Strategic Advantage in a Complex World

The big O of the OODA Loop — Orientation

The big ‘O’ of Boyd’s OODA Loop — the best change management model you’ve never heard of⁠ [1] — is Orientation: the way we see and make sense of world around us so we can act in it. Orientation is shaped by the observations we make [⁠2] and the lens through which we make sense of those observations. Without effective Orientation everything we see, hear or sense is meaningless noise.

Orientation is the most biggest opportunity for strategic advantage in our fast-changing, complex world.

Our Orientation is shaped by the following filters:

1. Genetic Heritage: the physical and intellectual evolution which shapes each person’s unique capabilities and limitations — in terms of an organisation the processes, practice & methods it’s inherited over time
2. Cultural Predispositions: a learned set of behaviours developed in formative years, shaped by where we were born in the world and to whom
3. Personal Experience: behaviour learned since our formative years, which is peculiar to each individual
4. Knowledge: information, understanding, or skills acquired throughout life that forms part of our memory
5. Sense-making: the mental process by which we move towards action (described incompletely by Boyd as analysis and synthesis alone).

(Source: Shaping and Adapting: Unlocking the power of Colonel John Boyd’s OODA Loop. Major P.Tremblay)

Humans deal with a vast array of information from events bombarding us continually. We use mental models — representations of the real world that build up from our experiences, interactions, cultural norms and beliefs — to guide action (some of these models are thought through; others are unconscious biases were less aware of the influence of). New information coming in can validate our models of the world or challenge them, forcing evolution by destroying the old ones and creating new, more effective Orientation patterns enable us to act better.

Humans don’t process information like a computer [⁠3] — we don’t seek ‘optimal’ decisions but ‘sufficient’ ones, often based on familiarity: first-fit, not best-fit patterns. This provides a speed advantages in predictable environments — how markets used to be with captive customers and one or two competitors. However, the big shifts in the economic environment over recent decades has meant these stored patterns of knowledge are proving insufficient in a world where customers have unlimited choice due to a legion of providers with technology that provides an abundance of choice.

Businesses need fresh Orientation

“Tom Stewart [⁠4] references the case of a group of marines taken to the New York Mercantile Exchange to be taught to play with simulators of the trading environment. Naturally the traders won each time. But when the traders visited the Marine Corp’s base and played war games against the marines, they won yet again. What they realised is that the traders were skilled at spotting patterns and intervening to structure those patterns in their favour. The Marines, on the other hand, like most business school graduates, had been trained to collect and analyse data and then make rational decisions. In a dynamic and constantly changing environment, it is possible to pattern un-order but not to assume order.” In other words, an ‘ordered’ Orientation only works in an ordered environment, while a ‘complex’ Orientation works in both predictable and unpredictable environments and therefore should become the aim of businesses.

(Source: The New Dynamics of Strategy: Sense-making in a complex and complicated world. C. F. Kurtz & D. J. Snowden (2003)

The Orientation of the officers was shaped by structured thinking — like many MBAs — that seek to monitor adherence to a fixed plan. The traders’ Orientation however was shaped by mental models focused on finding weak signals of emerging opportunities and threats, which allowed them to operate more successfully in a world beset by rapid change as they were rolling with it — riding positive patterns and avoiding negative ones — rather than trying to make it conform to their expectations and becoming confused by it.

“Without insights and vision there can be no orientation to deal with both the present and the future” (F.Osinga)

Detection of threats is a core part of the human genetic heritage. Our intelligence evolved to avoid failure, rather than succeed. Subsistence living meant avoiding failure (e.g. having nothing to eat today) was far more important than succeeding (e.g. finding an abundance of food that couldn’t be preserved). And while this explains why we continue to make rapid decisions based on partial data today (an evolved capability) it also explains one of the biggest fault lines in leadership decision-making today:

Apophenia, or the spontaneous perception of connections of unrelated phenomena

Successful leaders are adept at recognising relevant patterns in divergent information — ‘moments of epiphany’ or the good decisions made on ‘gut instinct’ that all leaders have experiences of — but apopheny is the tendency to make seemingly meaningful patterns with random data. Pareidolia is a classic example of this — seeing faces in random things [⁠5] — but the phenomenon is not limited to the trivial. The danger of apophenia is that we run off to start fixing the wrong problems and we do so because these are the ones familiar to leaders — they resonate with our Orientation, not because these are the critical areas that must be focused on.

Fortunately, humans evolved and we continue to operate (largely) in social groups today, which allows us to validate our ‘insights’ in the cauldron of interactions with others. Social interactions therefore are critical to our survival and prospering as a species in a rapidly changing environment — making sure we don’t see connections in things that are not really there, or preventing us from wasting valuable resources on fixing the wrong things (however ‘agile’ we do it). Continual learning through social interactions has enabled us to meet our survival challenges historically and have refined our capabilities to meet tomorrow’s challenges as well — IF we use them.

Tapping into the wisdom of crowds — ‘distributed cognition’ — lets us leverage the multiple Orientations we need to make novel and relevant discoveries. It is why culture — how we evolved socially — has become one of the latest buzzwords — it speaks to the very heart of what Orientation is and the subject of the next post.