Blog post

Here’s a Military concept worth applying in business.

By Ian Bertram | August 16, 2012 | 0 Comments

I’ve been preparing for my presentation at next week’s Applications Summit being held in Sydney. The focus of this year’s event will be on the reinvention of software for mobile, cloud and the future web.  Application strategy managers, software development leaders and enterprise architects will learn how to overhaul their application portfolio to support business growth and innovation.

 As well as running a roundtable on how to build an analytics capability (the flavour of the year with many organisations – for good reason) I’m giving a presentation on “Using Events and Analytics to Create Intelligent Business Operations”. In it,  I’ll be applying the concept of the OODA loop to business. OODA stands for Observe, Orientate, Decide and Act, and is a concept that was originally applied to military or combat situations. The concept was devised by military strategist Colonel John Boyd, to help troops continually absorb information from different sources, process that information in the context of the situation they are in, react to that outcome and make a decision that will direct the focus and energies to defeat the adversary and survive.

 Many believe OODA today is more applicable to security situations due to the Observe and Orientate components, but as someone once told me – everything in life is a supply chain. Life’s has  a start, middle and end with multiple processes in between; marriage is like a supply chain, some better and some worse; if you get sick and go to hospital you start at one end of the supply chain and pop out the other side supposedly all healed.  All of these things can get broken down into a process whereby you need to make a decision and act upon something before moving to the next part of the chain. At each stage of this process you obviously want to make the most informed and best decision possible – that bit is obvious. However the situation in which you make a decision can change based on many factors.

 So this concept of the OODA loop is more relevant today for operation decisions than ever before as we try and make every process within our  business more automated, more efficient, more accurate, more targeted. 

 We as individuals make hundreds of decision each day, and we contextualise them on our surroundings. For instance, what should I have to eat, it’s morning and it’s cold, so I’ll have hot porridge for breakfast rather than cereal with cold milk as that will warm me up and make me feel better. 

 Many people within organisations make suboptimal decisions because they don’t take advantage of the information that is available to them from customers, suppliers, partners, the external world or even their own companies information in other departments.

 This of course is where analytics comes in. The question comes down to how can you use the information and apply the observe, orient, decide and act (OODA) loop to analyse business situations to determine what kinds of real-time intelligence to apply, for a better result. That’s what I’ll be covering at next week’s conference, hope to see you there.

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