The OODA Loop

The OODA Loop is one of the most valuable – yet poorly understood – theories that exists.

This article is my attempt to explain it using examples from business, the military and sport to demonstrate how universally applicable it is.

History has proven that favourites don’t always come out on top – why not?

Is this simply a question of luck or is there a strategy to winning that can be applied in any circumstance?

I believe that there is – and that the OODA Loop explains it.

Manoeuvre warfare is the principle philosophy behind ‘how we fight’. If I can deconstruct, explain and teach it – you will be able to take this theory and apply it to any situation you find yourself in.

I also want to explain this philosophy to destroy a myth – that military leadership is about command and control and what works on the battlefield does not apply elsewhere. That is simply not true.

Manoeuvre Warfare

Manoeuvre warfare is not new. Decentralised command, surprise and deception have been used efficiently for hundreds of years. Military leaders will have employed certain tactics that ‘stacked the deck in their favour’ and gave them a greater chance of winning. For the most part, they probably would have done this intuitively.

It would take a USAF Colonel called John Boyd to truly develop the concept and the principles of manoeuvre warfare and to shape the philosophy that we know today.

John Boyd was a fighter pilot who liked to win. He was a student of air combat and found that in the Korean War, USAF Pilots flying the inferior F-86 were consistently beating the Koreans in the Mig-15.

The Mig was superior in nearly all of the traditional ways of measuring a fighter aircraft. It was able to climb and accelerate faster and it had a better turning rate. The F-86 by contrast had a larger canopy and a hydraulic control system which meant it could transition from one manoeuvre to another faster – it was more agile.

The results didn’t make sense, US pilots shot down Koreans at a ratio of 10-1, a phenomenal achievement when you consider that they were flying what everyone regarded as an inferior plane.

Why was this happening? How could an inferior aircraft defeat one that was superior by nearly every measurement?

It would be easy to assume that US pilots were better trained even braver perhaps but this wouldn’t explain the size of the ratio. Boyd continued to research this issue and developed a theory called ‘patterns of conflict’ that is the foundation of manoeuvre warfare.

Patterns of Conflict – The OODA Loop

Conflict can be seen as a series of decision-making cycles.

In the simplest format, we observe a threat, orientate ourselves to deal with it based on a mental model that is constructed from our experience, make a decision and do something. This then starts again as our action changes the situation.

The faster that you can cycle through this loop, the more control you will exert on a given situation. The reason for this is that the faster you make decisions, the more control you have over the environment. By the time you opponent is starting to act, you have changed the environment by doing something to it.

This causes your opponent to panic as they loose control of the situation – and it is compounded the faster you cycle through the OODA Loop. A panicked opponent is one that will freeze and can therefore be defeated with little cost to you.

That’s the simplest explanation of the OODA Loop.

But it is actually far more complicated than that and Boyd would get frustrated if the cycle was simplified any further than the diagram below.

The reason for this is that the simple OODA gives you four things to consider – four steps. Naturally, it is easy to assume that each of the steps are equal in weighting. This is false – and the greatest misconception that surrounds this theory.

The Observation and Orientation phases of the loop are the most important. Making decisions and then acting upon them is comparatively quick and easy. The better you can observe and orientate yourself, the better the decisions and actions you can take leading to a better result.

Observation is about being able to see clearly. What is going on in front of you? What patterns are being created that are likely to continue.

In our world and on a grand scale these would be things like:

• Baby boomers move into retirement age.
• Internet speeds continue to get faster.
• Technology continues to replace jobs.

The Orientation phase is how you position yourself to take advantage of what you’re observing. How do you set yourself up for success given the unfolding environment in front of you.

This is the most important part of the process because this is where your mental models exist. Your mental models are your automatic thinking pathways that you have developed. You can change them but you have to be conscious that they exist.

The best way I can describe a mental model is one that I was taught by my parents. When I was at school my parents taught me to work hard. Working hard leads to success is a mental model that I exists within my head.

But if I am trying to execute a flawed business plan – it doesn’t make a difference how hard I work. This is an example of where the model is inappropriate for the situation.

Mental models and thinking patterns are developed and nurtured by the material you take onboard.

In the same way that a poor diet will lead to poor athletic performance, if you don’t read or take on material that shapes your thinking – you will limit your ability to orientate yourself for success.

Imagine you’re at a crossroads in your life and you want to some advice.

Sarah reads broadly. She has read over 10,000 books and watched less than an hour of reality TV. Mark doesn’t read. He relies on his experience to provide advice and spends his spare time watching reality TV.

Whose advice would you rather have?

I appreciate that the example is simplistic but it makes the point. Sarah is better able to orientate herself towards the future. She is proactive in her learning allowing her to build and break her mental models for the situations she faces. Mark is reliant on his experience which significantly limits his ability to orientate to his future challenges.

