A Guide to the OODA Loop for Decision Making

Being a business leader is not for the faint of heart. It’s a position marked by constant, high-stakes change and complex decision-making. The right decisions could propel a business forward, while a misstep can lead to setbacks or even the prospect of shutting up shop. It’s no wonder leaders want frameworks they can rely on to help them make the tough choices. 

One of those frameworks is the OODA Loop, a decision-making framework that consists of Observe, Orient, Decide, and Act stages. 

Let’s look at each stage more in-depth and show you how to apply this model to your business. 

What Is the OODA Loop?

Created by military strategist and United States Air Force Colonel John Boyd, the OODA Loop’s original purpose was decision-making in combat operations. 

However, it applies in any number of situations because, at its core, the OODLA Loop simply breaks the decision-making process down into manageable chunks, allowing you to act quickly and precisely.

The strength of the OODA Loop lies in its simplicity and cyclical nature:

• Observe: Collect data from your environment. What are the facts, and what do they mean for you and your organization?
• Orient: Analyze the data and position it within the context of your objectives, expertise, and experience. What are the possible scenarios?
• Decide: Based on your observations and orientation, decide on the best action to serve your goals.
• Act: Execute the decision. Then, once that decision changes the environment, you return to the observation stage and continue the cycle.

Step 1: Observe

In the first stage of the OODA Loop, you’re making active observations to understand the nuances of your environment.

Start by collecting any pertinent data. That data will look different depending on the decision you’re trying to make but might include things like customer behavior, market trends, or internal performance metrics. 

Aim for insightful information over sheer volume by prioritizing the data that genuinely aligns with your objectives. 

Step 2: Orient

Next, you need to orient yourself by understanding the full scope of the data and what it means for your particular objectives. You’re setting yourself up for decision-making by turning straightforward observations into actionable insights. 

1. Contextualize the Data: Fit the data into the bigger picture of your business. What market trends might interfere with or support your business goals? Is there stakeholder feedback to take into account? The purpose of contextualizing is to figure out which data points should guide your decision. 
2. Lend Your Expertise: Draw on your professional experience to provide insights about the raw data. 
3. Assess Risks and Opportunities: Consider any potential roadblocks and opportunities arising from your observations. 
4. Identify Your Assumptions: Reflect on any assumptions you’re making about the data and use them to prepare for alternate scenarios. For example, if you’re implementing a new project management software, are you assuming your team will learn it quickly? What happens if they don’t?

Step 3: Decide

The rubber meets the road in the Decide phase, as this is where you– as the name implies– make a decision. Your focus should be synthesizing the insights gained during the Observe and Orient stages and transforming them into a concrete action plan. The Decide phase is also an excellent time to pull in collaborators, as other people will have different perspectives you may not have seen. 

At this point, you’ll likely have several paths you can take. Evaluate the pros and cons of each, keeping in mind your end goal and whether you can overcome the constraints you expect to encounter for each option. It’s also helpful to run some hypothetical scenarios. What would be the outcome if things don’t go as planned? Consider the worst-case, best-case, and most likely scenarios.

Then, it’s time to commit to your decision. Hesitation can often lead to missed opportunities, and you’ve already done your due diligence. If the choice you’ve made has the best possible outcome, then take the leap. 

Step 4: Act

You’ve observed the environment, oriented yourself, and made a decision. Now, it’s time to put that decision into action. The Act stage is the culmination of all your prior efforts, but it’s not the end of the process. Instead, it’s a transition into the next cycle of the OODA Loop.

1. Execute: Start the process of delegating tasks and setting up timelines. Set yourself and your team up for success and ensure you have the necessary resources to execute your plan. 
2. Monitor Outcomes: As you execute your plan, keep an eye on how it’s unfolding. Are things progressing as expected? Are there any unforeseen complications? Constant monitoring allows for timely adjustments.
3. Adapt and Iterate: No plan reaches its conclusion completely unscathed. Be prepared to quickly adapt to new information or scenarios so as not to derail your plan. 

Final Thoughts

Ready to level up your leadership skills? Contact Lori Moen of Catalyst Group ECR for mentorship and executive coaching tailored to your industry and professional expertise. 

You’ll work together to build a toolbox of essential skills, from decision-making to effective communication, so you can accelerate your growth and excel in your career.