This is the meeting you’ve been dreading. Every week, you meet as part of a committee to decide on next steps for this inconsequential project. However, the team spends the entire time debating on the best course of action. They evaluate data, argue about pros and cons, and try to weigh costs and benefits. But there just isn’t enough information, so the team agrees to do more research, and the decision gets pushed out yet another week.
MBAs love frameworks. We have a framework to learn about marketing, with varying numbers of C’s and P’s to memorize. We have frameworks for strategy, with varying numbers of external and internal forces to consider. We are given plenty of tools for analysis, but when it comes to decision-making, we have a tendency to revert back to analysis when confronted with a lack of information.
Paralysis by Analysis
Basic military officer training introduces you to a lot of frameworks as well, including ones for decision-making. I still remember having to memorize a 12-step problem solving process which we had to follow during leadership training exercises. This literally required saying things like “Step 1: identify the problem. The problem is…” as part of the team brief. We spent precious time on the process that could have been better spent on execution. Thankfully, these were only training exercises, and we ditched the process as soon as we got into the real world.
However, once I got into the real world, we ran into a similar problem, but not as overt. You might have had a similar experience in your work – where you spent a huge chunk of your time trying to figure out the ultimate course of action, and then by the time you’ve made the decision, there’s hardly any time to actually do the work. Classic “paralysis by analysis.” Intuitively, we all knew that “no plan survives first contact with the enemy.” Mike Tyson said it better: “Everybody has a plan until they get punched in the face.”
There’s a better way to make decisions and think about how your decisions play out in your larger strategy.
The OODA Loop
The OODA loop (short for Observe, Orient, Decide, Act) is an idea that is beloved within the Air Force community. It was originally invented by a fighter pilot named John Boyd, one of the most famous military tacticians in the Air Force. He created the OODA loop from his observations of aerial combat in the Korean War, and it was one of the concepts that he used to revolutionize air combat instruction. He used to boast that he could defeat any other pilot in an engagement, from a position of disadvantage, in 40 seconds. He never lost.
The OODA loop stands for Observe, Orient, Decide, Act. The basic premise of this theory is that you need to make decisions more quickly than your competition. You need to quickly analyze a limited amount of information, and then decide and act on that information as soon as possible. You’ll then get feedback form your actions, and the process repeats itself. The faster you can iterate, the more you’ll learn relative to your competition. In other words, you’re getting inside your competitor’s OODA loop and disrupting their processes.
Eric Ries’ Lean Startup methodology takes this principle and applies it to startups. In theory, by focusing on a minimum viable product, gathering feedback, and developing quick iterations of products and the lessons learned from each iteration, you can out-execute the competition. You can also ultimately conserve your resources by failing fast and early, and failing cheaply.
Why use it?
The OODA loop encourages experimentation and proceeding with the 80% solution now rather than waiting for a 100% solution. In the famous ‘marshmallow challenge,’ teams assemble a contraption of spaghetti and tape to see which team can create the tallest free-standing structure. They found that teams of children outperformed adults (including MBA students and engineers) because rather than argue about the course of action, they play with the materials and come to the best conclusion through trial and error, rather than through rigorous analysis and debate.
There appears to be evidence to back up the theory that faster decision-making leads to better results. Faster strategic decision-making has been tied to better firm performance in various contexts, especially in high-velocity environments. Counter-intuitively, the research also found that the fast (and successful) decision makers seem use more information, not less, in their analysis and reasoning.
However, speed isn’t everything – you need to make sure you are doing enough in each step and not focusing so much on speed that the decision quality goes down. A 2002 study in the Academy of Management Journal cautioned that organizations can fall into a ‘Speed Trap’ – where the focus is so much on speed that the quality of decision-making suffers.
Next time you go into that unending meeting or committee, think about what would happen if the group just made a decision and experimented with it. What would be the consequence of failure? Would you learn more by trying a solution rather than another week of debate or research? It might just be better to make a decision and get feedback, knowing that your first decision is going to be wrong anyway.