Certain To Win

Certain to Win
John Boyds Strategy in the 21st Century

Or, any position other than first is a tie for last.
Chet Richards J. Addams & Partners, Inc. Version 1.2 March 2005
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Chet Richards 2004-5 [email protected] (+1) 404.231.1132
Whether it is in the personal realm of the individual warrior, or in the public domain of an entire nation or culture, the essence of the swordless art is to make resourcefulness your resource.
Thomas Cleary, The Japanese Art of War, 77
Chet Richards 2004-5 [email protected] 404.231.1132
Agenda
What does it take to win? Maneuver conflict (not just warfare) The OODA loop and its components Operating inside their OODA loops How to have fast OODA loops Installing maneuver conflict strategies in business
Starting point: The study of conflict

To flourish and grow in the many-sided uncertain, and ever-changing world that surrounds us suggests that we must make intuitive within ourselves those many practices we need to meet the exigencies of that world. John R. Boyd, A Discourse on Winning & Losing
Starting point: The study of conflict

To flourish and grow in the many-sided uncertain, and ever-changing world that surrounds us suggests that we must make intuitive within ourselves those many practices we need to meet the exigencies of that world. John R. Boyd, A Discourse on Winning & Losing
Wars dont always turn out as expected

Russia Soviet Union United States Various Arab States Chechnya Afghanistan Vietnam Israel
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Business doesnt either

General Motors Market share fell from 52% to less than 30% Dropped to #52 on Fortune 500 Lost billions in 2001, 2002 & 2003 In Chapter 11 Gone
Sears Delta, American Airlines United Airlines, US Airways Digital Equipment, Compaq, Montgomery Ward, Eastern Airlines, TWA, Pan Am, McDonnell-Douglas
But its not inevitable
Automobiles
Retailing Airlines
Toyota, Nissan
Wal-Mart, Target Southwest, JetBlue, Singapore, Emirates, Ryanair, AirTran
Computers
Dell, Apple
In other words, there are many times when the side wed pick to win, based on:
size/financial resources
technology
market share
loses.
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Why?
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Some possible answers

Luck
Divine intervention
Local culture Inspired leadership
Better understanding of the nature of conflict and competition
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How this works in war

And that is the business of decision cycles, or inside the decision loop, as people say if, in fact, you can deceive him with respect to what you are going to do, to cause him further confusion and make him keep his force in place one day too long, then, in fact, you find yourself all the way to Baghdad.
Gen Tommy Franks, Commander, USCENTCOM
in Peter Boyer, The New War Machine, The New Yorker, June 30, 2003
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What hes talking about is maneuver warfare

The essence of maneuver warfare is taking action to generate and exploit some kind of advantage over the enemy as a means of accomplishing our objectives as effectively as possible.
Marine Corps Doctrine Pub 1, Warfighting, 1997. If we can take the inimical aspect out of the word "enemy," we see that the primary difference is that business focuses on the customer where maneuver warfare focuses on the enemy. Col Mike Wyly, USMC, godfatherof maneuver warfare doctrine in the Marine Corps.
Competitors can be thought of as malignant parts of the environment, not as the focus of our efforts.
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The primary advantage we want to achieve in all forms of maneuver is time.
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Time is special
Time is the only physical parameter with a direction (the arrow of time.) You dont have an unlimited supply. Once its gone, its gone. Sure sign youre not using Boyds strategies: you try to solve problems by throwing more time at them.
I may lose a battle; I will never lose a minute.
Napoleon
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Using time as a weapon: The H-Y War

1981 - 1983
Honda Motorcycles introduced or replaced 113 models, effectively turning over its entire product line twice. Yamaha, which also started with about 60 models, was only able to manage 37 changes in product line over the same 18 months. Observation: As a result, Honda was able to incorporate (and test in the marketplace) a much wider variety of styling & technology. But that alone would not have been decisive.
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H-Y War: The Results

Key point: Honda succeeded in making motorcycle design a matter of fashion, where newness and freshness are important attributes to customers. Next to a Honda, Yamahas bikes looked old, unimaginative, unattractive. Yamaha was left with 12 months of unsold (and unsellable) inventory.
Stalk & Hout, Competing Against Time, 59
Comment: a classic example of shaping the marketplace.

