Applying the OODA Loop to Lean


Published on

This is a transcription of a Business901 podcast with Dr. Barnhart. We discussed John Boyd's OODA Loop principles and how they apply to Lean.

Applying the OODA Loop to Lean

  1. 1. Business901 Podcast Transcription Implementing Lean Marketing SystemsApplying the OODA Loop to Lean Guest was Dr. Terrance Barnhart Related Podcast: Applying the OODA Loop to Lean Dr. Terry Barnhart, the Senior Director Strategy and Continuous Improvement at Pfizer Global R&D discusses the OODA Loop in this Business901 Podcast. We expand this theory into some practical applications and using the OODA Loop in and outside of rapid deployment. Dr. Barnhart has an upcoming book due out at the end of the year on using Lean in Product Development. It will be published by Productivity Press. Applying the OODA Loop to Lean Copyright Business901
  2. 2. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe Dager: This is Joe Dager, the host of Business 901 podcast.Joining me today is Dr. Terrance Barnhart, the Senior Director ofContinuous Improvement in the Strategic Management andleader of Pfizers Agile R&D Team. In his current role, Dr.Barnhart develops a lean transformation effort designedspecifically to implant fast learning systems to improve theinnovation, quality and speed of pharmaceutical R&D. Terry hasjoined me on the podcast today to discuss John BoydsOODA-loop principles.Terry, could you start out by finishing that introduction and thentell me how you first became familiar with Boyds OODA- Loop.Dr. Terrance Barnhart: I became interested in BoydsOODA-loop because of a friend of mine who had mentioned himin passing in one of his short courses. Your readers or yourlisteners might be familiar with Jim Luckman from some otherwork that youve done. He didnt have anything other than thename associated with him and that was just too intriguing. Istarted looking around and I found a gentleman by the name ofChet Richards, who still holds some of the Boyd work and stilltalks about some of the Boyd work. With Jim, we went to talk toChet, and I think we spent 16 hours talking to Chet about theOODA-loop and about Boyd, because of course Boyd had passedon some years ago.I was fascinated by what the thought process was and the studythat Boyd had, and Ive been a student ever since. Ive tried veryhard to learn as much as I can about this because theimplications for lean the implications for innovation and theimplications for teams are just tremendous.Joe: For the people that arent familiar with the OODA-loop, itstarts out as Observe, Orient, Decide, and Act. This is what theacronym stands for. People think about it from a military Applying the OODA Loop to Lean Copyright Business901
  3. 3. Business901 Podcast Transcription Implementing Lean Marketing Systemsviewpoint, because thats where Boyd originally developed itfrom, as combat airfare, was it not?Terrance: Well, I think he got it from that, but only thatreflection from his later work. It really stems from his study of3,000 years of warfare and specifically the 30% of wars that areactually won by the weaker, smaller opponent. It turns out, in hisstudy; he demonstrated that in every study that he could find,every war that he could study, the party that learned the fastestwon every single engagement. I mean, it might lose a particularbattle, but they always won the war.He studied that and he thought back on his time as a fighter pilotand theres some great stories about him never actually losing anair combat simulation as one of the lead instructors at Top Gunfor the Air Force. His early work as a fighter pilot just fed thatthought process that became the OODA-loop.Whats interesting about the OODA-loop is that unlike PDCA orDMAIC, which we think about which are really based on science,and how we think about science, the hypothesis generation, andso on, what Boyd talks about in OODA, in particular, the secondorientation is really about the entirety of the thought processesthat we have, all of the mental models, all of the assumptions, allof our backgrounds in genetics, make up our personal orientation.If we have very flexible orientation, what this means is, as thingsin the outside world come to us, we will be able to considerdifferent options as to what that means, how it might fit withother things that weve seen, and what we might do in the future.Now this becomes very important in war in that, when bombsstart flying, when smoke is around you and things are very, verythreatening, peoples orientation locks. They stop being able tosee the outside world in any sort of objective sense. They stopbeing able to think about how it compares internally to other Applying the OODA Loop to Lean Copyright Business901
  4. 4. Business901 Podcast Transcription Implementing Lean Marketing Systemsthings that theyve seen, other things theyve thought throughand they stop being able to act entirely and when that happens,their hands go up, and they surrender.I think the best example of this, a recent example, are the twoGulf Wars in which the same exact strategy was used against thesame exact army with the same exact results. Theyve lockedtheir orientation. As a result of that, even though they knew thesame thing was happening, they couldnt find another way toapproach it.Joe: One of the things, when I look at the OODA-loop, thatsurprises me - its applied to air combat and Top Gun school butit is also applied to a whole war effort. Its like theres a wholedifferent tempo to it, or cadence that can be developed. That tome, is a hard thing to grasp.Terrance: Thats a really good point, and I think thats the realgenius of what Boyd was able to do. He did an awful lot of work.Theres this really nice slide deck on what he called the organicdesign for command and control, in which he takes theOODA-loop from the individual and expands it all the way out tovery large organizations and everything in between. The reallyslick thing about it is that orientation exists within the individual,but it exists within groups as well. So we, as Americans, have acertain orientation about government that it should be of thepeople, by the people, and for the people. We have a verydifferent viewpoint about other countries because, for so much ofour history, weve only had two on our borders.But theres so much distance between the U.S. and Europe, forexample, and the Far East that it creates within Americans adifferent viewpoint than Europeans have. Theres nothing wrongwith that, thats just a result, but it becomes this societalorientation. Applying the OODA Loop to Lean Copyright Business901
