How to Gain Insight from Competitive Intelligence and OODA Loops - dummies

How to Gain Insight from Competitive Intelligence and OODA Loops

By James D. Underwood

To add another important dimension to your competitive intelligence analysis work, consider observe, orient, decide, act (OODA) loops. In the mid-1950s, Colonel John Boyd created OODA loops for the purpose of revolutionizing air combat strategy. His approach consisted of training pilots to predict what enemy fighter pilots would do based on their purpose, intent, and objectives.

Properly trained pilots flew one to two steps ahead of their enemy counterparts, as if they knew what the enemy would do before the enemy did it! Today, OODA loops are used in business as well as military applications.

Although SMD analysis is effective and sufficient for most CI needs, OODA loops add the dimension of competitor motive to provide an additional layer of understanding. In the same way OODA loops changed air combat, OODA loops can change your effectiveness as a CI analyst in predicting future events.


Observation: What do you observe?

The observation stage of the OODA loop is identical to that of the see stage in SMD analysis. Here, you list everything you’re seeing as basic statements of fact; for example:

Competitor B is going to build a new manufacturing plant.

Competitor B’s new manufacturing plant will be in Bentonville, Arkansas.

Competitor B is closing a plant in Pasadena, California.

Walmart is in Bentonville, Arkansas.

Here’s why OODA loops can be so helpful:

  • Because OODA loops are not time constrained, you can effectively apply them during a meeting or in any time frame necessary, such as on the spot when the organization is trying to create a response to a new competitor initiative.

  • By using OODA loops and adding the orient step to your analysis, you generally reach more insightful and predictive conclusions that others who use a different approach.

Orientation: What are their motives?

The orientation aspect of OODA loops enables you to skip forward in your thinking and consider where a competitor is really going. When taking this orientation step, think about the competition’s purpose, motives, or objectives. Ask your Why? questions:

  • Why is Competitor B planning to build a new manufacturing plant?

  • Why in Bentonville, Arkansas?

  • Why has Competitor B gone public with this information?

Beware of responding to orchestrated leaks. For example, a competitor may launch a false rumor just to see how you react. By stopping to evaluate the meaning, purpose, and ultimate goal the competitor may have for leaking the information, you often end up one move ahead. You can then formulate a calculated response that doesn’t reveal anything about your core strategy or that even misleads your competitors.

Decision: What should we do?

At stage three in the OODA loop process, you must decide what to do in response to the insight you’ve gained. You basically have three options here:

  • Act immediately. If you deem that what you observe is a high-impact event, you need to respond immediately to take advantage of the opportunity or defend against the threat.

  • Monitor the situation. If all you have to work with are weak signals (hints of impending activity), you need to continue to monitor the situation and conduct additional research to determine whether the weak signals lead to high-impact events.

  • Do nothing. Not all intel needs to be acted on. You may discover that a competitor is pursuing an opportunity that has little chance of success. Doing nothing frees up your resources to pursue more promising opportunities while your competitor squanders its resources.

Action: Execute your response

Strategic initiatives that involve change fail roughly 80 percent of the time due to resistance to change and, ultimately, inaction. With that in mind, you need to be sure that you do your part to convince your executive team to implement recommended changes:

  1. Create a one-page summary document that clearly details the urgency and impact of the issue.

  2. Brief your team of internal sponsors (hopefully all the way up the organization to the executive level) and get their buy-in for further analysis and, ultimately, action.

Loop back

You’ve done OODA, now it’s time to loop back and do it again. The whole idea of an OODA loop is that if you perform all the steps correctly, you change the environment in which you operate, so you need to go back to the beginning and observe the new conditions. With OODA loops, you fine-tune your response and continuously adapt to the ever-changing environment.