The competitive environment has not gotten any easier and change occurs in the business world at an ever-increasing pace. That is why it has become essential to a company's survival and success to be able to respond faster to those changes as well as move quickly to execute its own strategy. As Sun Tzu said, "Speed is the essence of war. Take advantage of the enemy's unpreparedness; travel by unexpected routes and strike him where he has taken no precautions.""
There are several ways to achieve speed; many companies have focused on reducing cycle times in manufacturing, logistics, distribution and product development. These actions all make sense; however, one area that is often overlooked is reducing the decision-making cycle time.
One method of doing so is the concept of OODA Loops. The OODA Loop theory was developed by US Air Force Colonel John Boyd. Colonel Boyd, a jet fighter pilot, military theorist and maverick, developed the OODA Loop concept as a result of his experiences as a pilot in Korea and his later studies of warfare throughout history. First applied to warfare, the OODA Loop concept is also very applicable to business.
"OODA" stands for
-Observation: Sensing and understanding the positions of your company and the competition, as well as the key factors in the environment.
-Orientation: Putting those observations in context and developing courses of action.
-Decision: Deciding on the proper course of action to take.
-Act: Executing your decision.
As this is a loop, after one acts then one must observe the results and go through the cycle again.
Obviously, the faster a firm's leadership can observe, orient, decide and act and make good decisions, the more competitive the company will be. The goal is to move through this process at much higher speeds than the competition, thus forcing them to react to your plans and actions. Therefore, to shorten one's decision-making cycle time one should analyze each step of your own company's current OODA Loop and see where time can be reduced and the quality of information and decision-making improved. Intelligent use of the OODA Loop concept allows one to win at either a tactical or strategic level.
You can learn more about Colonel Boyd and the OODA Loop concept by reading The Mind of War by Grant Hammond or Boyd, The Fighter Pilot who changed the Art of War by Robert Coram.