  5. 5. Business901 Podcast Transcription Implementing Lean Marketing SystemsNow whats interesting is you can create more flexibleorientations with practice. You can create more flexibleorientations by trying many different things. Just think about asmall group. If you are a basketball coach, you want thosebasketball players to be able to handle very tall centers, you wantto be able to handle very fast teams, and you want to be able tohandle very controlled teams.If you think about the various things that might happen on thecourt, you want your team to be able to adapt instantly to anychanges and styles that they see, whether theyregame-to-game, or within a game. The team that can do that thebest will have the best chance of winning on a very, very regularbasis.Boyd talks about it in terms of small unit action. So if youre asmall Marine unit, you want to be able to be very, very fast atassessing things at the local scale. If youre the Marines as awhole, you want to be able to assess battlefield situations, oreven entire theater situations and be able to adapt to them asthey move. So its really fractal. It starts with the smallest andends up at the very largest scale.Joe: We center on the Orient section of the OODA-loop becausethat seems to be that gray area, that gray matter thats going onin our mind. Its all of our traditions and the new information andour heritage that is affected. Were doing this spontaneously too,in a cockpit. Those things are still affecting us?Terrance: Right. Maybe Ill go through the whole OODA-loopand just talk about it in the context of a cockpit and maybe in thecontext of Boyd because he used this to win engagement afterengagement. He had a standing bet as it turns out to win thesethings. But if hes got somebody on his tail, hes going to trysomething. Hes going to dive, hes going to go up, hes going to Applying the OODA Loop to Lean Copyright Business901
  6. 6. Business901 Podcast Transcription Implementing Lean Marketing Systemsdo something, and hell be looking to see what it is that you do asa result of that.If you follow him, and you stay on whatever his move is, hehasnt gained against you. But if he doesnt something thatsunexpected and it takes you a little bit longer to react than it tookhim to do it in the first place, he can make another move. So hesnow observing you. He does something, so he acts. He observesyou, and you do something. If he sees a break between youraction and the orientation he thinks youre going to have, he cannow exploit that.So he can decide on another action. He can either extend whathes doing, he could do another unexpected action, and then heacts again. So what hes doing is observing you, reorientinghimself, deciding, and acting.The faster he does that -- so, if Im on his tail, and were doingthis, if he gets a little bit ahead, and then he gets a little bit moreahead, he is operating his OODA-loop faster than Im operatingmine. In the military sense, they call it, "Operating inside of theirdecision loop, or operating inside of somebodys OODA-loop."Thats Boyd, operating his learning cycle -- his Observe,Orientation, Orient, Decide, and Act cycle -- faster than I amoperating mine. If he does that for any length of time at all, hewill be on my tail, shooting me down.Joe: He reacts very quickly and decides, and then acts again,decides, acts again, and brings out a stronger differential, astronger differential advantage. This is warfare. How are weapplying that in todays world? How are you applying that in Leanor R&D?Terrance: Well, in Lean, lets start with Boyds thought, and hethought that Toyota was the -- I dont know how broad a study Applying the OODA Loop to Lean Copyright Business901
  7. 7. Business901 Podcast Transcription Implementing Lean Marketing Systemshe did, but Toyota was the one, very easy, shining example hehad of a company that operated a fast learning loop, thatoperated an OODA-loop. Other companies were either notlearning, or they werent learning nearly as quickly. He could seeToyota separating from the rest of the automotive industry. Ifyou think about the applications of the OODA-loop in yourorganization, my organization, or someone elses organization,we could imagine us using this in a competitive sense that is adestructive sense to overtake the competition.Wherever we are now, if we start operating inside of ouropponents OODA-loop, we will pass them, and we will do so invery short order. Thats one way to use it. So if you could createwithin your company, for example, this high learning rate, youwill pass you opponent.Chet Richards has a whole book entitled, "Certain to Win," onexactly that principle. So thats one, but the second is if yourethinking about installing Lean in a company and the companysnever seen it before, or in a new area of a company.R&D is a great example. Thats where I sit. R&D has never seenLean before and very well may have unhappy associations withthe word "lean" and "mean." They may have heard of things thatthink its a manufacturing gig, all this kind of stuff which may ormay not be true.But if youre going to overcome those things, essentially youmust have a faster learning loop than the company does, indestroying your ability to create within that company. So you cancreate strategies that are specific to improving the company,using this OODA concept.Joe: Is it a problem solving or is it a decision making type ofmethodology? Applying the OODA Loop to Lean Copyright Business901
