How To Make Better Decisions Than Your Competitors


How To Make Better Decisions Than Your Competitors

Fergus Crokett

Competition is at the heart of any marketplace. A successful business owner needs to be as focused on their competitors as they are on their own organisations. 

One way to stay ahead of the competition is to make better decisions than them. To find out how to make better decisions, I'd like to introduce you to the ideas of the late American military strategist John Boyd. 

It's not a short story, but it's worth considering. 

John Boyd's Theory 

Boyd was a military strategist and his ideas add up to a theory about how conflict works. For Boyd, all conflict could be boiled down to a contest of minds. Mind vs Mind. These minds could be two people playing chess, or two generals commanding armies or two corporations - say Uber vs Lyft.

The weapons or the technology involved in the conflict don't matter. It doesn't matter whether the conflict occurs in a marketplace or across a continent. 

In Boyd's view all conflict was a contest of one mind against another. Let's look more closely at the theory: 

  • Question: how does a mind fight? Boyd's answer: A mind fights by adapting.

  • Next question: how does a mind adapt?

  • Answer: a mind adapts by making decisions. The better/faster the minds decisions the the greater our chances of success/survival.

How do we make decisions? 

How do we make decisions? Boyd believed that most organisms made decisions in the same way. He created a simple model to show how this worked and called it an OODA loop. This is the model:

  1. Observe. Gather data. Figure out what's changed. Objectivity is vital.

  2. Orient. Understand the data that's been gathered. Reference past experiences. What does it all mean?

  3. Decide. What should be done?

  4. Act. Make the decision real.

There we go. So what does all this decision making stuff mean for you and the competitive marketplace your business operates in? 

Applying the theory to practice 

Boyd applied his theory to conflict. Put simply, Boyd thought that all conflict was between competing OODA loops. The side with the faster and better OODA loop almost always wins any conflict. Why? Because they adapt quicker. 

A faster OODA loop means that you complete a decision making loop more quickly than your competition. By the time your competition is responding to your actions, you're already making your next decision. Get far enough ahead of the competition and their ability to make decisions will be completely compromised and eventually will collapse. 

Making better decisions 

To make better decisions than your competitors you need faster and better OODA loops in place throughout your organisation. Make sure your business strategy reflects the reality of the marketplace you're in. Make sure you have the ability to forecast marketplaces changes accurately. Make sure your strategy contains important data and that you're able to look at it objectively.

Anything that distorts the picture needs to be removed. 

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