The
traditional models of strategy development are failing in the fast
paced requirements of today's marketplace. By the time a strategy is
codified and diligently translated down the organization, that strategy
may already be out of date. The core of strategy work is no longer the
activity of an annual planning cycle but has instead become a daily
effort to navigate in increasingly cost competitive environments. Global
competition and difficult market circumstances are demanding more than
traditional models of strategy development can sustain.
The basics of front-end strategy development, including market situation and competitive assessments, still remain valuable, but these basics must transition from ad hoc to continuous processes. The new model for strategy development is not about establishing a certain vision, but rather about developing a capability to observe and react to both challenges and opportunities with flexibility.
John Boyd (January 23, 1927 – March 9, 1997) was a U.S. fighter pilot that used his insight and skill as an air combat pilot to design modern fighter aircraft and develop air combat strategy. Known as the father of the F-15 and F-16, Boyd's key contribution to military strategy was the recognition of the inherent advantage in the process of decision making and execution maneuverability. When business strategies played out over the course of years, slower models could achieve promising results, but the pace of business and environment changes has increased dramatically. The velocity of modern business requires a baseline process that operates on a faster time scale which makes Boyd's Observe Orient Decide Act (OODA) Loop a better strategy model for business success.
Boyd's OODA Loop
Observe
=================================================================
Bradford Leach is a Senior Global Business Leader with an MBA from Harvard Business School. Brad has extensive experience in P&L Leadership, Strategy Development, Global Marketing and Operations Turnaround. Brad is a subject matter expert on new product development and launch as well as product pricing to capture value.
Brad is the founder and Managing Partner at Canmore Creative Group™, a strategy and content marketing consulting firm.
Brad is the founder and anchor writer for RandomClarity™ where he writes on current topics about business, education, health, news and politics (www.randomclarity.com).
The basics of front-end strategy development, including market situation and competitive assessments, still remain valuable, but these basics must transition from ad hoc to continuous processes. The new model for strategy development is not about establishing a certain vision, but rather about developing a capability to observe and react to both challenges and opportunities with flexibility.
Velocity
John Boyd (January 23, 1927 – March 9, 1997) was a U.S. fighter pilot that used his insight and skill as an air combat pilot to design modern fighter aircraft and develop air combat strategy. Known as the father of the F-15 and F-16, Boyd's key contribution to military strategy was the recognition of the inherent advantage in the process of decision making and execution maneuverability. When business strategies played out over the course of years, slower models could achieve promising results, but the pace of business and environment changes has increased dramatically. The velocity of modern business requires a baseline process that operates on a faster time scale which makes Boyd's Observe Orient Decide Act (OODA) Loop a better strategy model for business success.
Boyd's key concept was that of the decision cycle or OODA loop, the process by which an entity (either an individual or an organization) reacts to an event. According to this idea, the key to victory is to be able to create situations wherein one can make appropriate decisions more quickly than one's opponent.Any business leader can understand the benefit of outmatching competition when it comes to decision making speed, but how much time and energy do you invest in developing that capability internally? An assessment of the field of play is important, but capabilities and organizational learning that creates decision making speed is the key to winning.
Boyd's OODA Loop
Design Business Units like Jet Fighters
Business units today need to be designed like jet fighters rather than tanks. Business units need to be lean, fast and aligned with a clear understanding of the overall business objective. Business Units must develop an inherent capability to interpret how decisions and actions interact with the business environment. Businesses must be designed with inherent flexibility to be able to maneuver and have sensitivity to fast feedback loops, packaged with a great deal of noise."Time is the dominant parameter. The pilot who goes through the OODA cycle in the shortest time prevails because his opponent is caught responding to situations that have already changed."~Harry Hillaker (chief designer of the F-16)A winning strategy is no longer a formula to follow nor is it about one decision. Strategy is about a set of decision making capabilities that are necessary for execution against the overall mission through interaction with the situation and environment. Business leaders should evaluate how equipped and effective their businesses are at each phase of the decision making process.
Observe
- How does your business collect competitive intelligence?
- How does your business read customer environment changes?
- What outside data is collectible and can your business interpret it dynamically?
- Who is responsible for external technology scanning?
- How quickly are targets identified?
- How good are your forecasts?
- What feedback loops inform observation?
- How did customers react to your last decision?
Orient
- What are your internal core competencies?
- What resources are at your disposal?
- How are competitors positioned?
- What trends impact the market?
- What is the technology landscape?
- Which feedback loops inform orientation?
- Did the market shift based on your last decision?
- How are opportunities uncovered?
Decide
- Is the operating window clear and specific for decision makers?
- What fixed items are actually variable?
- Does a hypothesis testing approach exist?
- Which feedback loops inform your decision making?
- What is plan B?
- If action is taken, what are the worst and best potential outcomes?
- Is the duration of decision making measured?
- Is your business open to opportunity?
Act
- What is the duration between decision and action?
- How closely do actions match decisions?
- What outcome measurements are formalized?
- How sensitive is your organization to a change in direction?
- Are actions connected back to observation and orientation?
Choose Capability over Another Study!
As a business leader, the selection of a strategy practitioner is often a difficult process. There are a number of excellent firms that offer extensive research and will package an attractive set of strategic options together. As useful as such a study can be to answer questions about the field of play, these expensive packages become worthless quickly. The half-life for strategy today is very short and getting shorter every day. Rather than invest in a traditional and expensive strategy study, invest instead in your business's decision making capabilities. Focus on selecting a strategy provider that can define and develop your business's internal capability to create strategy and make strategic decisions with speed.=================================================================
About:
Bradford Leach is a Senior Global Business Leader with an MBA from Harvard Business School. Brad has extensive experience in P&L Leadership, Strategy Development, Global Marketing and Operations Turnaround. Brad is a subject matter expert on new product development and launch as well as product pricing to capture value.
Brad is the founder and Managing Partner at Canmore Creative Group™, a strategy and content marketing consulting firm.
Brad is the founder and anchor writer for RandomClarity™ where he writes on current topics about business, education, health, news and politics (www.randomclarity.com).
No comments:
Post a Comment