  8. 8. Business901 Podcast Transcription Implementing Lean Marketing SystemsTerrance: Thats a really insightful question. So if you look atPDCA, its very much a problem solving sort of concept. I wouldsay this is similar between the two. Or you are solving problemsvery, very quickly, but not in the demonstrated "by God, we knowthis is the case," sort of sense that PDCA would. The deep level ofproblem solving isnt really so much required as the fast problemsolving. So you can think of it as problem solving, or you canthink of it as decision making.I would prefer to be a little non-committal on that. Because if Ithink back to orientation, any time that I can look at a problemand re-orient myself in such a way that that problem eitherdoesnt exist or I can now find a path to its overcoming, Ive doneessentially the same thing, but with a different nuance to it.Now in R&D, this is really important, because in R&D often theproblems are fairly ill-defined. In the past, two of them are reallynot so well understood. Its so much of an orientation game,sitting with a problem long enough to be able to reframe it in away, in your mind, so youve got an orientation so that you caneven start against it.When youve got problems like that, OODA -- Im not saying itsjust a better way to describe it, its not really so much different,and it’s just an easier way to describe that mental process ofcreation and innovation. Does that make sense?Joe: Its like a current state model of how you make a decision,and then you go forward to make some changes and develop ahypothesis to the outside world, lets say. Or to a customer, makethat hypothesis and you test it out on a customer and see how itacts, and then you observe it, and you come back. How does itmake you change? Because you have your mental model, is itjust in the recognition that there is a change out there, that youhandle it? I guess Im struggling with the question a little bit. Itseems like you already developed a mental model. Applying the OODA Loop to Lean Copyright Business901
  9. 9. Business901 Podcast Transcription Implementing Lean Marketing SystemsYou try out the hypothesis on, lets say, a customer, and thenyou watch the customer act. And your action -- I guess you actfirst in applying that decision, you watch the reaction of that, andyou adjust to get what you are really looking for then, right?Terrance: This really drives in to a lot of the interestingdifficulties with discussing the OODA-loop that youve experiencedyourself. The really fascinating thing is that when youre workingas a small unit, for example, what you really want to do is createunconscious capability against known approaches. So whensomething brand new comes up, you can spend all of your mentalenergy around that. And even then you want to have as broad anorientation, or as fluid an orientation, as you can. Where thatpreset stuff breaks down is where the people who are really goodand really fluid come to the fore. But the guy whos flying in afighter jet wants to have very, very quick response on things thatare fairly well known and established.So the thing that youre looking to understand is how does anorganization reorient itself? The orientation itself is wrong, andBoyd would make that quite clear up front. Its not that its wrongbecause you dont want to have a good mental model, goodunderstanding, good current state of what the world is like. Itsjust that our minds are very small, and the universe is very large.So everything we have is this tiny model of whats possible.What we want to do is to create the ability to change ourorientations very quickly. Faster than in the case of war: ouropponent. Faster in the case of business: our competitor. Fasterthan the universe as a whole: in the case of our personal growth.So what does that mean? It means that if youve got cannedresponses that are faster than someone elses, you dont have togo through observe, orient, decide and act. Its almost like youobserve and act. Applying the OODA Loop to Lean Copyright Business901
  10. 10. Business901 Podcast Transcription Implementing Lean Marketing SystemsYou cut through, right through the center of that. Its when youdont have that opportunity -- lets use your example, which Ithink is really good. When you go out to your customers and testsomething and come back, and try something else again as aresult of that.Toyota did a great job when they launched Scion, in that theystopped doing full-on North American launches. They launched inCalifornia with a bunch of different ideas. And then they launchedin -- and I dont know exactly when the sequence was. But thenthey launched, say, in the Southeast. And then they launched inthe Midwest.Everywhere along that, they were learning about the audiencethey were trying to connect with. What kind of advertising, whatkind of accessories these people would want, and what kind ofbasic market presence does Toyota need to create in order toaccess that young market they had had so much trouble with.Its a much longer learning cycle than you would have in thecockpit of a fighter jet, but think of how much faster that learningcycle is than launching a Celica GT, and then waiting to see if thecustomers are going to show up, and then two years laterlaunching another version, or three years later, or something.Much longer learning cycles than this idea that they took throughtheir marketing.So what really is very valuable with this whole idea is how youcan create within your organization, the ability to access whereyour mental models are wrong, very, very quickly. Adjust yourorientation very, very quickly to adapt to that.Joe: If you have that mental model, part of the orientation isthat you continue on with what you know, because it allows youto concentrate your efforts on the changes that are happeningaround you. The part that you really know and are at your core Applying the OODA Loop to Lean Copyright Business901