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A time-compressed company does the same thing as a pilot in an OODA Loop Its the competitor who acts on information faster who is in the best position to win.
George Stalk, Jr. & Tom Hout, Competing Against Time, 180-181.
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Business is a dogfight. Your job as a leader: Outmaneuver the competition, respond decisively to fast-changing conditions, and defeat your rivals. That's why the OODA loop, the brainchild of "40 Second" Boyd, an unconventional fighter pilot, is one of today's most important ideas in battle or in business.
Keith Hammonds, The Strategy of the Fighter Pilot, Fast Company, June 2002.
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This is the OODA loop

Orient
Observe
Decide
Act
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This is not the OODA loop

Orient
Observe
Decide
Act
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An OODA loop with power

Observe
Unfolding Circumstances Implicit Guidance & Control Genetic Heritage
Orient
Cultural Traditions
Decide
Implicit Guidance & Control
Act
Observations
Feed Forward
Analyses & Synthesis
Feed Forward
Decision (Hypothesis)
Feed Forward
Action (Test)
Unfolding Interaction With Environment
New Information
Outside Information
Feedback
Previous Experience
Feedback
J. R. Boyd, the Essence of Winning and Losing, 1995.
Orientation is the Schwerpunkt. Organic Design, 16. Emphasize implicit over explicit in order to gain a favorable mismatch in friction and time (ours lower than any adversarys). Organic Design, 22. Interaction permits vitality and growth, while isolation leads to decay and disintegration. Strategic Game, 29.
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Observations on orientation for business

Orientation
Implicit Guidance & Control Implicit Guidance & Control Cultural Traditions
Genetic Heritage
Observations
Feed Forward New Information
Analyses/ Synthesis
Feed Forward
Decision
NOTES
Action
Previous Experiences
Without genetic heritage and cultural traditions, the influence of new information & previous experience increases In particular, they exert a much stronger effect on analyses and synthesis
Observation is the only feed into Orientation
Therefore, it becomes vitally important to beef up the feed forward into New Information Quantity Quality 23 Chet Richards 2004-5 [email protected] 404.231.1132
Orientation locked tight

The company (A&P), under pressure from Kroger, experimented with a new concept, The Golden Key. It sold no A&P branded products, it gave the store manager more freedom, it experimented with innovative new departments Customers really liked it.
What did A&P executives do with The Golden Key? They didnt like the answers it gave, so they closed it.
Jim Collins, Good to Great, 68.
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Improving orientation
Set aside specific times (e.g., at each staff meeting) to review feedback on possible mismatches (Reflection must be institutionalized as a business process. Michael Hammer, co-author of Reengineering the Corporation, and Steven A. Stanton, Fortune OnLine, Nov 24, 1997) Abolish the Executive Dining Room Abolish Management Clubs
These are tubs for drinking your own bathwater
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Improving orientation (II)

Post on internal web site (& invite discussion):
Assessment of the current situation: customers, competitors, economy, government, our situation, etc. Post-mortems (proposals, projects, etc.) Specific competitor observations (esp. things they do better)
Include a what competitors do better section in staff meetings

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What about action?

The idea is that the vast majority of the time, actions should flow smoothly from orientation via the implicit guidance and control link Thus, excellence in technique is vitally important study, train, rehearse, practice, critique constantly, at all levels of the organization To use the currently fashionable label, this is what defines a knowledge-based organization.
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A better way to think of OODA loop speed

Observe
Unfolding Circumstances Implicit Guidance & Control
Orient
Decide
Act
Observations
Feed Forward
Feed Forward
Feed Forward
Action (Test)
Outside Information
Feedback Feedback
Orientation is the Schwerpunkt. Organic Design, 16. The ability to operate at a faster tempo or rhythm than an adversary enables one to fold adversary back inside himself so that he can neither appreciate nor keep up with whats going on. Strategic Game, 44
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Observation
(Orientation)
Unfolding Environment: Customers Competitors Economy Government Employees Financials Other Indicators Etc.
Observations
Feed Forward
(Orientation) What youre looking for are mismatches between a) what your orientation is telling you the world ought to be and b) what the world really is.
Feedback From Decision
Feedback From Action
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Put simply
Good news is dangerous Bad news is the only thing that will save you, if:
You find it before it finds you You correct your orientation You act upon it
And loyalty checks are deadly.
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Ideas for improving observation If youre GM, buy Fords & Toyotas for company cars.
Send everybody on at least 2 customer visits each year (Tom Peters)

