The F-16 fighter jet is, as supersonic military aircraft go, a modest machine. It measures just 49 feet long and 31 feet wide from wingtip to missile-capped wingtip, and it weighs about half as much as its U.S. Air Force predecessor, the F-15. With a top speed of 1,350 MPH, it lags the F-15 and other big planes. It can't fly as high or as far. But in battle, the F-16 defies physics. Its design allows extreme maneuvers, even at low speeds. It dumps and regains energy in an instant, and despite its light weight, it can withstand nine times the force of gravity -- which enables some serious twisting and rolling. Pilots jag and flip with subtle nudges to a sensitive electronic flight-control system. The plane is unthinkably agile. Picture a young Michael Jordan with 29,100 pounds of thrust.
Now think of your company: Is it an F-16 or an Aeroflot turboprop? In business, success isn't simply a matter of being quickest to market, of spending the most, or of selling the highest-quality products. You can win by using any of those methods but only if you do one thing more: Outmaneuver the other guy. You have to decode the environment before he does, act decisively, and then capitalize on his initial confusion by confusing him some more. Agility is the essence of strategy in war and in business.
John R. Boyd knew this. He knew it instinctively in the early 1950s when, as a young U.S. Air Force fighter pilot -- cocky even by fighter-pilot standards -- he issued a standing challenge to all comers: Starting from a position of disadvantage, he'd have his jet on their tail within 40 seconds, or he'd pay out $40. Legend has it that he never lost. His unfailing ability to win any dogfight in 40 seconds or less earned him his nickname: "40 Second" Boyd.
Boyd applied his intuitive understanding of energy maneuverability to the study of aeronautics. In the 1970s, he helped design and champion the F-16, an aluminum manifestation of everything he knew about competition. Then he focused his tenacious intellect on something grander, an expression of agility that, for him and others, became a consuming passion: the OODA loop.
Observation; orientation; decision; action. On the face of it, Boyd's loop is a simple reckoning of how human beings make tactical decisions. But it's also an elegant framework for creating competitive advantage. Operating "inside" an adversary's OODA loop -- that is, acting quickly to outthink and outmaneuver rivals -- will, Boyd wrote, "make us appear ambiguous, [and] thereby generate confusion and disorder."
The product of a singular, half-century-long journey through the realms of science, history, and moral philosophy, Boyd's ideas both augment and challenge conventional thinking about organizations and conflict. Boyd himself, a cigar-smoking maverick, enjoyed distinctive unpopularity in official Pentagon circles. But even among critics, his OODA loop was much harder to dismiss.
The concept is just as powerful when applied to business. The convergence of rapidly globalizing competition, real-time communication, and smarter information technology has led to a reinvention of the meaning and practice of strategy. What do you do in the semiconductor industry and other sectors where the time advantage of proprietary technology is collapsing even as the cost of developing it explodes? Companies in manufacturing, telecommunications, retail -- in nearly every business -- are discovering that fashion, fad, and fickle customers require constant vigilance and adjustment. We operate in a video-game world where time is compressing, information goes everywhere, and the rules of the game change abruptly and continuously.
All of which makes the OODA loop more powerful than ever. Want to outthink and outexecute the competition in the air or on the ground, in combat or in business? Want to test out new ideas, get feedback from your customers, adjust your product accordingly, and launch a new version -- before your competition even senses the opportunity? Then learn how to make the OODA loop the centerpiece of your strategy process.
The Birth of the OODA Loop
Colonel John R. Boyd retired from the U.S. Air Force in 1975. That he never was promoted to general says much about his tenuous relationship with the military. Though widely acknowledged as a dazzling strategist, his impolitic, in-your-face bravado clashed with the staid Air Force culture. From his cramped second-floor office at the Pentagon, he waged an assault on the military leadership's bureaucracy and corruption that lasted more than a decade.
He spent a lot of that time thinking. He devoured the writings of Heisenberg, Newton, and Sun Tzu and read thousands of books, journal articles, and newspapers. During that period, he came to his idea of the OODA loop and, beyond that, to a sort of unified theory of competitiveness.
The world knows relatively little about any of this, in part because Boyd refused to write much down. He insisted on presenting his thinking in a 14-hour briefing titled "A Discourse on Winning and Losing." He was a striking speaker, witty and vigorous. But the 300-odd typewritten and hand-sketched pages of overhead slides that survive him are not especially compelling. The single work that he committed to paper before his death in 1997, a 12-page treatise called "Destruction and Creation," is daunting. "It's got the specific gravity of uranium," observes writer Robert Coram, whose biography, Boyd: The Fighter Pilot Who Changed the Art of War (Little Brown), will appear in November.
"Boyd was a difficult man," admits Franklin "Chuck" Spinney. It has fallen to Spinney to parse, smooth, and preach Boyd's gospel. Spinney is an unapologetic disciple: He worked with Boyd for more than two decades, and he shares his mentor's brusque manner and healthy disregard for nearly everything official. Like Boyd before him, Spinney is a professional irritant at the Pentagon, disliked by many military leaders but secure in his position, thanks to his unique talent and his many political connections. He toils in Boyd's old office.
