The OODA Loop — observe, orient, decide, act — is a strategic tool used for making decisions while a situation is still evolving, or not all the information is available. It is made up of several feedback loops that inform the other stages. For now, we’re going to focus specifically on the ‘observe’ stage.
The observe phase of the OODA loop primarily concerns gathering information. This can, and should, be taken from a wide variety of sources. The more information that is collected in the observe phase means you will have a better understanding of your current situation (or problem). This also creates a collaborative approach as you’ll need to involve various stakeholders.
Information gathered and used in this stage can soon change or become out of date. It’s important to act quickly once you feel you’ve collated enough relevant information — as the OODA loop was originally intended.
Why observation is critical to strategic agility
Strategic agility typically consists of three components: market, decision, and execution agility. The more you know about your abilities in these areas, the more flexibility and contingency you can build into your plans. For example, you may have a great new product idea, be close to launch, but get beaten to it by a competitor. Observing the competitive landscape in detail could have potentially halted or stopped your plans entirely. Strategic ability in this scenario is being able to pivot and overcome these hurdles.
You will also be better positioned to react to new opportunities or threats as new information emerges. You will become quicker at recognizing both opportunities and threats as they present themselves. You will have heightened situational awareness. This is particularly valuable when navigating a complex project with many moving parts as you will have prepared for this in your plans. Effective information is critical to success in a competitive environment.
Strategic agility goes beyond simple forecasting. It also incorporates the ability to make changes. Taking time to observe your environment will give you an understanding of what is going on, and what might happen next. These observations will help you to apply your newly gained knowledge to similar scenarios, or when navigating changes. This will also enable you to make more informed and smarter decisions than your competitors — removing their available options — to disorient them.
Ways to complete the OODA observe phase
The principal aim of the observe phase is to gather as much information as you possibly can. You can do this however is best for you, but there are some tools and resources available to help you structure your search.
Readily available data
Use data that is readily available within your organization. This could be either general internal documentation, or notes taken during following customer calls — anything you can source that’s relevant. This data should be rich with insight and feedback that will give you guidance on your current performance, and will also aid in data-driven decision-making.
You could even consider speaking to (or interviewing) employees across the organization that work in different seniorities or business disciplines. This will offer you a variety of opinions and experiences to help you with the following OODA stages and inform your final decision.
For a manufacturing organization, this could be talking to employees about their wellbeing and opinions on the company culture to investigate whether it would be possible to expand market operations. Alternatively, you could check current equipment quality in relation to performance and output. The type of information you source will depend on your end goal.
Skill and capability assessments
By understanding what your organization and employees are capable of, you will be better positioned when choosing a course of action. Skills and capability assessments allow you to understand where strengths lie and further development is required to help you achieve your strategic goals.
Market analysis
Market analysis allows you to understand where you are in the market right now, and what might affect your position. This can be looking at the space you’re in, whether there’s room to grow, and potential trends - as well as the current market conditions. You should also look at any potential risks or opportunities for your organization that might affect your eventual decision.
Consider also analyzing your customer-base. Regularly checking on this data means you will be more alert to any sudden changes, identifying patterns over time, or highlighting particular events that may have had an impact.
No worries if market analysis isn’t your strong suit. There are many popular AI tools that can simplify this process for you.
Competitor analysis
If you understand where you stand in the market, you also need to understand where your competitors are. This includes looking at who your competitors are, their strengths and weaknesses in comparison to your own, and their market position.
A thorough competitor analysis will support in deciding your strategy and actions regarding your final decision. This will also highlight any maneuvers you could make that limit the options for your direct competitor.
Retrospective meetings
Another alternative option for data gathering - that will give you even deeper insight - is retrospective meetings. Retrospective meetings offer a formalized way for various team members to give feedback on all aspects of a project.
This could also include information gathered from other feedback loops in the OODA process. The different opinions, knowledge, and experience, will enrich your data and streamline the following OODA stages.
Tools and templates to structure observation
You are free to organize your information however you see fit. If you like a classic approach, spreadsheets are an excellent way to track and categorize your observations. However, this can make cross-functional collaboration difficult and create additional project admin. Perhaps working digitally is more your style…
Strategy Cards, built using the OODA methodology, leading users through all four stages of the OODA loop. It provides a guided way to capture and organize insights so teams can contribute observations, flag gaps, and stay aligned as a project or initiative develops.
As an example, a business wants to reduce manufacturing defects per 1000 items from 100 to less than 10. To do this, they would need to consider researching competitors, market trends, supplier challenges, and eventually their internal processes. This would define the starting point for their project.
In the observe stage, there is a vast amount of information that could either help or hinder the OODA process. It can be quite easy to become overwhelmed with irrelevant, or outdated, information. Capturing all this information needs to be a dynamic and collaborative process.
What comes after observe?
Once you feel that you’ve got all the information you need, it’s time to advance to the next stage. You may find that you need to return to the observe stage maybe once or a few times more. Nothing to worry about — information can quickly become out of date if you don’t react fast.
The orient phase will show you how to use that information to your advantage. How to make sense of your observations, challenge assumptions, and align on strategic direction.
Want to turn insight into action? Explore Strategy Cards to structure your next observation session.
