The art of war, dogfighting and business management

How military thinking can help business: Part 1

"...no plan of operations extends with any certainty beyond the first contact with the main hostile force"

Field Marshal Helmuth Karl Bernhard Graf von Moltke - Chief of Staff of the Prussian General Staff from 1857 to 1871

In these early months of 2020, there are hundreds of thousands of businesses around the world whose planning, operations and very existence have been thrown into doubt. Covid 19 has arrived on the business scene like a rampaging Mongol horde. Business, like the 12th century central Europeans overwhelmed by the Mongols, is struggling to find answers. It is fair to say that Covid 19 has become, to many, very much a ‘main hostile force’ referred to by von Moltke. Businesses are now in a war situation. 

This article aims to show how certain elements of military thinking might help business leaders create new ways of responding to this global and entirely unexpected crisis.

I’m looking at a military approach because there is much to be learned from military strategy and thinking. Western military strategists have been honing their thinking for at least 300 years. In fact, many of those strategists relied on much older models. They referenced – and continue to reference – figures like Sun Tzu (~500 BC) and Ghengis Khan (1162 -1227). It’s fair to suggest that Darwinism in military thinking has had many millennia to operate and that much of that thinking is extremely well tested.

At the heart of military thinking is the assumption that we live in an uncertain world. The context of military operational planning is likely to be overthrown by new developments – we expect this. Our ability to deal with these challenges is determined by our willingness and ability to:

• Recognise change
• Re-orient our thinking to embrace the changed context
• Have robust decision-making processes
• Have the will to push through change in our own, or our organisation’s behaviours

OODA

During the 60’s Colonel John Boyd of the United States Airforce created the foundations of what was to become the OODA loop. This was a way in which to understand, codify and train the flexible and fast thinking demanded of combat pilots. It has since been influential in many civilian sectors from legal to big business. It’s origins as a mindset for fighter pilots also makes it an ideal model for SME business leaders where agility, speed and decisiveness are core factors of success.

Underlying all the thinking and procedural structures is this:

“We expect to get caught out and we have planned processes to deal with it when it happens”

It’s recognises that, even with perfect planning, things do not always go well. In fact, as von Moltke recognised, planning can only be guaranteed to get you to the start line in good shape. Thereafter we are confident because we have a process to create a new plan each time things go wrong. 

OODA is described as a decision-making loop:

·      Observe

·      Orientate

·      Decide

·      Act

The truth is that it is actually a series of loops within the overall structure.

Observe

By accurately and continuously observing what is going on in the world, our planning process becomes an open system rather than a closed system. Observing (gaining data) and understanding (gaining insight) are essential in reacting appropriately.

The key to observation is understanding the input information – do we understand how to evaluate the potentially overwhelming set of inputs? Can we make good decisions based on the data that we will use to define our new actions?

Usefully, military intelligence organisations have an approach that puts some structure to this. They categorise information (for the purpose of this thinking information and data are synonyms) based on two sets of criteria:

• The credibility of the source – evaluated on a scale that runs from ‘usually misleading’ to ‘usually accurate’. (There is also the allowance for an ‘unknown’ category and puts this in a box for later discovery. If later discovery provides a clue about the credibility of the source, then it insists that this new knowledge is included in the thinking).
• The credibility of the information - evaluates the credibility of the information itself on a scale from ‘known to conflict with other things we are hearing’ to ‘known to agree with other things we have heard/seen’.

This approach helps resolve the question of noise:signal ratio and allows us to make a reasonable attempt at evaluating the information itself. This is an essential first step towards making use of input and creating insight. Through using these two axes together, a decision maker can choose which information has the most impact on their decision making.

Orientate

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

Sun Tzu

Orientation is key to OODA. Willingness to recognise, challenge and throw out your cultural and commercial icons is vital – to fighter pilots, military strategists and commercial leaders.

To recognise what it is that you’re seeing and what it means to you, you need not only to recognise high value data, you also need to construct the mental models of what it represents. Everybody - to some degree - has a set of mental models in place. At their most simplistic they might be models such as “if prices go down, demand will rise” or “If we’re first to market, we will be at an advantage in comparison to our competitors”. Many of the models we have are more sophisticated than these examples and have many more component dependencies.

