The OODA loop (for observe, orient, decide, and act) is a concept originally applied to the combat operations process, often at the strategic level in military operations. It is now also often applied to understand commercial operations and learning processes. The concept was developed by military strategist and USAF Colonel John Boyd, as explained below.
“Create tangles of threatening events and repeatedly generate mismatches. Disorient his mind. Disrupt his operations. Overload his system.
Get inside your adversary’s observation-orientation-decision-action loops (at all levels) by being more subtle, indistinct, irregular and quicker – yet appear to be otherwise.
Stretch out your opponent’s time to respond while compressing our own response time.”
It is an excellent tool to ensure a quick and efficient decision making process. It is made up of four areas that continually link back to each other. Similar to the PDCA process, it is based on a looping-cycle for continued improvement and the ability to “get inside your opponent’s loop”.
Observe the environment, which includes himself, his opponent, the physical, mental and moral situation, and potential allies and opponents
Orient to decide what it all means (many sided, implicit cross-referencing) involving the information observed, one’s genetic heritage, social environment, and prior experiences, and the results of analyses one conducts and synthesis that one forms
Reach some kind of decision
Attempt to carry out the decision, that is, act
The same cycle operates over a longer timescale in a competitive business landscape, and the same logic applies. Decision makers gather information (observe), form hypotheses about customer activity and the intentions of competitors (orient), make decisions, and act on them. The cycle is repeated continuously. The aggressive and conscious application of the process gives a business advantage over a competitor who is merely reacting to conditions as they occur, or has poor awareness of the situation. You need to gather the data, analyze it, synthesize it and then make strong decisions. From repeated practice analyzing the markets and competition (through Situational Analysis I, customer visits, etc.) intuition will become a strong asset within this process and allow for quicker decision making.
The approach favors agility over raw power in dealing with human opponents in any endeavor.