The point I am making here is that ‘self-development’ and lifelong learning have a compound interest effect which you are able to leverage against your future challenges. Ben Franklin talks about this with his ‘five-hour rule’.

Investing in your own learning is the most valuable daily habit you can create.

The OODA Loop is heavily weighted towards the Observe and Orientate phases. Never stop Orientating. The decisions and actions you take which decide the direction of your life are entirely dependent upon the quality and quantity of orientation you undertake.

I am now going to explain the theory in detail using historical examples from business, the military and sport to show how universally applicable the theory is.

In all of these cases, the person that was expected to win, the person with ‘the deck stacked in their favour’ – lost.

I hope you find this inspiring because if you can understand and apply this theory, you can turn the odds for whatever you do in your favour.

The F-86 vs Mig-15

Darwin was right. ‘It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.’

The first reason that the F-86 pilots were able to able to defeat the Mig-15 pilots is that they were able to observe the situation better. The F-86 had a bubble canopy whilst the Mig had an enclosed one. This ability to see what was going on meant that they could ‘observe’ the unfolding situation better.

The F-86 pilots were also able to transition between manoeuvres faster than their opponents, they were more agile so they were able to orientate themselves more effectively. These two advantages meant that they were able to get behind their opponents quicker and engage them with guns. When the Mig pilots realised what was happening, it caused them to panic which made it easier for the F-86 pilots to get into position for a kill shot.

Put simply, the ability to observe and orientate better than your opponent will lead you to make better decisions. Better decisions lead to wins.

Traditional aircraft design dictated that if it is faster and more powerful, can fly higher and further than it’s predecessor, it was ‘better’. You can imagine defence contractors selling the aircraft to the pentagon with all these new and improved features proving that it was better than the last model.

But no one was looking at the statistics and talking to the pilots. What the pilots wanted were ‘go-carts’. Small, highly agile aircraft with large canopies.

If they had these, they could get behind an enemy plane and shoot it down faster.

I don’t want to step away from the focus of this article but it is worth mentioning that a principle of Lean Manufacturing is to ‘find out what the customer wants, and give it to them.’ Talk to the end-user and ask them what they need. Don’t build products based on flawed assumptions or rubbish data.

The Rumble in the Jungle

Look for patterns of behaviour based on known strengths – how can you break your opponents will to fight?

When Muhammed Ali fought George Foreman in the Rumble in the Jungle. He knew that George was a bigger, stronger hitter who had bullied many of his opponents into submission. This experience created a mental model in the minds of both fighters.

From Foreman’s perspective, it had always worked so why wouldn’t it in this fight?

Foreman’s game plan was going to bludgeon Ali into submission. Ali was lighter, there was only going to be so much of this punishment that he could take.

Ali could rely on Foreman to come out swinging. This mental model had worked for him every time so far – why wouldn’t he use it again?

What Ali did was a brilliant example of exploiting the OODA Loop. Ali knew that Foreman would come out swinging. When he did, he rocked back on the ropes and absorbed the heavy punishment. After a few big hits, he asked Foreman ‘is that all you’ve got?

This had probably never happened to Foreman before, no one would have asked him if ‘that’s all he’s got?!’ He kept going, throwing big punches and using the same tactic that had always worked for him. Ali waited and absorbed the beating – and then as Foreman was starting to tire, he started to fight back.

By this stage Foreman was exhausted and could barely defend himself. Ali won and the rest his history.

Did Ali use the OODA Loop consciously? Probably not.

But if we look at the build-up to the fight and Ali’s use of the ‘rope-a-dope’ strategy, you can see that he used the OODA Loop effectively to defeat an opponent who was the clear favourite.

Fischer vs. Spassky 

Use deception – get your opponent to build mental models based on flawed assumptions

I was listening to an episode of the Tim Ferriss show recently (Episode 219, c.26mins) when I heard a story that brought the OODA Loop to life in another very different context.

Bobby Fischer was an American chess prodigy who conducted the longest ‘con’ in sports history. A ‘con’ is when you deliberately play a game or behave in a way that makes you look weaker than you actually are.

Fischer always started his chess games by moving a pawn to king four. He had a very limited opening repertoire and from the ages of 12 to 29 he used the same opening moves over and over again. I believe that there were two reasons for this.

Firstly, if you always start from a position of weakness, you get pretty good at fighting back. If you started every football game with a handicap of 1-0, you’d have to learn how to attack and score consistently. I believe Fischer was teaching himself to do this by creating his own position of weakness.

The second reason is that at this time, the Russians were dominant in Chess. In the build-up to the World Championships, Boris Spassky was supported by a group of Russian chess experts who studied Fisher’s game looking for patterns and ‘recipes’ that Spassky could learn to defeat.