Mental models are our understanding of how things happen (as opposed to why.) Not only do they provide the foundation of how we think but they shape the connections and opportunities we see. Models help us define the complex world in understandable and bite sized chunks.

Orientation to new circumstances requires that we are in willing to demolish our existing mental models and recreate new, more valid, replacements. This depends on two things:

• Judgement process – are you making evidence-based judgements or are you relying on what might prove to be outdated operating procedures? ‘We always react in this way’ might be useful, it equally might be completely inappropriate. The key thing is to ensure you are willing to entertain some scepticism about legacy models. Be aware that existing habits/models can become unhelpful dogma.
• Willingness to rebuild models – are you genuinely willing to include completely new ideas if the changing context/information seem to require it?

Effectively orientation is the process of asking ‘what does this mean to me?’ in the context of a number of pre-existing factors:

• Culture
• Your existing analysis and ideas
• Your previous experience
• Your legacy models
• New information already in the organisation

What you believed to be true about these factors may be impacted and will require new mental models to understand the new orientation. The central theme of OODA is the ability to, and fluency in demolishing existing mental models and building new replacements.

“Orientation isn’t just a state you’re in; it’s a process. You should be always orienting”

Colonel John Boyd, USAF

In the longer term you can get better at orientation. It requires a continual practice of thinking about mental models and going through the OODA process. Look to unusual sources and references for your models. This article is focused on military influences. Boyd himself looked at Maths, Biology, Thermodynamics, Psychology and many other areas when developing the thinking. The skill is to hang your experience on a latticework of models from various sources. The more models you have to hand, the more likely it is that you’ll find something appropriate when you have an urgent need to create new models for your business.

Outcomes from orientation:

• I will have a better understanding of how the things I have seen challenge or support the existing view I had of my business
• Where the facts challenge that understanding, I will have gone through a process of creating new mental models (and from them business models)
• Through being willing to challenge orthodoxy and legacy I will have been open minded and willing to accept difficult new ideas
• The more closely I can align the new models with the evidence, the more likely it is to see clear courses of action
• I will be left with a limited choice of equally well supported options
• I will have gone through this process as quickly or as slowly as time allowed
• I accept that I should continuously repeat this phase

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

Sun Tzu

Decide

If you have gone through Observe and Orientate with sufficient rigour you should have a number of well-formed choices. These will exist as either new models or as sets of desired outcomes.

The preceding process will not create perfect models. Partly because we can never have perfect inputs and partly because all situations are constantly changing and evolving. Thus the decision maker will decide upon on course of action that is inevitably good rather than one that is perfect.

It is, perhaps, indicative of a fighter pilot mindset that the OODA loop sees the decision phase as being short, inevitable and not open to doubt. Other military processes look at this stage in more detail and I shall be covering them in other articles.

Decide quickly. A habit of regular decision making is always better than a habit of no decision making. Some of your decisions may be wrong – OODA allows this to be corrected. Not making a decision is always wrong.

Outcome -  a decision!

“A good plan violently executed now is better than a perfect plan executed next week”

General George S Patton

Act

OODA sees the action and the testing of the thinking as inseparable. The thinking directs that leaders should not get too hung up on validation and testing before committing to a course of action. It also says that the loop is continuous (ABO – Always be OODAing), so observation and orientation might well offer up new evidence and different courses of action.

A/B testing is a good example of OODA in action. The first OODA loop produces the action ‘do A/B testing’ because in this case there are 2 (or more) viable models and the act phase looks to provide data for a subsequent OODA loop.

Again, there are other military processes that look at creating, managing and driving successful action in great detail. Much of this the thinking and processes used at all levels in the military are appropriate for business leaders. This too will be the topic of future articles.

Outcomes –

• Decisive and well-formed actions
• Evidence for next OODA loop
• Feedback for observation
• Information about new interactions with target/audience/customers

“If you're afraid - don't do it, - if you're doing it - don't be afraid!”

Genghis Khan

How to use OODA

OODA is not just about a repeatable process. It makes explicit the ways of thinking that many people and organisations do implicitly. To some degree everybody is practising a form of OODA. If you understand the thinking you can gain an advantage. Use OODA for urgent situations, use it for long term thinking. Use it for small tactical challenges or use it for grand strategy.