"Have you seen the thought experiment?" Spinney demands, hopefully. The best response is "no" -- because in Boyd's absence, the experiment and Spinney's own oral presentation, "Evolutionary Epistimology" (accompanied by PowerPoint slides instead of overheads), may be the only reasonable way to come to terms with Boyd's often tortuous thinking.
On to the experiment. Imagine four scenarios: someone skiing, someone power-boating, someone bicycling, and a boy playing with a toy tank. Break down each domain into its component parts: For skiing, there would be snow, chairlifts, skis, hot chocolate, and so on. Within their domain, the parts have directly identifiable relationships with one another. But scramble together the parts from the four domains, and suddenly it's hard to determine any relationships at all. We are thrown into chaos.
Now, Spinney instructs, take one part from each scene: From skiing, select the skis; from power boating, the motor; from bicycling, the handlebars; and from the boy with his toy tank, the treads. What do these elements have to do with one another? At first, seemingly nothing -- because we still think of them in terms of their original domains. But bring the parts together, and you've used your creative pattern-recognition skills to build ... a snowmobile! "A winner," Boyd concluded, "is someone who can build snowmobiles ... when facing uncertainty and unpredictable change."
The Uses of the OODA Loop
This kind of stuff generally ticks off actual fliers, who proudly proclaim themselves "dumb fighter pilots" and tend to shun anything that smells of intellectual extravagance. "I've never been inside anyone's OODA loop," Major Chris Peloza says dryly, rolling his eyes. Peloza has flown F-16s in the Air Force and the Air National Guard for 16 years. He's never heard of Boyd, and he doesn't know what OODA stands for.
But he knows exactly what it means. An effective pilot explodes his rival's comfortable view of the universe. With his familiar clues hopelessly scrambled, a rival under pressure will usually try to interpret the mess from his accustomed perspective. While the confused rival struggles -- and before he has a chance to figure out the pattern that will yield the dogfight equivalent of a snowmobile -- the savvy pilot quickly executes yet another set of maneuvers, once more scrambling the parts and further feeding his opponent's confusion. Ultimately, Boyd wrote, the winner "collapses his [adversary's] ability to carry on." You win the competition by destroying your opponent's frame of reference.
Boyd most often couched this phenomenon in a military context. His monumental research and reading let him draw from such strategies as the Battle of Marathon (Greece versus Persia, 490 BC) and Napoleon's tactics at Waterloo. Germany's blitzkrieg method in World War II led the country to "conquer an entire region in the quickest possible time by gaining initial surprise and exploiting ... fast tempo/fluidity of action ... as basis to repeatedly penetrate, splinter, envelop, and roll-up/wipe-out disconnected remnants of [the] adversary organism."
"In Boyd's notion of conflict, the target is always your opponent's mind," says Grant Hammond, director of the Center for Strategy and Technology at the Air War College and author of The Mind of War: John Boyd and American Security (Smithsonian Institution Press, 2001). In his own work, Boyd didn't apply his principles to business strategy and market share, says Hammond, "but the analogy still holds. It's all about rapid assessment and adaptation to a complex and rapidly changing environment that you can't control." In fact, Boyd's ideas translate seamlessly into business. In a groundbreaking article published in 1988 in the Harvard Business Review titled "Fast-Cycle Capability for Competitive Power," Joseph L. Bower of Harvard Business School and Thomas M. Hout, a partner at Boston Consulting Group, actually cited the OODA loop -- although not its author. (Years later, Boyd called Hout to rectify the oversight.) "The OODA loop limbers up your organization," Hout says now. "It keeps you constantly worried about the next cycle," about making rapid, incremental improvements that throw off competitors.
Bower and Hout's classic example -- and one that Boyd also studied -- was Toyota, which designed its organization to speed information, decisions, and materials through four interrelated cycles: product development, ordering, plant scheduling, and production. Self-organized, multifunctional teams at Toyota, they observed, developed products and manufacturing processes in response to demand, turning out new models in just three years compared with Detroit's cycle of four or five.
Systems like Toyota's worked so well, Boyd argued, because of schwerpunkt, a German term meaning organizational focus. Schwerpunkt, Boyd wrote, "represents a unifying medium that provides a directed way to tie initiative of many subordinate actions with superior intent as a basis to diminish friction and compress time." That is, employees decide and act locally, but they are guided by a keen understanding of the bigger picture.
In effective organizations, schwerpunkt connects vibrant OODA loops that are operating concurrently at several levels. Workers close to the action stick to tactical loops, and their supervisors travel in operational loops, while leaders navigate much broader strategic and political loops. The loops inform each other: If everything is clicking, feedback from the tactical loops will guide decisions at higher loops and vice versa.
Consider this recent event. In March 2000, fire seriously damaged the New Mexico mobile-phone chip factory of Philips Electronics. Nokia reacted immediately, sending employees to help Philips recover, demanding production from other Philips fabs, and seeking out alternative suppliers. Ericsson, supplied by the same factory, sat on its hands -- and lost months' worth of production. Nokia capitalized on Ericsson's disarray by pushing new phones, allowing Nokia to grab even more market share and ultimately forcing Ericsson to outsource production.