Fischer probably knew that this was happening. By the time the match was played, the Russians and the Americans were engaged in the Cold War. Any opportunity to beat the other would have been seized upon as a way of proving the strength of their political systems. Fischer knew that the Russians would throw resources behind Spassky – it was a sensible assumption based on his observation of what the Russians had done in the past.

When the World Championship final came, Fischer used a completely different set of opening moves. He used moves that he’d never used before. The mental models that Spassky had built based on Fischer’s past performances were suddenly irrelevant.

This would be like a heavyweight boxer preparing to face an opponent that was right handed. He would have chosen his sparring partners and developed his training plan based on the fact that his opponent had an orthodox stance.

If his opponent steps into the ring and started fighting left-handed, suddenly, all the training and preparation would have felt inadequate.

Psychologically this is incredibly damaging to your opponent. They will slow down as they try to work out what is going on. This gets compounded as they realise what is going on and start to panic.

Fischer used deception to get his opponent to build ‘false models’ for how the game would progress. This strategy allowed him to seize the initiative from Spassky and put him in control of the situation.

Agassi vs. Becker

If you get inside the opponents OODA Loop – protect the position 

There was a recent story about Boris Becker and Andre Agassi which proved that Agassi had got inside Becker’s decision-making cycle.

Between 1988 and 1989, the pair met on three occasions with Becker claiming all the wins. In the eleven meetings that followed, Becker only won one of them.

After they’d retired, Agassi revealed what he’d discovered. ‘When Boris serves, he sticks out his tongue. If it is in the left of his mouth, he serves down the tramlines. If it sticks out to the front, he will serve down the centre.’

Agassi was inside Becker’s OODA Loop.

He had discovered a ‘tell’ – a way of working out what someone is going to do before they do it. This meant that he could prepare himself to react faster than his opponent. He said that later on in his career, the biggest challenge he had was discretion and he had to deliberately let some points go in order to keep it a secret.

If you’ve found an advantage that puts you inside someone else decision-making cycle, you have to protect it.

If you don’t and use the information too much, your opponent will work it out and then change the way they play the game.

When the Allies broke the Enigma code, they sometimes had to let the Germans win. If they had over-used the information and the Germans had changed the code, they would have been back to square one.

If you have managed to create the conditions in which you are in control, protect the advantage. Keep yourself inside your opponents decision-making cycle.

The Public vs. Terrorist on the Train

Seize the Initiative, TAKE control of the situation. If one person demonstrates ‘the will to act, the will to take control’ – it will inspire othersOn 21 August 2015, a 25-year old Moroccan man Ayoub El Khazzani came out of the toilets on a train travelling from Amsterdam to Paris. He was armed with an AKM Assault Rifle and 270 rounds of ammunition. A passenger was heading to the toilet as the gunman exited and tried to restrain him, he was supported by another passenger who tried to get the weapon off the gunman. The second passenger was shot in the struggle. Soon after a group of three Americans, two of them off-duty members of the US Armed Forces tackled and subdued the gunman.

Let’s review this incident through the lens of the OODA loop.

The gunman would have built a mental model for how the attack was going to play-out. He probably thought, ‘as soon as I start shooting, people will start running away and I will be able to chase them’. He was expecting to have the initiative and be in control of the situation.

As soon as he came out of that toilet, a member of the public tried to disarm him. It’s highly unlikely he would have expected this to happen. He was now being taken down a scenario that he had not planned for or expected. His mental model, his expectation of what was going to happen, had been completely disrupted.

Like the Mig pilots in the Korean war, when that happens, it becomes difficult to adjust because you are struggling to take control of a situation you expected to ‘own’. Your mental model and expectations are being shattered.

In this brief moment, the initiative was seized by other passengers who started to overpower the gunman.

This would have happened in fractions of a second but that is all it takes.

Netflix vs Blockbuster

Speed is relative – you just have to react faster than your opponents

This example is very different but it demonstrates the point that speed is relative. In the last example, the passengers had fractions of a second to go through the OODA cycle. In this example, the cycle is the same but perhaps played out over months or years.

Netflix was founded in 1997 by Reed Hastings and Marc Randolph. Initially, the company supplied DVDs by mail. At the time, Blockbuster was the dominant force in the video rental market. In 2002, it could have bought Netflix for as little as $50m but declined.

Netflix has gone from strength to strength whilst Blockbuster has failed.

They both started out with similar business models, Netflix were just better at adapting to the changing world. If you look at what they did through the lens of the OODA loop, you can deconstruct how they were able to change based on what they saw (observed) and how they orientated to it.

