Chief executives, if they are lucky, rarely need the split-second decision making of fighter pilots, yet, like fighter pilots, CEOs must juggle a lot of interdependent decisions and process with high-stakes outcomes. As with fighter pilots, events facing CEOs arrive fast, furiously, and unpredictably. Time is always of the essence. A decision cycle regime developed for fighter pilots may offer CEOs insights into making sound decisions quickly.
The decision cycle is called the OODA loop, which stands for Observe, Orient, Decide, and Act. The mental model was developed by U.S. Air Force Colonel John Boyd (1927-1997), a fighter pilot and Pentagon strategist, whose theories have been highly influential in the military, business, sports, and litigation.
Boyd’s most well-known contribution to the science of decision-making is the OODA loop, the process by which an individual or an organization reacts to an event. The main takeaway is that the key to victory is to be able to create situations wherein one can make appropriate decisions more quickly than one’s opponent. Boyd developed the OODA loop by participating in and observing air combat between U.S. Air Force F-86 Sabre fighter planes against Russian MiG-15s during the Korean War. Conceiving of the OODA Loop as a cycle is crucial to its understanding.
The events that make up the loop can be described, but Boyd experienced the four parts to be repeated quickly until the conflict is terminated, and one side prevails. Here are the four steps that constitute the OODA Loop.
- Observe. The first step in the OODA Loop is to acquire a comprehensive picture of the situation with as much accuracy as possible. CEOs know how blind they often feel when considering a decision. Often that blindness stems from not too little information, but from too much. A fighter pilot must filter out extraneous noise while focusing on the most actionable and reliable information. That means considering not only the variables affecting the pilot, but considering the variables affecting the opponent. In the same way, CEOs do well to observe not only the information likely to impact their own organizations, but that which impacts competitors, partners, and other stakeholders.
- Orient. The second step is the analysis and synthesis of data to form a prevailing mental model or perspective. Many CEOs skip this step because it is considered “obvious.” But fighter pilots know from experience that skipping this step is risky because the main benefit of the second step in the loop is to recognize the barriers that might interfere with the other parts of the process. When CEOs skip this step, they increase the chances that their decision-making will be compromised by not knowing what they don’t know. Every individual confronting a decision faces barriers of information. Without an awareness of those barriers, the consequent choices will be unreliable. In other words, orienting is all about connecting with context supported by reality. It works to minimize seeing events through filters of stereotypes, assumptions, or confirmation bias. Including this step, rather than jumping straight to making a decision, gives fighters and edge over the competition.
- Decide. Ultimately, every fighter pilot, like every CEO, must make a decision and live (or die) with consequences. Having gathered information and oriented itself, a CEO considers all the options generated by the first two steps and then makes the best decision it can. Whenever possible, Boyd encouraged decision-makers to test their decisions to spot any flaws or limitations and then make adjustments, observing and orientating in the service of better decisions. Boyd warned against first-conclusion bias, the common preference to conclude that our first ideas are the best ones.
- Act. The first three steps are all precursors in support of rationally acting faster than one’s opponents. The other steps are mere precursors to action. A decision made, now is the time to act upon it and consider how effective the decision was. Was the information accurate? Was the context correct? Were the best possible mental models applied? Did the decision-makers get distracted by biases? Did the opponents act as anticipated? Whatever the outcome of the action, the decision-makers quickly recycle back to the first element of The OODA Loop to start observing again.
Whether the decision involves reorganizing, launching a new product, or making an acquisition, the OODA Loop can serve as a valuable addition to any CEO’s decision-making toolkit.