Chet Richards on Applying OODA Loops in Business (Part 2 of 2)
In August of 2020, Matt Devost and Bob Gourley spoke with Chet Richards, who was a close associate of the late US Air Force Colonel John Boyd. He was there as the concept of the OODA Loop was being developed and constructed into the first graphics of the OODA Loop from sketches Boyd drew. Chet is the author of the widely read business book Certain to Win which was the first book to describe Boyd’s strategy in terms familiar to business leaders and show how the OODA Loop and associated Boyd concepts apply to today’s business problems. Chet has consulted with a number of aerospace and professional services companies and has lectured at the Air War College and the Army’s Command and General Staff College.
Colonel Boyd never wrote a business book himself, but he read and commented on every version of this book’s manuscript till his death in 1997.
In this conversation, Richards shares his, and Boyd’s, perspectives on applying the OODA Loop in Business.
“…the idea of keeping the initiative I think runs through all implementations of Boyd’s work – business as well as war.”
Gourley: The way I understand your book and the way I understand the OODA Loop is: this is not passive. You do not sit back and wait for information to come to you when you are making decisions. And I know that is critical in business. Successful business leaders are not sitting back in a passive way.
Richards: Absolutely. Boyd starts out with ‘Patterns of Conflict’, essentially giving you the answer. He says: organizations require four things in order to be successful at the very highest level. They require a variety of things that they can do, and the ability to rapidly switch between them. In order to do this, we need to harmonize the actions of the people within the organization. And the very last one is we always need to keep the initiative. Internally, initiative just pumps morale through the ceiling. Externally, it confuses the hell out of the other side.
You know even if you look like you’re being passive, you are not. The key is to keep the initiative. Well, I think the key to the OODA Loop is being aggressive. And I said, no: that is wrong. If you are aggressive, you are predictable. The opponent can pretty much figure out what you are going to do. However, you have got to always keep the initiative. So, think of an ambush, for example, who has got the initiative in an ambush? Even though you are sitting there, you look like you are passive. You set it all up beforehand. You lure the other side into the trap. All that is you taking the initiative.
Of course, then you spring the trap and that is the coup de gras, but you never lose the initiative. You see the other person is not falling into your trap, you immediately pull your ambush back and do something else. And that is something that he got from the Germans who told him: “offense. Defense. Those are just words. Instead, what you must always do is keep the initiative.” So it is a very, very good point that you make.
Gourley: And so relevant to business. So thanks Chet.
Richards: Oh yeah, absolutely. Absolutely. That’s one of those areas where war and business kind of intersect. They are such different endeavors, but you have to go to very long lengths not to see the very strong links between the two. War always focuses on the opponent and in business, we do not have opponents. We have competitors and tomorrow they may be partners. And of course, the day after that they may be your boss, you know? But that is okay. An acceptable outcome for a lot of people in business is to have your business bought up at an outrageous price by somebody else. Whereas that is generally not an acceptable outcome in war. But the idea of keeping the initiative I think runs through all implementations of Boyd’s work – business as well as war.
“You set the objectives, the high-level stuff. And your real job is to kind of get this intuitive feel for how it is going.”
Gourley: Something you just made incredibly clear is these CEOs – you mentioned initiative, you mentioned agility, you mentioned survival, you mentioned strategy – they should all take to the OODA Loop without even needing to know what that concept is – because if you are a successful CEO, you already know that, at best, your strategy is only good once. It must be dynamic or you are certain to lose instead of being certain to win. I wanted to ask other thoughts on what you would say to the CEO about John Boyd and the OODA Loop and how it applies to CEO decision-making?
Richards: It is a really, really interesting question. I think the point of interest for me there would be: what do CEOs really do? And we talk a lot about decision-making – and decision-making is important because it selects an action from among a universe of potential actions – and it acts as a harmonizing device. So, to put it in Boyd’s terms. What he is really talking about is, a vast majority of the time, if you are doing Boyd right, most people should know what to do most of the time. So, then the question becomes then what is the CEO’s job? And that is where I think, if you take the next step with Boyd, it is leadership and appreciation. And again, I think most in fact, maybe all, successful CEOs have been successful over a period of time.
But what happens is if you are not, then the people within your organization that are really good will leave and go somewhere else or start their own company, or they will get together with a bunch of their folks and start a company. In other words, you can only be a lousy CEO for so long, or again, as Boyd used to say well, you know, General Motors did not operate according to [the OODA Loop] and they were successful for so many years. And you had two answers to that. Well, where are they now? And the second question is who is the competition? He said it is not necessary that you exercise his philosophy perfectly. You have to be better than your competition. He said that is really the mark of a maneuver-based strategy.
As opposed to what we call a fault strategy. A fault strategy is if it does not work, People say, well, you did not do 8.3 correctly. And all of this stuff, if you use it a little, you get a little. If you lose it a lot, you get a lot. And that is a quote from Sun Tzu. And like I said, Boyd, this all goes back to Sun Tzu. And he said is the real, real, real job is that leadership and appreciation job. And again, he came out of the military. There is not enough time to make decisions with everybody in your organization. You set the objectives, the high-level stuff. And your real job is to kind of get this intuitive feel for how it is going. And you may remember there was a thing called the Ohno circle in the Toyota production system.
Taiichi Ohno, one of the creators of the Toyota Production Circle, said you can walk into any factory that claims that is using the Toyota Production system and you draw a circle, and you stand in that circle, and you close your eyes, and you just listen and I may be exaggerating a little bit because you can keep your eyes open if you want. But he said, you can quickly tell if they are using our system or not, because you have such an intuitive feel for how it is supposed to be, for what the level of activity is, for the talking back and forth and how often, and the level of general chatter. You can tell if things are not flowing. He said once you understand that, you can develop this intuitive feeling and that is what you want to use.
“…you can tell when your organization, like a finely tuned machine, is not working right. It is a machine with parts that think. So, you have got to be really careful with the machine analogy there.”
So that’s what I think I would tell if a really good CEO has an intuitive feel for how well his organization is doing. And let me switch over to make it a little less gender-specific. Their ability to exercise that feel and influence their organization is really what we pay them to do because they are the only people that can do that at the very highest level, they are the only ones that really understand if their organization is working properly – and what to do if it is not working properly to get it working properly. Then the organization does the work of the organization. The really, really good CEOs do that. And this is not to say that they do not get involved in, you know some of the details: the design of the packaging or the desired ad campaign and all of that.
If they’re getting a lot of designs that they don’t like, then they need a new ad agency, and their job there is to figure out how their marketing people came up with this bunch of clowns in the first place. Maybe kind of help them work through their problems. So that would be my advice. Boyd said: it is all about orientation – orientation as your mental model that makes predictions of the future. And their real job is to try to get everybody’s mental models to make better predictions in the future because once they start making better predictions of the future, then things happen the way they are supposed to happen.
And so when I talk to a CEO, say, in an office environment, it may not be possible to close your eyes and sense how it’s going to work, but you can sense how it is working from other things: people’s attitude at the staff meetings; are they sitting around water coolers talking to each other?; Is the building emptied out at 5:01 PM?; No, it’s not emptied out? It is only because they are waiting for you to leave. And they leave one minute after you leave, you know, that kind of stuff. And you really know what you are doing, people cannot fool because you built the organization, you either created it and you came up through it and you came up through similar organizations. You can tell when your organization, like a finely tuned machine, is not working right. It is a machine with parts that think. So, you have got to be really careful with the machine analogy there.
Watch or Listen to the Full Interviews:
Certain to Win: The Strategy of John Boyd, Applied to Business by Chet Richards
Chet’s Blog – Slightly East of New
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