Youtube was founded in February 2005 and sold to Google in November 2006 for $1.65bn. The fact that one of the most dominant internet companies made that acquisition strongly suggested that some very clever people believed online videos were going to be popular over the next few years.

That deal was public knowledge – yet not everyone will have ‘observed’ it and considered ‘how does this affect my business?’

Internet speeds were increasing – what new opportunities would that bring?

By February 2007, Netflix had delivered its billionth DVD. It had been spectacularly successful but the Leadership will have accapted that past performance was not an indicator of future success. Netflix began to shift away from a very successful business model towards ‘on demand video streamed via the internet’. Netflix continued to grow as DVD sales fell from 2006-2011.

This is a great example of Orientating yourself towards the future. It was a reasonable assumption to make that internet speeds and therefore download speeds were only going to get faster – it is still a fair assumption. Netflix were able to spot the opportunity that this would bring and orientate themselves and their business model to take advantage of these changes. If they had planned to do this before Google bought Youtube, the acquisition would have reinforced their assumption.

Tempo and Speed

I have deliberately used examples from sport, the military and the world of business to make my points. The reason for this is that if you can find examples from a broad spectrum of environments, then the theory or principle can claim to be universal. It can be applied anywhere.

If you can cycle through the OODA loop faster than your opponent, you will start to change the situation. By the time your opponent catches up, they are already reacting to old information which makes their action inappropriate. As they start to realise what is going on, confusion and panic sets in. It becomes clear that they are going to lose and this breaks their will to fight.

Speed is important but it must not be confused with tempo.

Tempo is the ability to stop and start quickly. If you can speed up and slow down rapidly you will add a new dimension to your unpredictability. This makes it very difficult to take the initiative and seize control from you. It is disorientating.

It is hard to come up with a suitable example to explain this concept. The way I think of it is if you were running away from an attacker and could get into a crowded area, the ability to slow down and reduce your tempo would give you the opportunity to blend in with your surroundings. If your attacker doesn’t know where you are (can’t observe), you can orientate yourself and attack them from behind. Look at any of the Bourne films – his ability to strike and control tempo works pretty well for him.

Continued...

If you’re reading this, you probably read last week’s epic on the OODA Loop – thank you – and I appreciate you coming back to find out how you can best implement this philosophy into your organisation.

Last week, I explained how the OODA Loop works. I talked about the impact of mental models on our decision-making. Mental models are ‘ways of thinking’ that drive our behaviour. It is our ability to challenge, break and rebuild these that allow us to orientate and win in any given situation.

I want to briefly recap on the mental models point because I have had some feedback from some people who would like a few more examples.

Mental Models

Peter Thiel, who founded PayPal and was the first external investor into Facebook is an expert at building and breaking mental models. This is a core principle that has led to his success. One of the questions he often asks is:

If you have a ten year plan and know how to get there… why can’t you do this in six months? 

Tim Ferriss expands on this question…

‘For purposes of illustration here, I might reword (Thiel’s question) to: ‘What might you do to accomplish your 10-year goals in the next 6 months, if you had a gun against you head?’

Now, let’s pause. Do I expect you to take 10 seconds to ponder this and then magically accomplish 10 years’ worth of dreams in the next few months? No, I don’t. But I do expect that the question will productively break your mind, like a butterfly shattering a chrysalis to emerge with new capabilities.

The ‘normal’ systems you have in place, the social rules you’ve forced upon yourself, the standard frameworks – they don’t work when asking a question like this. You are forced to shed artificial constraints, like shedding a skin, to realise that you had the ability to renegotiate your reality all along.’

If you want to get better answers, you have to ask yourself better questions.

These are not the sort of questions that you can consider briefly before moving onto the next email. These require ‘deep thinking space’ – something that is rare in a world where companies live or die on their ability to compete for our attention.

Incremental vs Exponential Thinking

The difference between incremental and exponential thinking is another concept that forces you to think differently. Most people’s think incrementally whereas Thiel’s question forces you to think exponentially.

Peter Diamandis explains this brilliantly in this article which I have copied in below:

As humans we evolved on this planet over the last hundreds of thousands of years in an environment that I would call local and linear.  It was a local and linear environment because the only things that affected you as you were growing up on the plains of Africa was what was in a day’s walk.  It was local to you.  Something would happen on the other side of the planet 100,000 years ago you wouldn’t even know.  It was linear in that the life of your great grandparents, your grandparents, you, your kids, their kids, nothing changed generation to generation.  It was pretty much the same.  You used the same stone tools.  You ate the same animals.  You pretty much lived in the same place. 