  11. 11. Business901 Podcast Transcription Implementing Lean Marketing Systemsprinciples, your core belief, let’s say as a company. You know thatis what works for you. You do not have to change any of that.What you have to do is adjust to the outside surroundings andconcentrate, and tweak your efforts on that to be successful.Terrance: Exactly. Joe, youve really hit it. If you think about itin exactly those ways, what you are looking is pinging the outsideworld with your company. Who do you have out there? Do youhave your engineers out there? Or do you just have yourmarketing guy. Do you have your sales people coming in to yourengineering area, or dont you? What are you doing to feel whatsgoing on in the outside world? Because the outside world in doinga whole bunch of things to screw you up. There are newinnovations all the time. Disruptive, some just incremental,whatever it may be. Youve got competitors that are trying to eatyour lunch. You got new people coming in from you know othermarkets that are trying to, you know work you on the edges andall that kind of stuff.How are you out there observing the outside world, and thenadapting your orientation, and then acting against it? So if youfind out that your product development is twice as slow as yourcompetitors, you need to do something, because they will killyou.If you find out that you are twice as fast in product development,and getting the right kind of stuff on the market, you know youprobably want to look at some other part of your organization.Maybe you really could do some great stuff with those newproducts with a really interesting work on marketing.Theres a whole lot of different things you can do, but if yourenot pinging the outside world, if youre not getting thatinformation and accessing it against how you think now, thensomebody is going to do it for you. Applying the OODA Loop to Lean Copyright Business901
  12. 12. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: You hear people talking about operating inside theopponents decision space. Were inside the OODA-loop, can youkind of expand on what that means a little bit?Terrance: Well essentially that just means that they arereorienting, deciding and acting faster than you can do the samething. So, if Im a small part manufacturer and Im turning overnew types of products or getting into new kinds of business twiceas fast as my competitor, their products will seem old veryquickly. Or Ill have been able to look in new areas that they cantaccess because Ive just been able to get to different parts of themarket and so on. Probably the best example of this is theYamaha/Honda wars, I think its 1983-ish, where Yamaha built abig plant and announced that they were going to take overnumber one in the motorcycle industry.Honda didnt fancy that, so Honda brought out something like 63new models in the next 18 months, some ridiculous number.Because they did that, their R&D was creating new models,testing it in the market. Come back, change, and test the newmodel in the market. Change; test the new model in the market.They could do that literally two to three times faster than Yamahacould.As a result of that capability, Honda was developing motorcyclesthat looked, felt, and acted different and were more aligned withthe market as they went than Yamaha. They were operatinginside Yamahas decision loop. They were operating insideYamahas OODA-loop.Joe: How does OODA apply to other businesses?Terrance: I think that OODA, if you think about just from thatdescription of a learning loop, that could be at a very strategiclevel. It really can apply to any business thats really thinkingabout where it wants to move next. Because you can define that Applying the OODA Loop to Lean Copyright Business901
  13. 13. Business901 Podcast Transcription Implementing Lean Marketing Systemsup front, or if you have a very high learning loop, you can havethe market define it for you. And that means just what Yamaha,or what Honda did. That is, they came to the market and themarket told them something. They turned around and pinged themarket again with a new product. The market told themsomething, and they kept popping these things out. As a result ofthat they sent themselves in new direction that they might nothave done had they not been at that speed.You can do this if youre a small company. You can do this very,very rapidly. If youre running small and Im going to sayrelatively non-complex. Everything is complex, as we know, but ifyou have relatively easy changeovers from model to model, if youcan drop the cycle-time to bringing a new model out, you canintroduce it at small levels.This is just like putting out some flow, packets of flow, just likesending stuff out to the market to see what happens. Modifying itand let the market pull. This is a really nice link back into lead.Because if you can do this if you have a high OODA-loop, themarket will pull good stuff out of your company. At least thatsmy belief. Havent tried it in person, but I think the evidence isthere.Joe: Oh, I think it will. If the marketplace sees it, reacts to it,they will pull it. I use examples like YouTube starting as a datingservice. The customers pulled the good things out of that datingservice, the videos.Terrance: Yeah, this is a really good point because the Internetbusiness landscape is just one big gigantic pull from themarketplace. If stuff works, it grows like Facebook and Googleand these kinds of things. They just explode. If people dont findit very interesting they might limp along. If people arentinterested at all, nothing happens. The thing is if you will, theeconomy or a segment of the economy is acting. You probably Applying the OODA Loop to Lean Copyright Business901
