The OODA Loop: A Tool for Better Decision-Making
How to Hone Your Mental Engines to Make Better Decisions
Success depends upon previous preparation, and without such preparation there is sure to be failure.
Preparation is key for doing well at whatever it is you’re trying to do. It’s why athletes practice, actors rehearse, and writers read. The reason preparation is so critical is that it conditions your mind and body to perform in situations where others are not so conditioned. But the real power in preparation lies in how preparation makes you more likely to perform well.
Preparation makes us perform better by shortening the time it takes for us to go through a process that we automatically go through anyway: the OODA loop. The OODA loop is a four-step process that frames the actions we take every day:
Preparation takes the form of going through the first 3 parts of the loop, so that when it comes time to act, you are more likely to do the right thing, and do it well.
And therein lies the trick: have the observing, orienting, and deciding done as thoroughly and as far in advance as possible. When you do that, the action is much more likely to flow naturally and with ease. It provides a real advantage.
Whether you’re developing a retirement savings plan, or buying lunch, you’re using the OODA loop. Even when you’re doing things as automatic as grabbing a drink from the fridge or driving the same route to work as you do everyday — you’re using the OODA loop. It’s a proven model, and when we use it to an extent that matches the importance of the actions we’re taking, it works remarkably well.
And that’s the trick here: take the process that you already use for very automatic actions, and make it work well for more important, strategic, and long-term actions. Again, that takes place in the first three parts of the loop. So here’s the breakdown:
Observing is the part of the loop that deals with taking in data. Think of arriving at a party. You get there and look at who’s there. Do you see anyone you know? Is it loud, or quiet? Are people already buzzed, or still kind of stiff? Are people wearing their shoes, or not?
Observing is all about just finding all the information you can — not about making sense of it — that comes in the next step.
We should always be looking to get more data, and always be suspending judgment about what it means. Just get as much unadulterated information as you can. This requires being present, open-minded, and vigilant.
We orient ourselves when we take the data from the observation phase and make sense of it. Orienting is important because it involves a lot of mental machinery, and any of that machinery that is out of whack or improperly used can cost you.
Part 1: Mental Models
The way we orient ourselves is primarily by using mental models — ways of thinking about data, placing them in narratives, and embedding them into our judgements and actions.
Using the right mental models, and abandoning the wrong ones (like biases and logical fallacies) is key in orienting yourself properly. This is where doing a thorough OODA loop is beneficial even after decisions have been made. Mental models inform your entire worldview, personality, and thus relationships and skill sets. Refining those models changes you for the better.
Part 2: Mental Rehearsal Drills
Part of the orientation phase also involves mental rehearsal drills. You effectively orient yourself by thinking through the mental models you’re working with. You look at the data, think through possible actions, and come up with a plan.
Mental rehearsal drills are a very effective way to do this. Depending on the action you plan to take, the type and extend of the rehearsal will vary . But the point of a mental rehearsal is to go through a rehearsal in your mind what might happen during the real thing. It effectively orients you for a future context, so that you are not as surprised or “off your square” when you’re going to be expected to do the doing. Again, you’re shortening your reaction time, and allowing for sharper on-the-spot thinking by observing and orienting beforehand.
Say you’re going to buy a car at the dealership. The way to orient yourself is to do a few things, so that when the salesperson shakes your hand and tells you that they’ll have you driving that car off the lot in no time — you’re ready to get the best price.
- research the cars you want, and the prices being paid for them
- know the other promotions going on at other dealerships
- make a ranked list of what negotiables: which things are you willing to give for others?
- think through at least 3 different conversations that you could have with the salesperson, and really get yourself a feel for how those could go.
The point of the rehearsal is to narrow down the list of unforeseen outcomes that you experience. If you have even mentally anticipated something, you’ll be more prepared than others when it does happen — which means you’ll be less shaken.
The output of the orientation is options, which is the fuel for the decision portion of the OODA loop. There can be as few as 2 options, or as many as 50 (or more!) that need to be decided between.
When the action is grabbing a drink from the fridge, the first two steps are done quickly and with little awareness — but they still happen. For the third part — decision — that’s also done quickly because you already have a set of preferences. You feel like having some beer, and you only have one kind in the fridge; decision made!
For higher-stakes decisions, this stage is going to be more important, and it will rely heavily on the work done during the first two phases. This stage can involve all sorts of things to work with the observations and orientation that you went through. But the goal is a choice among options that is the best hypothesis you have.
This part is important. You are making a hypothesis — a best guess given the data — which is like a law of nature. You’re essentially saying “if I take this action, then this outcome (which is the one I want) will happen”.
It’s important to see it that way, so that you can close the loop in the next part: action.
Action is not really the final part of the loop, though it is a very common mistake to see it that way. The action is basically a test of the hypothesis you made in the decision portion of the loop. And because it’s a loop, it needs to continue, so you’ll need to record data on how your hypothesis held up to a test (action) and — you guessed it — feed it back into the loop.
Take your action, record the outcome as data for your next observation loop, and repeat the process. Keep observing and orienting with the intention of making an even better decision next time.
Seeing your action in this way — as a test of your best hypothesis — will do wonders for your humility, and enable you to learn much better from experience. And as we all can attest, experience is one of the best teachers.
The Key Is to Shorten the Loop
The OODA loop works. We see that evidence everyday when we take the same route to work, and don’t even have to think about it. We are barely awake, we’re thinking about everything else but driving, and we still make all the turns, and arrive to work in one piece. That’s the OODA loop having done its job. The Observation, orientation, and decision have been done long ago, as has the initial action (your first few drives to work). Now, the action can be taken without having to devote time or energy to any of those other steps.
In the same way, doing an in-depth OODA loop before you do something very important — like buying a new home, or pitching for funding to some venture capitalists — makes the action you’re about to take that much more likely to succeed.
Preparation is key to succeeding. Preparation comes in the form of a detailed OODA loop. So spend time going through that loop as you look to do important things in your life — it should serve to make your decisions much better. And your actions should follow suit.
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