Today we’re living in a world that is exponential and global.  Something happens in China or Korea, it affects you in Manhattan literally minutes later, through stock prices, news, whatever it might be.  That’s a global planet we’re living on. The life of your grandparents, your parents, you, your kids is extraordinarily different in every possible way and we know this from going to Best Buy and finding a computer that is twice as fast or four times as fast for the same dollars as you bought it a year or two ago.  So we’re living in a world that’s exponential in that regard.

To give a visualisation of this, if I were to take 30 linear steps, it would be one, two, three, four, five.  After 30 linear steps I’d end up 30 paces or 30 meters away and all of us could pretty much point to where 30 paces away would be. But if I said to you take 30 exponential steps, one, two, four, eight, sixteen, thirty-two and said where would you end up? Very few people would say a billion meters away, which is twenty-six times around the planet.  

That’s the difference between our ability to project linearly and project exponentially. It’s what’s really causing disruptive stress because as humans we think linearly, but the world is changing exponentially.  So a CEO in a company like Kodak or a company in the newspaper industries or the record industry doesn’t see the exponential technology coming out of right field and can put them out of business. Meanwhile you have companies going from zero to billions of dollars of valuation in 16, 18, 24 months that are growing in exponential curves.

‘When you change the way you look at things, the things you look at change’.

Max Planck, German quantum theorist and Nobel Prize winner

If you can break and build mental models, you will find ways to win by ‘re-stacking’ the deck so that it favours you.

The faster someone can cycle through the OODA Loop and or control the tempo – the more likely they are to cause their opponent to panic, creating confusion and disorientation.

So the question becomes – how do we cycle through the Loop faster or control the tempo?

There are three principles that you need to understand and apply in order to be able to cycle through the Loop faster.

Decentralised Command

Only an organisation that is decentralised can have a fast OODA Loop. What this means is that people at the lowest level are empowered to make decisions. They have the best information in front of them because they are closest to the action – they must be encouraged to make decisions. David Marquet explains the impact of this philosophy in this video.

If people have to keep going back up the chain of command for decisions to be made, your organisation will have a slow OODA Loop. As a leader you have to push the ability to make decisions to the lowest possible level.

Anyone leading a team will face uncertainty about the future and there are two ways to deal with this problem. You can either centralise command or decentralise it.

Centralised command involves passing the information up the organisational hierarchy so that decisions can be made and then direction can be given.

This is the way that most businesses function. People on the coalface who are interacting with the customers are not empowered to make decisions – they do not have the authority.

I believe that this is why employee engagement is such an issue.

How can you engage an employee if their Manager ‘thinks’ for them?

Decentralised command involves giving people the space and freedom to make decisions based on the information that they have in front of them.

By giving them the freedom to make decisions, you are giving them responsibility. This encourages people to think about how to deal with a situation in front of them. The impact is that you leverage the ‘combined intellect’ of everyone in your organisation.

It is how we fight…

A Marine in Afghanistan does not ask if he can ‘open fire’ – he makes the decision himself based on the information in front of him. Can you imagine what would happen if he had to radio back to base to engage the enemy?

The enemy would be able to orientate themselves to his position, get in close and kill him. They would be able to cycle through the OODA loop faster and win.

Ritz-Carlton Hotel – Decentralised Command and Customer Service

The military aren’t the only ones that employ decentralised command. The Ritz-Carlton Hotel want to be known for their excellent customer service. The way they build this reputation is by empowering their employees to make decisions. Every employee from the CEO to the receptionist has permission to spend up to $2000 to deal with a customer complaint without seeking permission from a manager.

Take a moment to think about that – every employee has a ‘complaints budget’ of $2000. That’s unbelievable when you consider there are companies that don’t allow people to order stationary without going through procurement!

The reason that they’ve done this is that they really want to be known for exceptional customer service so their leaders give their employees enough control to be able to make this happen. This is an example of decentralised command.

How do you push decision-making into an organisation? 

The first thing you will have to manage is yourself and your leadership team. For many, this will be completely alien to them. Giving control to subordinates will feel like they are creating a culture of chaos – and it will feel ‘wrong’.

They have probably been trained and developed by leaders who expected them to pass decision-making up the chain. Their mental models for how leaders behave have been built in these environments.

I can imagine that it took some real guts for the CFO of the Ritz-Carlton to sign-off on the $2000 complaints budget. I suspect he was probably fearful of uncontrolled spending which is understandable.

But just because someone CAN do something, doesn’t mean that they WILL do something.

There are three elements that need to be in place to create a culture of decentralised command and I have shared an example of how it has been done in an organisation.

Standards

The first thing you need to do is have clear standards. A standard can be defined as the one best way of doing something at a given moment in time. If you don’t have standards, you cannot train anyone properly. Without standards, the quality of your training is variable because it is dependent upon the teacher.