  14. 14. Business901 Podcast Transcription Implementing Lean Marketing Systemswant for your company as the single entity to do this, rather thana whole bunch of these and a whole bunch of other stuff doing itfor you. You would like to get it on a regular basis. I think youddo it, but you again have to be operating at this high learningloop speed.Joe: How does it -- OODA-loop -- actually apply to strategy? Imean, you think about it, war as a strategy. Whats theconnection between your strategy and OODA-loop?Terrance: The connection between OODA-loop and strategy isthat you want to run a strategy that has a high learning rate. So Iwill give you the rather unhappy example of the blitzkrieg,because its really pretty fabulous in this respect. All thenegatives aside and we understand that its a very negativeexample. What they did in the blitzkrieg was to find the placeswhere there were openings and run through the openings andthen curl around behind and attack the opponents from theopposite side. Their strategy was to take, for example -- Im justgoing to make it up -- take Paris. But what they did in fact was tolook for openings in the lines and start cleaning out from behindthe opposition forces, in a way that the opposition forces couldnot react.Their strategy was two-fold then. Its the objective, which wouldbe the city they were trying to take and a thoughtful approach todoing so. Which was, were going to apply probes everywhere,and as soon as we find a place thats soft, were going to runthrough there.Were going to keep a couple of better probes going so we findanother place thats soft and run through there. So you have gotfour or five different forks coming through, its going to happenso fast that the opposition wont know what to do about it. Oncethey are surrounded, their orientation will lock and they willsurrender. Applying the OODA Loop to Lean Copyright Business901
  15. 15. Business901 Podcast Transcription Implementing Lean Marketing SystemsHonestly its the same basic approach that was used in OperationDesert Storm and so on in the Gulf Wars. So, from a strategicpoint of view, if you are a company it probably will look differentin that you will have different goals, they wont be destructive.But you will have essentially the same idea, so lets go back toToyota going in its launch of Scion.Theyre probing the marketplace, when they find something thatworks theyre going to use that in the next probe of themarketplace. As a result of that, their strategy of achieving asolid commercial launch with high up-take in their chosen spaceis far more successful. Its not a big batch thought, its aboutsmall packets of learning and building those small packets intothat large value, just exactly like Lean.Joe: The OODA Loop has come to the forefront in the last yearor two, more so than maybe what it did for the previous five, oris that just my lack of knowledge of this subject? Are peopletalking about it more, are you seeing it more?Terrance: I dont think thats just your imagination. I think thata couple of things happened. First, there was a biography of Boydby Quorum, which is actually a fabulous book. Its like 1,200pages long but its very fascinating. Its fascinating stuff. I thinkthat started popularizing stuff. The second is that it really tookhold in the military in the last 10 or 15 years. Things take a whileto filter out of the military. So as people are coming back fromhaving been on the ground using this sort of thought process, itstarts getting into everyday life. I think thats another aspect ofit.I think its just, for example, people like you or me who havebeen talking about it in our environments, that someone elsepicks it up and they spread it. Youre just starting to see thenetwork coming alive with the idea. Applying the OODA Loop to Lean Copyright Business901
  16. 16. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: Ive seen it in the Lean software area more than otherareas, and in the innovation area where theyre looking at theloops. In the agile methods where they talk about the OODA-loopmore because it seems a nice pattern to ground them in how theyinclude the customer and how they orientate themselves to thecustomer. Thats where I first noticed it.Terrance: The analogy is really perfect. The really top agileprogramming folks are compiling every 20 minutes or something.Their learning speed is unbelievably short. Their learning loopsare just incredibly fast. So I dont think theres anywhere elsethat runs a clock speed anywhere near as high as those folks. Icould be wrong, but to your point, I can easily see it taking off inthe programming area.Joe: How does this work in a team concept? Or does it?Terrance: Yeah, it depends on how you think about it, Joe. In ateam concept, youre trying to create a team that has a higherlearning speed and is capable of reorienting. So there are twothings: capable of reorienting very, very quickly on the basis ofnew information. Flow sports are great. If you watch a hockeygame you see a team that shoots a puck in somewhere, theressome flow to it, it bounces in a different way, something like that.The teams that are really, really good automatically adjust,actually without thinking but almost without any hesitation at all.Theres almost no timeline between something strange happeningand then flowing to the right place to be when that happens.Why this becomes an advantage is, even if youre slightly faster,someone whos out of position for even an instant, opens up apassing lane and an open passing lane leads to a breakaway, abreakaway leads to a goal. You know, if you think of the old, theNBL Lakers, Magic and Worthy and so on, were fast-breaking likecrazy. Those guys could turn an opportunity from nothing intotwo points just like that. Applying the OODA Loop to Lean Copyright Business901
