BeyeNetwork Article

Business intelligence and the OODA loop

Dr. Ramon C. Barquin, BeyeNetwork Contributor

This article originally appeared on the BeyeNETWORK

Supposedly he never lost a dogfight, and his nickname – "40 Second" Boyd – said a lot about his approach to being a fighter pilot in the U.S. Air Force in the early

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1950s. Starting from a tactically disadvantageous position, he could usually have his jet on an opponent’s tail in 40 seconds or less. But this would not be John R. Boyd’s most important legacy, nor would the fact that he’s considered by many as the father of the F16. No, John Boyd’s most enduring legacy is the OODA Loop.

The military has always had intelligence as a primary task. To them, the term business intelligence is clear; it means obtaining as much understanding as possible about the enemy, the environment, their own troops, weather conditions, ordnance, etc. in order to have a better base from which to make decisions. Col. John Boyd’s experience as a fighter pilot taught him that in combat, one needs a fast surefire way of making actionable decisions that allows you to beat the enemy. Hence, the birth of the OODA Loop.  

OODA stands for: Observe – Orient – Decide – Act. Boyd postulated that decision-making happens in a cycle dominated by these four principal activities: Observe-Orient-Decide-Act. He thought that any entity that could execute the cycle more quickly than an opponent is able to "get inside" the enemy's decision cycle and gain a competitive advantage. He believed that this was as true for an individual as for an organization. 

While it was developed for the military and this has been its most common environment of use, it has also been applied frequently in the private sector because of its common-sense approach to making decisions. Ultimately, OODA is shorthand for what we practitioners of business intelligence know as: gather your data, analyze it, make your decision and execute it.

It is interesting to drill down into Boyd’s OODA “diagram,” since it is here that he provides the details most relevant to his approach.

In observe, one is supposed to look for outside information about the environment, the opponent, and any specific “unfolding circumstances” that are relevant. These feed into the orient phase, where previous experiences, cultural traditions, heritage, genetics, and other factors are analyzed and synthesized in order to gain one’s bearings. The results feed back to the previous phase, but also forward to decide, where a negative outcome feeds back to observe and orient, but a positive one moves us into action.

We can think of many examples from the military, but likewise we are constantly seeing OODA play out in sports. The duels between pitcher and batter in baseball, the play calling of a star quarterback on the football field, or the smaller, quicker player outmaneuvering the taller less nimble one on the basketball court are all examples of “getting inside an opponent’s OODA cycle.”

In business, we have many instances of such competitive actions. See, for example, the offerings and counter-offerings surrounding the “New Coke” announcement, the advertising ploys of Apple against IBM first – and now Microsoft, and the positioning around the “hybrid” automobile models of the last decade.

Any enterprise must function as a web of interacting and intermeshing OODA loops, since these are nothing but simplified statements of how human beings make decisions. In an organization, some of these OODA loops are tactical and some are strategic depending on where and how they actually sit or are applied.

Observation: Identify your sources; extract and gather your data; profile and audit what you have to understand it better; enrich it with any other relevant data that you may have. Do all this as part of “observe”: to watch carefully, especially with attention to details or behavior for the purpose of arriving at a judgment; to come to realize or know especially through consideration of noted facts.

Orientation: From “orient” meaning “east” or where the sun rises. This is very much about getting your bearings. Here one must take the data obtained in observation and apply the algorithms and methodologies of business intelligence in order to have the best possible positioning for the next, “decisive,” phase. Orientation is the compass task; hence: “to set right by adjusting to facts or principles; to acquaint with the existing situation or environment.”

Decision: This, we know, is about choosing a course of action. And we are much more likely to select a better course of action when we have analyzed the available information that is relevant to that situation. But decision-making still happens in our heads. It may be informed through our business intelligence activities, but it is still an intellectual pursuit. It was Freud who said, “Thought is action in rehearsal.” Well, ultimately we have to move to action.

Action: An act of will, a thing done. This is the objective of the previous phases. OOD must lead to A, otherwise it is purely a wasted exercise. Action is what thought was practicing for. And, it is by action that we are measured, not by how well we observe or orient, but by the results of our performance. It is in action that combats or markets are won or lost; it is action that is celebrated by victory or mourned by defeat.

As we start planning our business intelligence environments of the future, keep very much in mind Col. John Boyd and his OODA loop.

Dr. Barquin is the President of Barquin International, a consulting firm, since 1994. He specializes in developing information systems strategies, particularly data warehousing, customer relationship management, business intelligence and knowledge management, for public and private sector enterprises. He has consulted for the U.S. Military, many government agencies and international governments and corporations.

Dr. Barquin is a member of the E-Gov (Electronic Government) Advisory Board, and chair of its knowledge management conference series; member of the Digital Government Institute Advisory Board; and has been the Program Chair for E-Government and Knowledge Management programs at the Brookings Institution. He was also the co-founder and first president of The Data Warehousing Institute, and president of the Computer Ethics Institute. His PhD is from MIT. Dr. Barquin can be reached at rbarquin@barquin.com.

Editor's note: More government articles, resources, news and events are available in the BeyeNETWORK's Government Channel. Be sure to visit today!


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