Insist that your company newsletter (published or on your intranet) focuses outside the company (customers, competitors, the environment, etc.) and includes a bad news section
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Be the customer
Example: If youre a Delta Airlines VP, book your own tickets (directly, via the Web, & through travel agents). Stand in line to check bags. Fly coach. Now do the same thing on Continental. Talk to everybody while youre there. Fly Delta no more than 50% of the time. Distribute what you found to everybody in the company (e-mail, intranet site, internal chat /newsgroup, coffee pot, etc.)
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In one of the first games he attended, [New Sacramento Kings Owner] Gavin [Maloof] missed an entire quarter waiting in a beer line. Knowing his father would have gone nuclear, Gavin arranged to have 20 minibars installed throughout the arena.
Nobody waits for a beer now.
Hugo Lindgren, The Flying Maloof Brothers, New York Times, February 15, 2004
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Or at least meet the customer

Spend a hour a week manning the companys reservation, sales, or customer service desks Receptionists should work for the CEO (or at least he/she should buy them a drink periodically) Put a Comments? link on your Web site. Have the raw responses mirrored to you. Read them.
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Decision
Feed Back
(Orientation)
Feed Forward
Feed Forward
(Action)
Note: Decision is fed only from Orientation
(Observation)
Note: Decisions, in this sense, are needed when action does not flow from orientation. These types of decisions always slow down the OODA loop They can be considered as part of the learning process.
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And so you decided. Great.
I wish I could get them to make more.
Roger Smith, Chairman of General Motors, on his Pontiac Divisions planned production rate for the Fiero
(Businesses dont have commanders, whose legal orders must be obeyed)
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Research supports this

There are times for deliberating about options. Usually these are times when experience is inadequate and logical thinking is a substitute for recognizing a situation as typical
If fireground commanders read the situation correctly, their orientations should match the events. When they are wrong, they can quickly use their experience to notice anomalies. I dont make decisions, the commander announced to his startled listeners. I dont remember when Ive ever made a decision.
Gary Klein, Sources of Power, MIT Press, 1999. 37
Can I operate inside the decision time of the enemy? If I can, Ive got him.
Phil Condit, former Chairman/CEO, Boeing, Aviation Week & Space Technology, 2/10/2003
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Question
What determines OODA loop speed?

Answer:
Ultimately, a moral climate/culture/ environment that encourages people to use their initiatives to further the goals of the organization Under such a climate, people will solve the technical problems
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Boyds organizational climate: The Principles of the Blitzkrieg
Fingerspitzengefhl - Zen-like quality of intuitive understanding. Ability to sense when the time is ripe for action. Built through years of progressively more challenging experience.
Einheit - Has the connotation of "mutual trust" and implies a common outlook towards business problems. Built through common experience. Fingerspitzengefhl at the organizational level.
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Boyds organizational climate: Continued Schwerpunkt - Any concept that gives focus and direction to our efforts. In ambiguous situations, answers the question, "What do I do next? Requires leadership. Auftragstaktik - Tell team members what needs to be accomplished, get their agreement to accomplish it, then hold them strictly accountable for doing it - but don't prescribe how. Requires very high levels of mutual trust. 41
Fingerspitzengefhl at the tactical level

Every day the sales team met at 7 a.m. for two hours of training that involved role playing, sales strategies, and videotaping of mock sales calls. Don Sumner, 38, an account executive, says Winkler has handed him a three-page performance analysis more than once, after overhearing one of Sumner's phone pitches. "Dealing with someone who can be such an S.O.B. has made me more thick-skinned," says Sumner. Since his arrival the number of clients at SecureWorks has grown from 100 to 800. The sales team that Winkler initially whittled from six members to three has grown to 30. New orders at the now profitable company are growing at 200% to 300% a year, and the company says sales will hit $20 million for 2004, up from less than $1 million only three years ago.
~ Fortune Small Business, The Best Bosses, October 2004.
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Fingerspitzengefhl as strategy
There is a surface version of genchi genbutsu (go and see for yourself) and a much deeper version that takes many years for employees to master. What the Toyota Way requires is that employees and managers must deeply understand the process of flow, standardized work, etc.
Jeffrey K. Liker, The Toyota Way, p. 224 emphasis added
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Trust ultimately relies on a common orientation

Arrange setting and circumstances so that leaders and subordinates alike are given the opportunity to continuously interact with the external world, and with each other,
in order to
more quickly make many-sided implicit cross referencing projections, empathies, correlations, and rejections
as well as
create the similar images or impressions, hence a similar implicit orientation, needed to form an organic whole.
Organic Design, 23
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Trust ultimately relies on a common orientation

Arrange setting and circumstances so that leaders and subordinates alike are given the opportunity to continuously interact with the external world, and with each other,
This is the answer to how to in order to improve and align orientations more quickly make many-sided implicit cross referencing projections, in a company. empathies, correlations, and rejections
as well as
create the similar images or impressions, hence a similar implicit orientation, needed to form an organic whole. John R. Boyd, Organic Design, 23
45
Constructing a climate for fast OODA loops

The Tao of military operations lies in harmonizing people.
Zhuge Liang, c. 300 AD
The issue of human nature is the most basic problem The most important factor is maintaining a relationship of trust between labor and management.
Shigeo Shingo, one of the architects of the Toyota Production System. (emphasis added)
The employees themselves are completely in charge.

