Are You On An OODA Loop?
During my morning commute last week, I was listening to Reid Hoffman’s podcast - Masters of Scale - where he was interviewing Sheryl Sandberg , the Chief Operating Officer of Facebook. If you’re a business professional or entrepreneur, you may be familiar with Reid’s work as he’s the billionaire co-founder of LinkedIn® and a Partner at Greylock, a leading venture capital firm in Silicon Valley. This particular podcast is an excellent learning tool for entrepreneurs and business professionals who grapple with the concept of achieving the holy grail of scale in their businesses.
In his discussion with Sheryl, he talked about the “OODA Loop” and how in Silicon Valley, the greatest technology companies operate, scale, succeed, and live by this concept. OODA stands for Observe, Orient, Decide, Act and it was developed by a U.S. military strategist and Air Force Colonel to aid fighter pilots in directing their focus and decision-making to defeat their enemies and survive. I liked the idea of business crossing the divide to leverage strategic tools from one of the most successful forces in the world. I immediately became intrigued and started digging into the philosophy on Google once the podcast was over. I read and read, reflected, wrote notes and read some more. I think it’s a beautiful business/life philosophy and while I am not an expert (unless you consider reading Wikipedia, Forbes, Entrepreneur, and similar online sources qualifies me as such) I recommend that every person, irrespective of your industry of focus or level of seniority, start to understand its meaning and application.
The crux is that you must be highly observant and adaptive to your surrounding environment and constantly learn from what’s happening “on ground.” You need to frequently solicit feedback and listen to it. This will create a learning loop that allows you to tweak or discard your prescribed goals/business model and overall rules of engagement to what market reality demands.
I remember when I wrote the business plan for Paloo’s Place®, a unique children’s play and activity center in Lagos, within three months, I realized that I needed to alter several of my planned service options and the pricing menu as customer purchasing patterns turned out differently from my expectations. People didn't want to pay large amounts for annual memberships as I had envisioned. They wanted the flexibility to select programs and pay per use. I had to move beyond my business plan assumptions and follow the fluidity of the market by giving the customer what they wanted. The OODA loop seeks to guide you through how observations about business and surrounding market dynamics, driven by the use of data, lead you to process what is crucial to success. I kept track of what programs people paid for and carefully observed that purchasing patterns were skewed towards the programs I wasn’t focused on. Once you’ve understood where you are, what’s happening within your business and the competitive landscape, you can start to orient yourself through strategic planning. I had to change my entire program and business focus to suit what customers were telling me that they wanted through their payment patterns. Data is a wonderful thing. Once you’ve understood what needs to change and how it needs to change, you need to make fast decisions that align with all of the observations and analysis conducted. Be decisive. You can always change it in your next loop anyhow! Next, you need to act. This is where most businesses and people fail in my opinion. Ideas are a dime a dozen but execution is a rarity. Good luck on your next OODA loop!
