All of us, without exception, would love to tame the future and tilt odds in our favor all the time. This lofty aspiration and our incessant effort toward making right choices is what sets us apart from animal species. Decision making is a basic cognitive process of human behavior. Far from perfect, our prowess for decision making stands exposed more than ever in the hyper connected and rapidly changing world we live in.
Decision Intelligence: How can it help?
There is hardly any organization today that does not aspire to power their decisions and actions with intelligence. Enough evidence exists that those who can harness their organizational intelligence and align it to desired outcomes accrue a substantial advantage. Over the decades of automation, significant strides have been made in codifying human experiential knowledge as well as extracting hidden knowledge from transactional data footprints.
The purview of decision intelligence is to explore outcome-focused and human-in-the-loop approaches to decision automation. A decision intelligence system is a man-machine collaborative system designed to enable and mature decision-action capability in an organization. A decision intelligence system plays a dual role:
The methodical design of a decision intelligence system must hinge around a framework — a mental model of decision making. The framework not only helps in defining scope and boundary of the system but determines the extent to which the system can be useful and in what situations.
A Story
In 1961, Col. John Boyd wrote "Aerial Attack Study”, which spoke about the best dogfighting tactics. In dogfights (close-range aerial battles), fighter pilots need to move at high speeds, avoid enemies while tracking them and keeping a contextual knowledge of objectives, terrains, fuel and other variables. His OODA loop was a concept designed for rational thinking in such chaotic situations.
He said that ambiguity will always be there. Our inability to properly make sense of our changing reality is the bigger hindrance. When circumstances change, we often fail to shift our perspective and continue to try to see the world as we feel it should be. Most important thing is to orient - be connected to reality and act accordingly.
The OODA Loop
The OODA loop
(Observe, Orient, Decide, Act) is a four-step approach to decision-making that
focuses on filtering available information, putting it in context and quickly
making the most appropriate decision while also understanding that changes can
be made as more data becomes available.
The strategy is applicable at an individual level as well as an organizational level. It is particularly useful in scenarios where competition is involved and where the ability to react to changing circumstances faster than an opponent leads to an advantage. Many modern environments can be described as volatile, uncertain, complex and ambiguous, or VUCA. Surviving and winning in this type of situation rests upon making better decisions. However, improving the quality of decision-making is something most organizations fail to do.
For example, if a company continues to make choices that do not see a positive return, they are failing to learn from their experiences. The OODA loop acknowledges this habit and provides an approach help make improvements.
OODA Loop Related Terminology
Before the OODA
loop can be fully understood, a few related concepts need to be introduced
which will aid in understanding it better:
1) Maneuver warfare- This is a strategy used in the military
that emphasizes disrupting the enemy’s decision-making skills in
order to defeat them. Maneuver warfare revolves around the ideas of surprise
and deception. The concept of the OODA loop was derived from the strategy of
maneuver warfare.
2) Mental models- These are representations or explanations
of human behavior that exist on a personal, internal level. A person can
generate a mental model to understand their thought processes, decisions
and consequences. Mental models are a part of the orientation step of
the OODA loop.
3) Situational awareness- This is the comprehension of all
environmental stimuli. It involves perceiving all components of a
situation, understanding what they mean and using them to make future
judgements. Achieving situational awareness is crucial for most decision-making
processes, including the OODA loop.
4) Reaction time- This refers to the time that elapses between a stimulus and the response given to that stimulus. A primary goal in the OODA loop is to minimize an individual or organization’s reaction time.
How The OODA Loop Works: The Four Steps
Similar to
other problem-solving methods, the OODA loop is an interactive, iterative
process that entails repeating the cycle, observing and measuring results,
reviewing and revising the initial decision and advancing to the next step.
While the process is not always simple or linear, the four separate steps
involved may be explained in organizational context or individual context as
follows:
1) Observe: The first step is to identify the problem or threat and gain an overall understanding of the internal and external environment. In the corporate world, this can be equated to data gathering, where all information on the situation (organizational state, competitors, market, etc.,) is collected. The key point here is to recognize that the world is complex. All data is a snapshot in time and must be treated as such. Therefore, entities must gather whatever information is available as quickly as possible in order to be prepared to make decisions based on it.
2) Orient: This involves reflecting on what has been found during observations and considering what should be done next. It requires a significant level of situational awareness and understanding to make a conscious decision. Since some decisions are unconscious, or instinctual, this step involves considering what and why decisions are made prior to choosing a course of action. When applied on an individual level, this step can be done by creating mental models or mental rehearsal drills to place information into narratives that shape judgement. In organizational applications, situational models can be created with machine learning (ML) tools to identify potential outcomes while removing any bias.
3) Decide: This phase makes suggestions towards an action or response plan, taking into consideration all the potential outcomes. This can be accomplished through meetings or discussions that are focused around creating a roadmap for the entire organization.
4) Act: This pertains to carrying out the decision and related changes that need to be made in response to the decision. This step may also include any testing that is required before officially carrying out an action.
These phases
have been broken out for the purposes of explanation, but in some real world
scenarios they might happen in a fraction of a second. The four steps of the
OODA Loop work together in a cycle.
Success Of the OODA Loop
Factor 01
One key to the success of the OODA loop is to make it as short as possible, minimizing reaction times in high-stakes situations. In the OODA loop’s simplest form, there is only one stimulus and one response, but that is not always the case. Hick’s Law can be applied to the reaction time of an OODA loop that has more than one stimulus or response, stating that when there are multiple options available in response to a stimulus, reaction time is slowed down.
Factor 02
The ability to
make decisions faster than an opponent is important, but it is not only about
speed. Tempo is also critical as the ability to rapidly speed up and slow
down can generate unpredictability. Being unpredictable makes it
difficult for opponents to understand and orientate themselves to what will
happen next. Cycling through an OODA loop with more tempo than an opponent
gives an organization more control of the environment and a better chance of
succeeding.
***To be continued in Chapter 02 (Uses of the OODA Loop, Examples in Business, Alternatives, Decision Intelligence and Technology, Human-Machine Collaboration In Decision Intelligence)
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