Toyota Motor Company, Toyota Production System, 1992, describing the virtues of the kanban system
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A Schwerpunkt for business

Ultimately, the Toyota Production System means a lot more than productivity and quality. For companies and for employees, the Toyota Production System means taking their destinies into their own hands. Companies should not and need not be like ships adrift at sea, cast about uncontrollably by external factors, such as the latest oil crisis.
Toyota Motor Company, Toyota Production System, 1992.
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Flowdown: Schwerpunkt for manufacturing
The Toyota Production System, quite simply, is about shortening the time it takes to convert customer orders into vehicle deliveries.
This tells everybody in Toyota manufacturing: When in doubt, take the action that has the biggest impact on order-to-delivery time.
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Another Schwerpunkt
Most CEOs are focused on achieving their financial and operational goals, and on executing a strategy. But Apple's Steve Jobs believes his company's ultimate advantage comes from its ability to make unique, or as he calls them, insanely great" products.
Jobs's entire company is focused on that task.
Peter Burrows, Commentary: Apple's Blueprint for Genius, BusinessWeek Online Extra, March 21, 2005
Version 1.2 17 March 2005
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An Auftrag primer
The mission must express the will of the commander in an unmistakable way The objective, course of action & constraints must be clear & definite without restricting freedom of action more than necessary in order to make use of the initiative of individuals charged with the tasks to be accomplished
Limits as to the method of execution within the framework of the commanders will are imposed only where essential for coordination with other commands. Gen. W. von Lossow
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But first
Such a system, of course, presupposes uniformity of thinking and reliability of action only to be attained by thorough training and experience
Complete confidence of superiors in their subordinates and vice versa is absolutely essential.
Martin van Creveld, Fighting Power, 36
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Augtragstaktikmissions and contracts instead of tasks

The concept of mission can be thought of as a contract, hence an agreement, between superior and subordinate. The subordinate agrees to make his or her actions serve superior's intent in terms of what is to be accomplished, The superior agrees to give the subordinate wide freedom to exercise his or her imagination and initiative in terms of how intent is to be realized.
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Augtragstaktikwhat commitment means

As part of this concept, the subordinate is given the right to challenge or question the feasibility of the mission if: he feels his superior's ideas on what can be achieved are not in accord with the existing situation or he feels his superior has not given him adequate resources to carry it out.
Likewise, the superior has every right to expect his subordinate to carry out the mission contract when agreement is reached on what can be achieved consistent with the existing situation and resources provided.
J. R. Boyd, Patterns of Conflict, 76
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Auftrag in a business setting

Abbott recruited entrepreneurial leaders and gave them the freedom to determine the best path to achieving their objectives.
On the other hand, individuals had to commit fully to the Abbott system and were held rigorously accountable for their objectives. They had freedom, but freedom within a framework.
Jim Collins, Good to Great, 123.
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Powerful stuff if you can use it
Samsung has kept a lean corporate structure, with authority increasingly delegated to front-line managers around the world, and almost a quarter of the far-flung staff of 88,000 dedicated to research and development.
Samsung Is Now What Sony Once Was, By James Brooke And Saul Hansell, New York Times, March 10, 2005
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Another example
As you know, Mary, it is the boards intent to keep a balance between manufacturing in the US and sourcing overseas. Sales of our current product, however, are below the level we need, and it will be at least six months until the new line is ready. Id like you to take over domestic sales and raise our revenues at least 10% (more would be great) until the new line debuts in May. This will allow us [[in order to]] to avoid a highly disruptive interruption of our US-based manufacturing operations. Be careful, however, not to do anything that might hurt the launch of the new line.
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If you were Mary

Why are sales below forecast? Ageing product line, relative to the competition? Poor sales strategy?
Lack of sales training?

Poor sales management? Poor execution by the fulfillment side of the house? Poor quality?
What are my constraints?