When people are taught how to handle weapons in the Royal Marines. They are taught in line with a standard. You do not teach someone how to unload a rifle the way you think is best. You do it in accordance with the standard. If a better way is found, the standard is updated and shared with everyone. We all move forward together – that is how you create a culture of continuous improvement.

If you look at any high performing industry, you will find standards. Pilots are not taught how to land planes the way that the instructor thinks is best. They are taught in line with a standard and they can either do it or they can’t.

Once you have standards – train people in them and make sure that they are following them.

Trust 

The second thing you need to do is trust your people. This is easier if you have built standards that explain ‘what good looks like’. It makes it easier for your people to be successful because you have made it clear what a good performance looks like and give them feedback based on how they have performed against the standard.

Once they have a pattern of performing to the required standard – you can start to trust that they know what they are expected to do and how to do it.

Trust your people to use their initiative. Set them up for success by giving them clear direction and standardising ‘good’ performance.

Expect Mistakes

Everyone comes to work to do a good job – no-one comes to work to make mistakes.

If you trust your people to make decisions, you have to accept that from time to time they are going to make mistakes. What matters is how you react to them.

If you react negatively – picture a typical executive losing his temper – your people won’t make better decisions, they will just stop making them. The cumulative effect of this is a slower OODA loop which will kill your organisation in the long-term.

People are not zero-defect machines. If the fear of making mistakes is greater than that of exercising initiative, your people will not made decisions. They will not take risks and your performance will deteriorate.

A Practical Example

When Tim Ferriss built his business he was getting overwhelmed with requests to make decisions on behalf of his team. He quickly realised that he was using a large amount of his brainpower solving problems for his team.

He was running a centralised organisation where his ability to think strategically and long-term were being interrupted by tactical short-term requests.

So what did he do?

He instructed his team that if a problem costs anything less than $100 to fix, he didn’t need to know about it. He told them to just make the decision.

Do it, record it and we can review what you did later. This is an example of a Standard and a Boundary. We will talk about boundaries in part three but the point here is that he was making it clear what they could do and what the limits were.

Did it create chaos?

No. 99% of the time, people made the right decision – the one that he would have made. For the small number that didn’t, he was able to talk to them about what he would have done differently and why. It created an opportunity for him to develop his people.

After a while he was also able to trust their ability to make decisions because they’d proven that they were competent in making them. The mistakes made were minor and easy to fix because he reviewed the decisions people made and talked to them about what he would have done differently.

Standards – Trust – Reaction to Mistakes.

Soon, the $100 limit became $500 and then $1000. The review periods increased from weekly, to monthly to quarterly.

Eventually, review periods and limits became unnecessary because he had completely decentralised decision-making into the organisation.

This allowed him to start thinking long-term because it created the space for him to do so. The tactical problems were being dealt with by his people who had been trained and developed to think and make decisions.

This is how the military are able to ‘make things happen’ in the most difficult environments. We standardise and invest time in training our people. We then test their judgement again and again when they’re tired and under pressure. This gives them the confidence to make decisions and act in the most difficult of circumstances.

It is the philosophy for how we win.

If you have liked this article or found it useful, please share it with your friends and contacts. The most valuable transferable skill that veterans have is their ability to think, make decisions and lead under pressure

This article explains how they do it so by sharing it you’re helping them (and me!) out. Thank you!

Last week, I expanded on mental models and explained how you implement decentralised decision-making.

This week, I want to concentrate on focus so that your resources have the greatest possible impact. I also want to explain some simple tools that you can implement immediately to help you get more bang for your buck.

Surfaces and Gaps

If you look at any environment where you are going to compete, there will be surfaces and gaps.

Surfaces are places where your competitors are strong or areas that are difficult to make progress. For example, I could build an ‘online content streaming’ business but this would be a difficult market to crack because Netflix are the strongest players in this space. The resources required to knock them off their perch would be substantial and there is a risk that I would expend vast amounts of cash and energy with little to show for it.

Surfaces require enormous amounts of resources to be overcome. Gaps don’t.

Gaps are places where your competitors are weak or a space that no-one owns. This is why Fintech is a current trend because the scalability of tech has the potential to disrupt the banking industry by doing things more efficiently or effectively. There are ‘gaps’ there.

In the sporting world, the gaps might be weaknesses in an opponents defence. It’s why more and more teams use video analysis, they are looking for patterns of behaviour where gaps exist so that they can exploit them.

Imagine a goalkeeper preparing for the World Cup Final. It would probably be a good idea for him to watch the last 50 penalties that have been taken by their top five penalty takers. There might be patterns in where their opponents place their penalties. If the star striker shot to the left in 30/50 of his last penalties, it might be a good ‘go left’ when they take their first penalty. 

Military Example

In the military, the surfaces are areas where the enemy are strong – or believe they are strong.