  17. 17. Business901 Podcast Transcription Implementing Lean Marketing SystemsI think the analogy is really clear that with teams, the ability toturn as a unit starts to become the really, really big thing.Joe: When I look at something such as pair-programming. Ivetalked to some other people about the collaboration and how youcan instantly have quality built in the more collaboration youhave, because of the fact that you have that feedback, thatinstant feedback, where youre sitting there with that decisionyou make and youre not waiting for feedback, lets say from acustomer out there, youre getting it from the person right nextto you.Terrance: Well, thats right. As a matter of fact one of myfavorite teams here at Pfizer, they felt that their inclusion of newdata from outside, as well as their ability to share informationinside, was too slow. So they would digest the paper -- a newpaper would come out in one of these major scientific journals. Itwould take a couple of weeks and then it would get into themainstream of how they were thinking and then they would havea new direction come out. Imagine thats a couple of weekswhere youre doing the wrong thing or you could be doing thewrong thing. You could be spending a couple of weeks of researcheffort against something thats going to turn out to be notvaluable and you could have known it two weeks prior.This team thought about that problem for that exact reason andwas able to put in place something where from the time ofpublication to the time that they changed their strategy andincorporated it within the group, was less than two hours. Theabsorption of it….Joe: That turns into a pretty significant advantage.Terrance: Oh, you have no idea. But that was just the start ofit. So, you think about that and you start thinking "OK, what elsedid they need to do?" So I would be in these meetings and Applying the OODA Loop to Lean Copyright Business901
  18. 18. Business901 Podcast Transcription Implementing Lean Marketing Systemssomeone would suggest "You know, we need this data analyzedso that we can make this decision." Nobody requested a personto do it, but 20 minutes later its in everybodys email inbox. Itwould just appear. This is exactly the same thing as the Magic’sand the Worthys, right?These guys just know. Somebody just knew who the right personwas to do it. They knew exactly who it needed to be provided toand they knew exactly what the content was that needed tohappen. They developed that sense amongst themselves. Onceyou do that, you cannot operate any faster than that.Joe: I think that also comes from is that you follow a particularpattern. Because, again what we go back to, if that 80%, 90%youre doing in a structured way what you normally do, the lanesthat you take down to court, people adjust to that and they knowwhere you are and it looks all instinctively, but its a pattern thatyouve developed over years sometimes. That makes it easy forthe other person to recognize without even looking where youreat.Terrance: Right. This is a great case in point. If you rememberany of Magics early time in the NBA or occasionally in the NBA AllStar game, people who havent played with him before, whenhes got the ball coming up the court, they wouldnt be paying fullattention. I saw him actually hit some other players in the headwith the ball on a no-look pass, because they werent expectingit. Its not that the pass wasnt the right place at the right time tothe right person, but they hadnt developed that communicationto know that Magic was going to do that kind of thing.Joe: His orientation on a basketball court was superior of wherepeople would be at, what positions they would be in. It goes backto that orientation of your surrounding areas of that you’re doingit in business, youre -- Im going to take this from a marketingspin a little bit -- your orientation within a market. If you truly Applying the OODA Loop to Lean Copyright Business901
  19. 19. Business901 Podcast Transcription Implementing Lean Marketing Systemsunderstand where you position yourself in that market, thatmakes life a lot easier, doesnt it?Terrance: Absolutely. If you have a really embedded feel for theplaying field and how people move within it, then you spendalmost no time thinking about the playing field. You start thinkingabout other things, like how are people lined up, where are thebreaks that are occurring, where are the breakdowns of theopponent. You start thinking about more strategically moreimportant things that you can then capitalize on. The examplethat I have from motorcycle racing is that, when youre firststarting to learn how to ride a given track, but how to ride as aracer, you spend almost all of your time trying to figure outbraking points and turning points. Youre spending all this time onthe mechanical stuff.After youve gotten enough of that into yourself, you startspending more of your time on other things that are much moresubtle, but make all the difference in your ability to get ahead ofyour opponent. Same thing is true in just about every aspect oflife.Joe: Where do you think Boyd was trying to take theOODA-loop? Do you think he had more he wanted to do to itwhen he died? Do you think it was open-ended on purpose, thathe just kind of left it there, and went away from it?Terrance: Boyd specifically did not write a book. Theres nodoubt he would be capable of it. As a matter of fact, he wrote abook on air combat maneuvering that has not since beenupdated. That was in the 1950s. He didnt believe that the theoryshould stop in this area, and Im going to say in fast learning,but, youve got to take him beyond the OODA-loop at the pointwhere you start talking about that. Because he wanted to thinkabout, how do you create environments in which people succeed? Applying the OODA Loop to Lean Copyright Business901
