Leadership Styles – Autocratic, Laissez Faire, Participative and Bureaucratic
All leaders do not possess same attitude or same perspective. As discussed earlier, few leaders adopt the carrot approach and a few adopt the stick approach. Thus, all of the leaders do not get the things done in the same manner. Their style varies. The leadership style varies with the kind of people the leader […]
Personality and Personality Development – An Overview
Every individual has his own characteristic way of behaving, responding to emotions, perceiving things and looking at the world. No two individuals are similar. You might like going out for parties but your friend might prefer staying back at home reading his/her favourite book. It is really not necessary that if you like partying around, […]
Enterprise Risk Management (ERM) vs Traditional Risk Management
Enterprise risk management (ERM) is a buzzword that has been doing rounds in the risk management field for the past few years. It is often used by managers in a context that implies that it is wider in scope than the traditional risk management function. However, the number of risk management professionals who do not […]
How to build Your Best Team
Group of individuals working together for a common objective form a team. Teams are generally formed to accomplish complicated and difficult tasks. All individuals come together on a common platform and strive hard to achieve the set objective. When individuals work as a single unit towards a common predefined goal, a team is formed. Not […]
Risk Management and Stock Market
In stock market there is strong relationship between risk and return. Greater the risk, greater the return generally! In financial terminology risk management is the process of identifying and assessing the risk and then developing strategies to manage and minimize the same while maximizing the returns. Every investment demands a certain amount of risk and […]
We had discussed how the OODA Loop or the Observe, Orient, Decision, Action loop works in helping to make better decisions. The first and the important thing to remember about the OODA loop is that it is mainly concerned about situations that involve split second decision making.
Considering the fact that it was developed by an Air Force pilot, it is natural that the OODA loop describes decision making in situations that are combat oriented in nature. However, this does not preclude its use in corporate decision making as there are many situations in which the decision makers have to take split second decisions with little or skewed information.
For instance, during board meetings and meetings of shareholders, important decisions and announcements have to be made depending on the exigencies of the situation.
To take an example, during hostile board meetings or meetings of senior management where the decision makers have to confront other managers with competing agendas, they have to react quickly and agilely to ensure that the decision that they take is in the best interests of the organization and its shareholders.
So, the point that needs to be noted is that decision makers in these situations have to assess the opponent’s strategies and strengths and weaknesses and react in a timely and quick manner.
The time between receiving the information and taking a decision is often in the seconds and minutes and hence decision makers have to react quickly to the demands of the situation. Often, this means that decisions have to be made by getting inside the minds of the opponents.
For instance, getting to know what the opponents’ strategies are and their intentions by assessing their body language and their words would be invaluable to the decision makers.
Further, the noteworthy aspect is that the decision makers have to rely on gut feelings and emotional intelligence to arrive at the decision. This means that the decision makers have to trust themselves and their judgment to take the decision that would be in the interests of the organization and its shareholders. This often involves acting with imprecise or skewed information. The reason for this is that the opponents’ themselves would be actualizing their OODA Loops and hence it becomes a combat situation where the one with the better decision making abilities wins. This is the reason for the popularity of the OODA loop in contemporary organizations where training and mentoring often involves familiarizing with the OODA loop.
Finally, it is not always the case that decisions taken by the decision makers are perfect and free from errors. Hence, there has to be a mechanism where feedback loops have to be activated which ensures that decisions are vetted and evaluated for the impact that they have on the organization.
So, to sum up the benefits of the OODA loop, it is indeed the case that this method developed by John Boyd is extremely useful for decision making in any setting where the reaction times are less and where the fitness and the agility of the decision maker plays a crucial part in making the decision.
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