During WW2, the Allies put considerable effort into convincing the Germans that they were going to invade Europe by crossing the Channel to Calais. General George Patton was placed in charge of the US 1st Army Group based in Kent. This was an entirely fictional unit comprising of ‘inflatable tanks’ that could be photographed from the air. Rommel was convinced that the Allies would not ‘waste’ someone as brilliant as Patton on a deception plan so the Germans focussed their resources and prepared to defend Calais. If you are going to try and deceive someone, you have to make it credible. Placing a ‘rockstar’ General with a track record of success only makes the deception plan more credible.

Once the invasion was underway, the Allies continued to mislead and deceive the Germans. They even dropped dummy paratroopers (Op Titanic) to convince them that the invasion of Normandy was a feint and that they weren’t landing the main force there. This allowed them time to get their forces ashore whilst the Germans were still convinced that Calais was the target for the main invasion force.

Business Example

In business, you’re not always in direct competition as you are in war but you can still take the principle of surfaces and gaps and apply it to your organisation.

The way I explain this to the Fintechs I work with is as follows:

Amazon didn’t start off by selling everything. They started off selling books. They drove deep into this niche until they became the only place that people considered buying books. I am sure that their leadership were advised to broaden their proposition but they ignored that advice and continued to drive hard into this ‘gap’.

When you are small, you don’t have the resource to be broad. Don’t try to do too much or you’ll achieve nothing. Look at the terrain, work out the surfaces and the gaps. Chose a gap and throw resource behind it so that you become the known expert in that area. Once you ‘own a space’, you can broaden into other areas.

Don’t try to spread-bet. Work out where you can stack the deck in your favour and win and keep doubling down until you do.

Sometimes, a company will create it’s own market and it’s own gap to exploit. Airbnb didn’t have a precedent but the early investors realised that if they could carve out a market and own it, the potential was exponential. They created their own gap and have been exploiting it ever since.

Surfaces and Gaps are Fluid

The concept of surfaces and gaps is fluid. It is not fixed and in a constant state of flux.

The world is changing making yesterday’s surfaces, tomorrow’s gaps and vice versa. That’s why decentralised organisations win – because only a decentralised organisation can react fast enough to exploit a gap before it becomes a surface.

There is a famous TEDx talk by Bill Gross where he talks about the single biggest reason that startups succeed. The answer is timing.

Timing is everything because a brilliant idea executed at the wrong time hits a surface. A brilliant idea at the right time hits a gap and will be successful. That’s why it is notoriously difficult to accurately predict which start-ups will succeed and which will fail.

Sport Example 

The Golden State Warriors Basketball Team are another example of a team that have changed the way they play their game to win. They employ a decentralised approach for setting up their attacks allowing their players to make decisions based on where they are on the court. This makes them unpredictable and hard to defend against because they are able to exploit gaps as and when they appear.

Previously, most NBA Teams looked and played the same way. Each team was focussed on a ‘Seven Foot Centre’ surrounded by the traditional positions of power forward, small forward, shooting guard and point guard. They’d become predictable.

The Warriors decided to play the game differently with players who were interchangeable and could play with a high pace and tempo. They also started to make better use of the 3pt line taking more risk but scoring more points in the process.

Their style made them unpredictable and hard to defend against.

How can you set up your defence to play against a team where anyone can attack from any position? This is an example of decentralised decision-making in action. Get the players to think about where best to move to attack. Embrace the unpredictable nature of an attacking run and let them make the decisions themselves.

So What must you do as a Leader?

The first thing you have to do is understand the surfaces and gaps. Don’t just do something because you can – don’t spread bet with your resources.

Work out where the surfaces and gaps are and double down on the gaps.

Place large bets on a small number of logically considered work-streams because it is better to do a few things really well rather than try to do everything and compromise on all of them.

Giving Direction to Subordinates

There are a few tools that you can take directly from the military and implement into your organisation tomorrow.

The first is give people an end-state to work towards. Some might call this a vision or a mission. We define a Vision as a clear picture of the future that is bound by time. If it is not bound by time, it is a wish.

Kennedy’s ‘Man on the Moon’ Vision is the best example.

‘I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth’

JFK – May 1961.

A clear picture of the future that is bound by time.

Give this to your subordinates and then let them work out how to do it. This is important. You need to remain on hand to help and support them but let them do the majority of the work to put together the plan. This will force them to make decisions and use their own creativity and initiative. This develops them which in the long-term benefits them and the organisation as they develop skills in planning and execution.

You can track progress on a performance centre like the one below. This clarifies the vision and shows the ‘golden thread’ ensuring that everyone is working towards the same common end-state.

If you can’t see it – you can’t manage it. Make performance visible.

