than a quick one. For decision-makers, this involves spending more time to correctly identify and develop a deep understanding of the problem they're trying to solve. There is also increased awareness around having a variety of different knowledge and opinions - and making decisions as a team - so a decision is both well-informed and reached using a comprehensive approach.
Since its creation, the OODA loop has evolved and been developed for a variety of scenarios. Its key principles, simple nature, and adaptability mean that OODA is applicable to both daily situations and supporting strategic business decisions.
OODA was defined with adaptability and agility at its core. This means it is best suited for situations where speed is crucial - especially to outmaneuver competitors - but it is accepted that the data that informs the decision may be inaccurate or change in the future. Regularly using the OODA loop teaches decision-makers to take a different approach as the framework becomes a common practice. For example, agility can be learned through consistent observation and orientation which would help to navigate future challenges more effectively as this process becomes ingrained.
The OODA loop has also stood the test of time. When originally developed, business use was likely not considered. Yet the different challenges faced by organizations are compatible with the OODA framework - even those introduced by technology that didn’t previously exist. The constant change of the world we live in aligns with OODA’s function in rapidly changing environments. This makes the OODA loop an ideal tool for building a strategy.
However, the OODA loop is occasionally misunderstood. While OODA does have a strong speed focus, this can cause concern among decision-makers that a decision will be rushed. OODA’s development means there is now more of a consideration for making informed decisions quickly, rather than acting in haste. There is also the risk that decision-makers spend too long analyzing the micro-level instead of the macro and strategy gets pushed aside. Information presented when using the OODA loop in strategy creation should be centered around disrupting an opponent and adapting to new circumstances to avoid this occurring.
The OODA loop has proven both its longevity and worth in business and military situations. It is foundational to modern strategy execution and instills an agile approach to forming decisions. To embrace its full potential, decision-makers must continuously learn and adapt to new environments, leading to more effective decision-making and competitive advantage.