More sales staff? Transfer star salespeople from another territory? Do I have any pricing power? Crash training program? Funding for this?
Any short-term improvements possible in the product?

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Its really pretty simple

I. (Individual) Fingerspitzengefhl
II. Einheit
III. Schwerpunkt
IV. Auftrag
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Top managements unique responsibility is to tend the culture

These and other miscues prompted Mr. Barrett to send a memorandum in July to all 80,000 Intel employees, promising that top executives were "revisiting the meaning of Intel culture and talking about management expectations."
59
Run your business like a NASCAR team: 1. Design & build a winning car 2. Then go racin
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How to install Boyds strategies

Make a commitment - maneuver conflict is a martial art, in the same family with karate, kung fu, kendo, aikido, and judo. i.e., you dont need to be perfect, just better than the competition.
Infuse it throughout the organization - establish formal mechanisms (e.g., GEs Crotonville-onHudson.) Educate, train, practice. Try, learn, share. Promote those who embrace and use it. Remove those who do not, regardless of how good their numbers.
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In other words
Not this doofus: But this guy:
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The Operating System is GE's learning culture in action. It is a year-round series of intense learning sessions where Business CEOs, role models and initiative champions from GE as well as outside companies, meet and share intellectual capital.
http://www.ge.com/en/company/companyinfo/at_a_glance/operating_ system.htm - 2/25/2003

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Toyotas Learning Culture

Principle
Genchi genbutsu Hourensou
Meaning
Go and see for yourself / gemba Report, update, advise
Nemawashi
Hansei Hoshin kanri
Consensus building
Reflection Policy deployment
Jeffrey Liker, The Toyota Way
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The Payoff: Operating inside their OODA loops

In War:
Keep the initiative: Set up and exploit situations before they can respond (again and again) Command both sides Catch the other side flat footed: Make them seem slow, unresponsive, clumsy; pump up Murphys Law (entropy)
In Business: Meet expectations & create value, but also delight. Turn customers into fanatics.
Play the cheng/chi game

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You dont wait for the future. You create it.
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Certain to Win

John Boyds Strategy in the 21st Century

Chet Richards 2004-5 [email protected] 404.231.1132

Starting point: The study of conflict

Starting point: The study of conflict

Wars dont always turn out as expected

Chet Richards 2004-5 [email protected] 404.231.1132

Business doesnt either

Chet Richards 2004-5 [email protected] 404.231.1132

But its not inevitable

Chet Richards 2004-5 [email protected] 404.231.1132

Some possible answers

Better understanding of the nature of conflict and competition

Chet Richards 2004-5 [email protected] 404.231.1132

How this works in war

What hes talking about is maneuver warfare

The primary advantage we want to achieve in all forms of maneuver is time.

Chet Richards 2004-5 [email protected] 404.231.1132

Using time as a weapon: The H-Y War

H-Y War: The Results

Comment: a classic example of shaping the marketplace.

This is the OODA loop

This is not the OODA loop

An OODA loop with power

Analyses & Synthesis

Observations on orientation for business

Feed Forward New Information

Observation is the only feed into Orientation

Orientation locked tight

Chet Richards 2004-5 [email protected] 404.231.1132

Improving orientation (II)

Include a what competitors do better section in staff meetings

What about action?

A better way to think of OODA loop speed

Chet Richards 2004-5 [email protected] 404.231.1132

Feedback From Decision

Feedback From Action

Chet Richards 2004-5 [email protected] 404.231.1132

And loyalty checks are deadly.

Chet Richards 2004-5 [email protected] 404.231.1132

Send everybody on at least 2 customer visits each year (Tom Peters)

Chet Richards 2004-5 [email protected] 404.231.1132

Or at least meet the customer

Note: Decision is fed only from Orientation

Chet Richards 2004-5 [email protected] 404.231.1132

And so you decided. Great.

I wish I could get them to make more.

(Businesses dont have commanders, whose legal orders must be obeyed)

Chet Richards 2004-5 [email protected] 404.231.1132

Research supports this

Gary Klein, Sources of Power, MIT Press, 1999. 37

What determines OODA loop speed?

Chet Richards 2004-5 [email protected] 404.231.1132

Boyds organizational climate: The Principles of the Blitzkrieg

Fingerspitzengefhl at the tactical level

Chet Richards 2004-5 [email protected] 404.231.1132

Trust ultimately relies on a common orientation

Trust ultimately relies on a common orientation

Constructing a climate for fast OODA loops