Thinking Militarily – The OODA Loop & Dynamic OKRs

Apr 21, 2022
Thinking Militarily – The OODA Loop & Dynamic OKRs

The most common question from the startup world is that “things are too dynamic now”. It could mean many things like no PMF yet, accelerating growth, competition, hiring, fund raising and more.

The words “strategy”, “moat”, “neutralise (competition)”, “capture (market share)” and many more have been derived from military strategies and war context.

Taking a break from Thinking Physics for this post, I wanted to address the question of dynamic goal setting with a military concept called “the OODA Loop”.

The OODA Loop

The OODA loop is an acronym for Observe—>Orient—>Decide—>Act.

This military concept is developed by Hohn Boyd, a U.S. Air Force Colonel.

OODA involves a 4-step process to decision-making in a dynamic environment:

  1. Discern and filter available information
  2. Contextualise the information
  3. Decide on appropriate action
  4. Act with understanding that you can make changes as more data becomes available.

Examples of The OODA Loop implementation

  1. Russia is using OODA Loop in the war against Ukraine. Contrary to what news you are reading, it’s Russia that is one step ahead and taking strategic initiatives whereas the USA, UK and NATO are only reacting to actions taken by Russia.
  2. Microsoft moved to usage based pricing within weeks of Google announcing the same.
  3. For staying ahead of competition, Netflix’s survival method of choice is the OODA Loop. According to Adrian Cocokroft (Director of Cloud Architecture at Netfilx), “Once an opportunity is identified, analyse the problem (orient); plan a response and get buy-in from the organisation (decide); and then implement the new product or feature (act). To wrap up, return to observation and measure customer reaction. If you can do that faster than your competitors, then your competitors can never figure out exactly what you’re going to do next”.

The OODA Loop and Startups

According to Tech-Target, “The OODA loop is a popular business strategy for startup companies as much of their success relies on accepting uncertainty and bracing for competition.”

In a war (especially when there is “fog of war”), taking proactive actions (called “strategic initiatives”) with speed and consistency is the fundamental principle of the OODA Loop.

The consistent ability to take proactive actions or react with speed to changing circumstances leads to competitive advantage.

Like in wars where much of the communication is verbally passed down, many startups (including Series A funded) orchestrate their moves (strategic initiatives) verbally.

The biggest criticism of the OODA Loop framework is that it is too obvious, intuitive and instinctual and that it is a waste of time to explicitly spell out the actions and outcomes expected from such actions.

Hence, most startups do not document their strategic initiatives or reflect on the results from such initiatives or at best document and track such initiatives in spreadsheets.

How OKRs Can Help?

Reflecting on decisions, actions taken and results achieved is an integral part of setting OKRs. Shorter cycle OKRs (monthly or quarterly) along with the scoring & reflection can certainly help startup founders to understand the implications of their decisions better by measuring the results or outcomes from the decisions.

Applying OODA loop, translating decisions & actions into OKRs, documenting these OKRs and analysing results through reflections is an excellent way of coaching the next level leaders in companies that are rapidly growing and for creating a “growth culture” consisting of:

  1. Continuous learning through transparency, inquiry, curiosity.
  2. Safe to experiment environment where even the leadership is personally owning failures or missteps.
  3. Continuous feedback (up, down and across) rooted in a shared commitment to helping each other grow and get better.
  4. Time-bound & manageable experiments with a conscious belief that status-quo is not always good.

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