An OODA loop (Observe, Orient, Decide, Act) is a four-step approach to decision-making that focuses on filtering available information, putting it in context and quickly making the most appropriate decision while also understanding that changes can be made as more data becomes available. The strategy is applicable to any organization that faces adversaries or rivals and its effectiveness depends on how fast it is executed.
Now applied to a variety of fields and uses, the OODA loop was developed by the U.S. military to train soldiers to make time-sensitive decisions rapidly when there may not be time to gather all the information. Military strategist and U.S. Air Force Colonel John Boyd developed the concept in the mid-20th century, which he applied to the combat operations processes, often at the operational level, during military campaigns. The goal was to execute the Observe-Orient-Decide-Act process more quickly than an opponent could in order to infiltrate and disrupt the enemy's decision cycle, gaining an advantage.
Outside of the military environment, leaders in other fields, including business, information security, litigation and law enforcement, find the strategy compelling because of its common-sense approach to decision-making and its emphasis on staying competitive. In business, OODA loops typically examine what is happening externally and what happens as a result in order to become more agile. For example, this approach could be applied when a competing organization releases a new product.
How OODA Loops Work
The first phase of the OODA loop, observe, refers to identifying a problem or threat and gaining an overall understanding of the internal and external environment. All decisions are based on observations of an evolving situation influenced with implicit filtering of raw information pertinent to the problem being addressed.
Orientation refers to the monitoring of the outside environment by tallying key performance indicators (KPIs), making predictions and issuing the right alerts to decision-makers. This process requires a combination of software tools (such as inventory and financial software) and human judgment to put the information into context with past experiences and business understanding to effectively predict what to expect next.
After predictions have been made, the decide phase makes suggestions towards an action plan, taking into consideration the potential outcomes. Then, action pertains to the business process management (BPM) and actual changes that need to be made in response. The correct actions may call for process orchestration to control the workflow and trigger the execution of human (or automated activities) at the appropriate time.
Similar to other problem-solving methods, the OODA loop is an interactive, iterative process that entails repeating the cycle, observing and measuring results, reviewing and revising the initial decision and advancing to the next step.