Nokia didn't explicitly check through every point in the OODA loop, of course. "That part of Boyd's thinking is very misunderstood -- and Boyd is mostly to blame," says Chet Richards, a Boyd aficionado and strategy consultant. The loop doesn't require individuals or organizations to observe, orient, decide, and act, in that order, all the time. "Going through the cycle every time takes too long," Richards warns.
Think instead of the loop as an interactive web with orientation at the core. Orientation -- how you interpret a situation, based on your experience, culture, and heritage -- directly guides decisions, but it also shapes observation and action. At the same time, orientation is shaped by new feedback. An effective combatant, Boyd reasoned, looks constantly for mismatches between his original understanding and a changed reality. In those mismatches lie opportunities to seize advantage.
And reality, Boyd understood, changes ceaselessly, unfolding "in an irregular, disorderly, unpredictable manner," despite our vain attempts to ensure the contrary. "There is no way out," Boyd wrote. "We must continue the whirl of reorientation, mismatches, analyses/synthesis over and over again ad infinitum." The OODA loop persists endlessly.
The Future of the OODA Loop
John R. Boyd died, says Robert Coram, "believing that people considered him a kook, a man who never made general and whose ideas never gained popular acceptance." His ideas weren't easy to grasp, and most military leaders were loathe to listen to such a source of disruption -- an iconoclast who threatened their comfortable order.
Although the OODA loop and other Boyd concepts are written into Air Force doctrine, Boyd's name is relatively unknown in his own service. Some believe that his influence is waning in the Marine Corps, the branch that once embraced his thinking the most enthusiastically. Among Boyd's old friends and admirers, many of whom gather every Wednesday night at the Fort Myer Officers' Club outside of Washington, DC, some wonder if they are fighting a losing battle. "The group is fading," says Tom Christie, one of Boyd's closest collaborators and now director of operational test and evaluation at the Pentagon. "We're all getting older, and we didn't inculcate John's ideas into younger people coming up."
Yet Boyd's ideas themselves are growing more relevant -- in military operations and in business competition. In the wake of the Gulf War, Pentagon officials credited Boyd's thinking on maneuverability for the rapid attacks that crippled Iraqi forces. Today, many military strategists believe that the way to counter terrorists is to think as they do -- to employ speed, ambiguity, and deception. One way to look at the tragedy of September 11 is that, for a moment, the terrorists got inside our OODA loop.
The phenomenon is magnified by the rapidly declining half-life of any good idea through ever-faster pace and ever-more-demanding dimensions of the competitive arena. The dogfight, it seems, is just getting hairier. So what happens to the OODA loop, some wonder, as technology increasingly compresses the flow of information, driving decision making ever faster? On one hand, observes retired Colonel Ted Hailes, a professor at the Air War College, "in the drive to make OODA loops smaller and faster, man's role in the loop is being reduced or preformulated." Think of program trading on Wall Street, for example. Grant Hammond theorizes about evolution toward an "OODA point."
On the other hand, it may be that technology compresses just one part of the loop, that the wide, instantaneous availability of data creates an environment of complete transparency. In such a world, it would be impossible to gain advantage from observation, since all competitors would see the same thing. Orientation, then, would grow even more important: The data is worthless, after all, without our interpretation. And that means Boyd was more right than even he could have imagined: The future of business will belong to those innovators who can build snowmobiles.
Keith H. Hammonds (firstname.lastname@example.org) is a Fast Company senior editor. Read John R. Boyd's "A Discourse on Winning and Losing" and related works on the Web (www.d-n-i.net/second_level/boyd_military.htm).
Sidebar: How to Isolate Your Enemy
Colonel John R. Boyd saw isolation as a critical strategic device -- in effect, the opposite of the information-rich environment that pilots (or companies) need in order to operate effectively. In isolation, he argued, a competitor had no hope of observing and adapting to a changing environment. Isolating your enemy, Boyd saw, could become a powerful tool to make his OODA loop inoperable, cutting off the flow of information both in and out of the organization. In his 14-hour briefing, "A Discourse on Winning and Losing," Boyd described three strategies for isolation.
"Physically we can isolate our adversaries by severing their communications with [the] outside world as well as by severing their internal communications to one another. We can accomplish [the former] ... via diplomatic, psychological, and other efforts. To cut them off from one another, we should penetrate their system by being unpredictable.
"Mentally we can isolate our adversaries by presenting them with ambiguous, deceptive, or novel situations, as well as by operating at a tempo or rhythm they can neither make out nor keep up with. Operating inside their OODA loops will accomplish just this by disorienting or twisting their mental images so that they can neither appreciate nor cope with what's really going on.
"Morally our adversaries isolate themselves when they visibly improve their well-being to the detriment of others ... by violating codes of conduct or behavior patterns that they profess to uphold or others expect them to uphold."