Boyd served in Korea with no huge distinction. Nevertheless, by the time he was an instructor at FWS (the USAF equivalent of Top Gun) he was able to use OODA thinking to issue the 40 second challenge. Irrespective of the quality of the student pilots, Boyd claimed to be able to win dog fights within 40 seconds – He seldom lost the bet. Perhaps more significantly, Boyd used the thinking to help shape over 30 years of USAF fighter design, deployment and use.

For business leaders OODA might help you:

Get inside the other party’s OODA – do it faster than your competitors. In fighter terms this is ‘getting inside his circle”. By going through the process faster you place yourself at an advantage.

 Example -  Covid 19 is generating a lot of comment about how inflexible the shared office space owners have been, especially in the light of rapidly changing tenant needs in the lockdown and the likelihood that some of this changed demand will become permanent. OODA thinking might suggest that new mental (business) models are required. If you own a shared space be the first to ask clients and potential clients what they need and what they are going to need.

Be unexpected – in combat terms, part of OODA thinking is to think in terms of changing your opponent’s context and force them to redo their OODA loops through doing the unexpected. This applies in business.

Example – Right now nearly every business is thinking in terms of reducing customer service & communication spend. Legacy mental models suggest the need to rein in overheads in a fragile market. OODA would encourage the questioning of those models. Perhaps the lower levels of CS create a pool of potentially dissatisfied competitor customers, they may feel that in these extraordinary times, extraordinary changes in the customer/supplier relationship are required.

Do the unexpected! Communicate loudly and noisily to those potentially upset customers. Build a different relationship at your competitor’s expense. Be ready with new business models that match the potential post-Covid environment.

Drive tempo in business decision making – by tempo Boyd didn’t just mean speed, in fact what he really was referring to was changes in tempo. Sometimes it’s good to go more slowly when your competitors are expecting speed. But more often the first to go through the OODA loop wins.

Example -  there are a number of cases when new technology providers have had a distinct benefit from be later into a market. ‘2nd mover advantage’ came about where a customer base need to be educated, or where their actual use of the technology disrupted the innovators assumptions. Later entrants were able to launch products and services that were built from new mental models of ‘how this will work’.

Summary

These are difficult times for business – every businessperson knows this. Just as necessity is the mother of invention, crises can be the forge of new ideas, processes and business models.

Businesses are at war

• Businesses can and should learn from military thinking – it is well tested and has a lot to offer. Now is the time for clear-headed – and fast – decisions.
• The OODA loop – Observe, Orientate, Decide, Act – was first created for fighter pilots to allow them to think quickly, but in a structured manner. It was later extended to strategic and civilian thinking and has proven to be a powerful tool to help engender good thinking.
• The OODA loop is a well-proven framework for structuring thinking – but encourages thinking ‘outside the box’.

Observe – understand your data

• Our view of the world is imperfect but understanding the input information that we use to make decisions is vital. Look at the information (data) you have to hand, are you aware of the quality of the data itself or the source of the data?
• Apply a quality standard to data before you use it.

Orientate

 A key part of the thinking is understanding, then challenging our existing mental models. It’s useful to have a store of models from a variety of sources to aid this process of deconstruction and rebuilding.

• Be aware of all the legacy mental models that you and your organisation have – be ruthless about those that are no longer justified by the data.
• Through being willing to challenge orthodoxy and legacy I will have been open minded and willing to accept difficult new ideas.
• The more closely I can align the new models with the evidence, the more likely it is to see clear courses of action.
• Orientation should be an ongoing process and each particular iteration should be as long or a s short as is demanded by the circumstances.

Decide

• Observe & orientate phases will deliver clear options.
• Decide quickly.

Act

• In OODA the actions and testing are synonymous – each new action should trigger more data and a new OODA loop.
• If the outcomes from observe and orientate are not clear then ‘testing’ is a legitimate decision – but don’t let this become mistaken for definitive action.

How to use OODA

• OODA can be used in every circumstance from minor tactical issues to creating a grand strategy in every instance the aim is to give you a competitive advantage.
• Do it faster, more aggressively and produce unexpected decisions. These are the ways you will beat your competition.

DON’T GET SHOT DOWN.