  20. 20. Business901 Podcast Transcription Implementing Lean Marketing SystemsOODA is a portion of that, you can interpret a lot, but, really,OODAs just a portion of that.How do you create environments in which our Army, of course hewas working with the US military, will always succeed and cannotfail. Thats a tall order. But it requires an awful lot of study of anawful lot of different things. And the reason, I think that youwould find -- and I dont know this for a fact because, of course, Inever talked to him -- would be that if you looked at things thatpeople have written down, people tend to codify that as theanswer.In the Lean community, you can easily look to a couple ofseminal works and see where people have stopped thinkingbeyond those things. He never wanted that to happen. He didntwant it to just be the OODA-loop, or just be what Boyd thoughthe wanted people to continue progressing this.I think that comes from his studies. He read something like30,000 books, some seriously ridiculous number. I personallyknow a person whos read about 10% of the library that hedonated on passing. It was thousands of books, that. So its apretty impressive piece of work that he did.Joe: He sounds like a guy that could have tested a Kindlescapacity?Terrance: Blown it up. From that, you know, you just cant -- ifyouve seen it before, youve seen people take concepts and lockthem in. If youve seen that, you cant let that happen to yourown work.Joe: You felt that it was a continuous involvement, his learning.When was the OODA-loop actually created?Terrance: Im not sure when he finalized it, or whether it wasever quite finalized, which gets back to your comment before. But Applying the OODA Loop to Lean Copyright Business901
  21. 21. Business901 Podcast Transcription Implementing Lean Marketing SystemsI think he had the nascent ideas of that in the 1950s, when hewas flying. I think it came into real strong existence andunderstanding in his work, when he started building strategy inthe 70s, and when he started really presenting it in the 1980s.So the military reform movement, he was a very big proponentof, and component of. I think it was really starting to gell verytightly by then.Joe: Do you think the OODA-loop is going to stay as popular asit is now in certain circles? Do you think its going to be expandedon? Is someone going to carry the torch?Terrance: I dont know. I think the OODA-loop itself is probablyas baked as it needs to be. What I think is going to happen is thatpeople will expand on the thought processes surrounding theOODA-loop, of which there is quite a bit, by the way. But thethought process is around how you create environments in whichpeople can quickly re-orient themselves. How can they re-frametheir thought processes? How can they see their thoughtprocesses, and find the ones that arent working and throw thoseout and try new ones?Theres an awful lot of study left to go in that. Theres an awfullot of work thats out there already, which is a lot of what Boydread. But theres just such a tremendous body of experimentalwork to do yet, and I think thats where people like me, you, andothers in the Lean community come in. In essence, were doingsome of that work. Its not specifically Boydian, but its certainlythe same ideas. How can you better improve a companys abilityto adapt to a changing environment?Joe: I think those are pretty big questions, probably bigger thanme when you go through that. But it does seem that when youlook at that and we start using words as mental models, - and acompanys mental model of their environment - as things arechanging here, we have to adjust very quickly to our Applying the OODA Loop to Lean Copyright Business901
  22. 22. Business901 Podcast Transcription Implementing Lean Marketing Systemssurroundings to be able to succeed anymore. I think thats reallywhat a lot of this is about.Terrance: Absolutely. It gets nothing but faster. And if anybodyimagines that things are going to be slower or easier becauseChina has suddenly come on board, theyre really in a toughplace. But I dont think anybody believes that. I think we reallyare now learning how to adapt more as industries, lets put it thatway, as companies. But I think thats going to accelerate, and Ithink theres just nothing but tremendous upside to companiesdoing that.Joe: Well you had mentioned to me if I wanted to read moreabout Boyd to read Frans Osingas book "Science, Strategy andWar." I got that book after you said that and I have not finishedit. Ill say this, its not one of those books that I could sit downand read cover to cover in one sitting.Terrance: Ill tell you I didnt find that a particularly easy read.Its clear. Its a clearly written book, but man, it is hard slogging.It gets into the theories that Boyd used to create his thoughtprocesses.Joe: One of the things he mentioned in there is what he calledthe strategic game as one of interaction and isolation. Can youexpand on that just a little bit for me?Terrance: Yeah, all his stuff is so fascinating: Interaction andisolation. If you become isolated, your orientation will lock, or itwill slow down really dramatically. In war, the whole idea behindwinning without firing a shot is to isolate those people from whattheyre external world is telling them. Thats why people makefog in war, thats why they shoot warning shots, and thats whythey do all these kinds of things. Even if you dont do anythingelse, you isolate them so that those people can no longer makesense of the world around them. If you put a person in a Applying the OODA Loop to Lean Copyright Business901
