With the arrival of new technologies and new industry disruptions, it’s easy for us to feel the pressure, not only to adapt but also to leverage these new technologies in our favor. Industry disruption forces us to confront new challenges and also provides us with an opportunity to carve out innovative success in the face of change.
Even as the complexity of the world continues to accelerate, inaction is a sure way to get left behind.
So, how do we shape our external strategies to leverage the power of uncertainty?
The OODA (Observe→Orient→Decide→Act) loop is an iterative decision-making tool that has been used by companies such as Amazon to disrupt competitors and navigate through uncertainty and change.
For those who are familiar with the OODA loop, you know its potential to revolutionize decision-making and problem-solving. For those encountering it for the first time, get ready to embark on a journey that will transform the way you navigate uncertainty and disruption.
The OODA loop can help us adapt our strategies, respond effectively to challenges, and make better decisions faster.
One of my mentors taught me a phrase that I now use to help orient experimentation in my work. My mentor taught me that our goal for almost every decision should be: “Good enough for now, safe enough to try.”
The OODA loop is a fantastic tool to support that.
I wrote a few weeks back about disruption from AI. Here’s what I said:
External shifts [from generative AI] lead to internal disruptions within companies, necessitating changes in structure and management approaches that are required in response to industry pressures and competitive shifts.
In the face of such a disruptive force, it’s easy to succumb to overwhelm, uncertainty, and a doom-and-gloom worldview.
That’s the first benefit of the OODA loop—it gives you a decision-making framework that helps reduce overwhelm, uncertainty, and a doom-and-gloom worldview.
This is how it works:
- Observe — The first step is to actively observe and acknowledge new data, challenges, or changing conditions. We see what’s going on, whether with our competitors or in the world in general. In this case, it’s that Generative AI has landed on the scene in an easy-to-use and practical way. It is important not to ignore or push away uncomfortable observations.
- Orient — The next step is to orient oneself to the observed information. This involves relating the observation to existing strategies, values, and mental models. It requires updating one’s understanding of the situation and considering how it fits into the overall context. We see what’s out there and what others are saying and doing. We think about our core strategy and how this new technology will affect it.We also draw on our values, our worldview, and our goals. If I run a SaaS company, my reaction to a new technology is going to be different than if I run a law firm that bills clients hourly.
- Decide — Once oriented, a decision is made based on observation and orientation. This decision should align with the goals, strategies, and values of the individual or organization. It should consider the potential impact and implications of the decision. Are we going to train people in a new way? Are we going to shift our billing model? Develop a different kind of product?It’s time to devise a plan.
- Act — The decision is put into action, and the necessary steps are taken to implement it. This stage involves executing the chosen course of action and initiating the necessary changes or measures.
But — recognize that this is not the end of our process.
We immediately begin observing what’s happened in response to our action—so we’re back at the start of the loop right away.
If you are facing impactful challenges and need to make sense of your changing environment, or if you’re someone who’s leading change within your organization, watch the full video: Understanding the OODA Loop, and book a free 30-minute call with me to learn more about how to use this framework to lead change with ease across your organization.