A guide for using the OODA loop to make complex decisions

By Indeed Editorial Team

Published 25 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

It's sometimes necessary to make complex or difficult decisions in the workplace. This can be challenging, but using specific decision-making processes and tools can make decision-making more straightforward. One of the options to help you make decisions in the workplace is the OODA loop, which is a four-stage process that helps you make complex decisions quickly and assertively. In this article, we explain what this process is and why it can be useful in a work environment.

What is the OODA loop?

The OODA loop is a four-stage process for decision-making that you can use in the workplace. This process focuses on finding out information and can help you to quickly make decisions. It functions on the understanding that you can change your decision if more information becomes available. OODA stands for the names of the four stages:

  • observe

  • orient

  • decide

  • act

The concept originated from the US military in the mid-twentieth century. It was first designed to help soldiers make critical decisions quickly, with only limited details. Its goal was to help soldiers make decisions faster than opposing soldiers, therefore giving them an advantage. In a business context, it can be useful because businesses that act quickly can be more competitive. The OODA process can, therefore, be beneficial when businesses want to respond quickly to changes in the market.

Related: What is market size? (Plus a guide to calculating it)

Understanding the OODA process terminology

The OODA concept contains some specific terminology, and understanding these terms can help you to fully understand the concept and apply it to your own decision-making. It can also help you to understand the origins of the process. The OODA terminology includes:

Manoeuvre warfare

Manoeuvre warfare is the military strategy that helped to create the OODA process. It relates to tactics that can disrupt the decision-making ability of the opponent. In business, this could refer to competing organisations. It focuses on using deception and surprise to outwit the opposing force.

Mental models

Mental models are internal representations and models of human behaviour. Having mental models gives you insight into how others might react to a situation. For decision-making, this can help you to reach decisions and conclusions more quickly than the opponent because you know what to expect from them.

Situational awareness

In this context, situational awareness means observing and understanding the factors that affect the decision. Getting as much information as possible is valuable for making any decision. The OODA process can help you to obtain more information and use this as a basis for making a decision, even if you have limited information.

Reaction time

Reaction time is the time between when something is happening and when you react to it. The OODA process aims to reduce reaction time for organisations. This helps businesses to be more responsive to rapid changes.

What are the four stages of the OODA process?

The OODA decision-making process involves four different stages. Moving through these stages in a methodical way can help you use this process to make decisions quickly and effectively. Having an understanding of each stage in the process also helps you to use each one successfully to support your decision-making. When using this process, it's also important to complete each stage as quickly as you can. The four stages are:

1. Observe

The first stage is to observe, which means obtaining as much information as you can about the situation. This helps you to understand the right decision to make and the various factors that influence it. Gathering information promptly is very important because information may change quickly. It's also important to recognise that this means your decision might change as details of the situation change or more information becomes available. In a work context, you might acquire the following information to assist your decision-making:

  • sales metrics

  • marketing metrics

  • demographics or firmographics

  • resources

  • legal information

2. Orient

The next stage involves deciding what you might do based on the information you have available. This means drawing rapid conclusions, even if the amount of information you have is very limited. Doing this quickly helps you to maintain an advantage over competitors. In a business setting, this might mean predicting all the possible outcomes from the decision. This also helps you to understand the impact of a decision.

3. Decide

You can then make a decision based on the potential outcomes and the data you have available. It's also important to inform other stakeholders as soon as you make your decision so they can adjust their plans to support the decision. In business, this might mean informing other teams and departments of the decision so they can develop new strategies as soon as possible.

4. Act

The final stage in the process is to act. This means acting on the new plans and strategies you've developed during the process. This is an important stage because reactions to the decision are time-sensitive. It's necessary to act quickly to take advantage of opportunities and mitigate challenges. This helps to give the organisation an advantage over competitors. During this stage, you can also test new ideas and identify challenges or areas to improve.

Related: Quotes on opportunities (with uses, examples and tips)

Why is this process useful for businesses?

The OODA loop is a valuable process for businesses because it helps them to make complex decisions more rapidly. It's also a useful strategy for making decisions when some information might be missing, unavailable or subject to sudden change. This can give the organisation an advantage over its competitors and help it to respond quickly to changing circumstances, especially if the organisation reacts faster than other businesses.

Using this process can also be useful because it saves resources. This is because making decisions quickly is a more efficient way of working and can be cost-effective. For instance, it can reduce the labour and energy that making a complex decision requires.

Can you use the process for everyday decision-making?

While this process is a valuable tool for making major business decisions, you can also use it in other areas of your life. Whenever you're asked to make a decision rapidly and with limited information, you could use the OODA process to guide you. This can help to make routine decision-making more efficient. If you find it challenging to make quick decisions, then using this process might help to improve your decision-making skills.

Related: Interview question: describe a time you had to make a difficult decision

Other ways to improve your decision-making

There are other strategies you can try if you're looking for ways to improve your decision-making skills. These approaches can help you to make decisions across all areas of your life. You might want to try a few different methods to find the strategies that suit you best. These strategies include:

Give yourself a deadline

The OODA process encourages you to make decisions as quickly as possible and setting yourself a deadline is another way to make your decision-making more efficient. Giving yourself a timeframe to make your decision limits your ability to change your mind and encourages you to stick with a decision. If you try this strategy, think about how significant the decision is. You might want to allow yourself more time to make decisions that have significant consequences.

Related: How to improve yourself: 9 self-improvement ideas

Have perspective

Putting the decisions you're making into perspective can help you to make them more efficiently. This approach can be useful if you tend to overthink minor decisions. Considering how serious the decision is, and how feasible it is to change your mind later, can help you make simple decisions more easily. This also means you can prioritise spending time on significant decisions that require more consideration.

Limit choices

Limiting choices can be helpful because having a wide range of choices can sometimes make it more challenging to make a decision. A large number of options can also cause confusion. Limiting choices reduces the options available and means you can give in-depth consideration to the remaining choices. This can make it easier to compare the options and make a final decision.

Compare the options

Comparing the options available to you and their advantages and drawbacks can help you to choose one approach. You might find it helpful to list the advantages and drawbacks of each option so you can easily compare them. This can help you to analyse the impact of each choice and what the overall effect is likely to be.

Practise

You can develop your decision-making skills by practising making minor decisions. This might mean making definite choices in situations where you have the option to not make a choice. Once you feel comfortable with this, you can progress to making more significant decisions. This includes making decisions in the workplace.

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