The following are subtle points but are equally important. They allow people to use their own initiative and work out how they achieve the end-state but with some guidance.

Intent – Tell people what you want to happen and why. Explain why it is so important that they do this.

Main Effort – Assign a Main Effort. What is the one thing that must happen in order to achieve the intent and the vision. What priority needs to be resourced heavily to ensure we achieve it? You cannot have more than one main effort. Two main efforts create indecision. Indecision creates delays which slows down the OODA Loop. Any more than a single priority is a ‘to-do’ list. The main effort can be changed to achieve the intent but it forces leaders to make a decision about what needs to happen.

It takes moral courage to focus strength and resources where they can be most effective rather than trying to be strong everywhere.

We use these terms in the military as it provides a common language that we can all refer to. We all know what is meant by a Main Effort and an Intent.

For Example

Imagine you are in the 14th Century. You need to deliver a message from the King of France to the King of England in London. You have to warn him about an invasion that is coming through Europe and on its way to England.

I have given you the task. You have two days to plan and tell me what resources you need.

The Vision would be something like ‘I need this message to be delivered to the King of England within one month’.

The Intent would be ‘get the message to the King of England’

The Main Effort might be to ‘cross the Channel safely’ because this might be seen as as the riskiest part of the task.

You haven’t been told how to do it or what route to take. You can therefore look at your resources and consider the most effective way to achieve this plan using your own initiative. If you encounter challenges along the way, you know the you need to overcome them to achieve the vision. How you overcome those challenges is up to you and you don’t need to keep coming back to me to ask for help.

It is a really simple example but you can see how decentralised decision-making allows team members to overcome challenges using their own initiative. This pays dividends in the future as the individual is able to think and act for themselves.

Wargaming 

Once the plan has been created – it should be stress-tested using a process called wargaming. This could take many forms but it might involve some questioning along the lines of ‘what will you do if…?’

This is designed to prepare them for scenarios that they are likely to encounter.

For example, if they have thought about how they will handle an ambush and rehearsed what they will do. Chances are they will be in a better place to react if they are ambushed. They will be prepared to act immediately, executing a quick OODA loop because they’ve thought about it beforehand.

Wargaming is a way of mitigating risks and preventing plans from failing. It is directly applicable to business and I have used the technique with Chris Paton to stress-test major transformation plans for Waitrose and the NHS.

If you can’t afford for your plan to fail – he’s definitely someone you should speak to.

https://uk.linkedin.com/in/chris-paton-quirk-solutions

You have to accept that there will be a certain amount of confusion and disorder when executing a plan. Few plans are executed exactly in accordance with the initial plan. They have to change because they are being executed in a world that keeps changing.

Understanding the OODA Loop and the Philosophy of Mission Command

Understanding the OODA Loop and the philosophy of Mission Command is about understanding principles rather than recipes.

Principles are universal and can be applied anywhere. They require a deeper level of understanding.

Recipes are for amateurs. They provide a quick solution that anyone can execute but do not take into account the context so have limited value.

I can’t cook. I can follow a recipe like an amateur but the difference between me and a Chef is that a Chef understands the principles of taste. He can open a fridge, look at what is in there and create something amazing because he knows what foods work together. 

If you can understand the principles behind ‘how the military win’, you can apply them in any circumstance and find a way to win.

Lead by Example 

Firstly, never follow the advice of someone that doesn’t follow it themselves. They either don’t believe it or don’t understand it well enough. Either way – it’s not much good.

So how do I implement this philosophy into my business?

These are just a couple of examples…

Observe – I have become a Techstars Mentor because I want to understand how tech can be applied to solve problems on an exponential scale. I coach the business founders on the Principles of Leadership and high performance and in return I get to observe and understand how they are solving problems and building businesses using technology.

Orientate – Have a learning cycle that you execute as a priority.

Read broadly. Listen to podcasts. Write.

Ingest quality information. Reflect on it. Explain it.

These activities help clarify my thinking and spot themes. They force me to challenge my mental models. Writing helps me to articulate my thoughts. If I can’t explain and convince people of the value of these principles, then I haven’t clarified them enough in my own mind.

I have written 70+ articles now.

If you go back to the earlier ones, they’re a bit ‘preachy’ and don’t necessarily connect with what I do but you have to start somewhere and you only get better with practice.

If I focus on the above two – and these are example of how I do it, my Decisions and Actions will improve because I have spent time developing my knowledge and understanding how the world works.

Investment in these areas – in particular the Orientation – will pay dividends. I am completely convinced of it – that’s why I do it.

If you have found this interesting or helpful, please share it, it helps me get my thoughts out there and I really appreciate it. Secondly, I have started to do more and more public speaking so if you know anyone that is looking for speakers, please don’t hesitate to reach out! Thanks. Rod