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Importance of Ethics
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The Tough Get Going When the Going Gets Tough: Leadership in the Face of Adversity
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The Upside of Market Volatility
The volatility present in the market is always mentioned in a negative manner. However, if one looks carefully at the function performed by market volatility, this negative connotation seems unnecessary. This is because, in the absence of volatility, making profits would also be impossible. It is this volatility, which enables the fluctuation of prices that […]
Houses Path Goal Theory
The theory was developed by Robert House and has its roots in the expectancy theory of motivation. The theory is based on the premise that an employee’s perception of expectancies between his effort and performance is greatly affected by a leader’s behavior. The leaders help group members in attaining rewards by clarifying the paths to […]
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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