  23. 23. Business901 Podcast Transcription Implementing Lean Marketing Systemsbox, - solitary confinement - people go crazy in solitaryconfinement.Why, because theyve lost touch with the outside world. Theirorientation stops working, and they can no longer grow inthemselves. You can do the same thing to a company. You can dothe same thing to a government. You can do the same thing tojust about anything.So what you really want to do is create the ability in interactyourself with as wide a number of people, with as wide a numberof experiences as you can, and youll never be isolated. Where,your opponent, assuming youre in a competitive situation, willlikely be more isolated, and more so, as they do things that areinconsistent with their surroundings. Why is this useful if youredoing Lean?If youve got a strategy to install Lean in an area where theressignificant resistance, why go after the resistance? Thats attritionwarfare. Thats really going after the stuff that people want youto go after. Go after the stuff thats easy to go after and movethat, and then isolate those areas of resistance.Dont fight them; just isolate them. After a while, when all thisgood comes from Lean, it almost invariably happens that peopleare going faster, and theyre happier. Youve got pole systemsthat are getting things through cheaper and more effectively.What will happen is the naysayers will either collapse becausetheyve lost touch with the rest of the world or, frankly, theyllfind themselves on the out.Joe: The analogy, again, I go to the marketplace of a businessoutside of an organization is as you gather more market sharethats kind of how an idea takes off, how a lets say a YouTubeturns into a movie thing from being a dating service, is that as Applying the OODA Loop to Lean Copyright Business901
  24. 24. Business901 Podcast Transcription Implementing Lean Marketing Systemsthey develop that and they interact and create the interaction ofit, the other ones that were putting movies on the web becameless and less, and they became the dominant player. With thatinteraction and I can relate a little bit to the Internet world of howcompanies grow and how others get isolated and fail. I mean,when Im looking at the different social medias like we talkedabout, a Facebook type thing, when they were growing as acollege network, they werent the only ones doing the same thingat that point in time, but they were able to take their interactionto different colleges and grow it and the other ones just becameisolated and fatally succumbed to what the dominant player was.Terrance: Thats right. This goes back to not just those Internetcompanies, but any company thats really interacting with theoutside world is going to find things that other companies willnot. If youve got your engineering out there and youre notafraid to have those engineers out there -- scientists, what haveyou -- if you feel like your sales people are the only people whocan be trusted to talk to the outside world, you just wont getthat unbelievable set of opportunities that more eyes, differentkinds of eyes can have when they interact with the outside world.Does that make sense?Joe: It does, because one of the things Ive talked about a lotand I havent been able to -- that Im really looking forward totalking to someone on my podcast sometimes, heres a plug toget someone on here, but sales is no longer a single event. Itneeds to be a team and a collaborative event with yourcustomers. And Im not sure, I think companies are doing thatnow whereas in the 60s and the 70s and maybe even the 80s, italways seemed you had that great sales guy out there that wasdriven and was closing sales, your closers and stuff. But I look atsales as a team environment, a team game now, which kind ofgoes back to what were talking about here. Applying the OODA Loop to Lean Copyright Business901
  25. 25. Business901 Podcast Transcription Implementing Lean Marketing SystemsTerrance: Well, I think its even gone beyond that. If you thinkabout the sects of social media, your sales people are people thatarent even associated with product. People are telling otherpeople about your company all the time. Theyre doing it onFacebook, theyre doing it in other social media outlets. If theyresaying great things about your company, other people are goingto be coming to you that you had no idea existed, right?Interestingly enough, I was talking with somebody at the FrontEnd of Innovation Conference not so long ago and they wereworking with Intuit. They had what they called a lab website.Theyve got these Google labs and stuff like that. They had oneas well.They had people who would come up to them and volunteer to dostuff for them that would come up with new product ideas thatwould actually work on them from outside the company.This is where that interaction turns -- and Im not saying this isthe only example, theres probably millions and millions of waysof thinking about this -- but that interaction created for Intuit,and no doubt Google and all these other companies, just suchopportunity that they would never have been able to pursue,identify, think about. They just didnt have the time and wow,what an opportunity there.Joe: Speaking of interaction, theres a Boyd symposium October15th and 16th, I believe.Speaker: Yeah, its down in Quantico at the base there, theMarine base. Theres a guy by the name of Stanton Coerr. Hesrunning it. The cost is pretty small as in zero. If you get in touchwith him, they may still even be looking for speakers. Theyve gottwo days. The last one I went to was three years ago, whichmight have been the first and only, I dont know, but it had reallyinteresting talks. A lot of it was military there, but Im going to betalking, some other people are going to be talking. Applying the OODA Loop to Lean Copyright Business901
  26. 26. Business901 Podcast Transcription Implementing Lean Marketing SystemsIll be talking about R & D and how you think about Boydian stuffand R & D. Somebodys going to be talking about businessstrategies, someones going to be talking about how it works ingeneral business operations. Its really expanding, to your point.The OODA-loop is getting out the way Boyd thought is gettingout.Joe: Youre also presenting at the Management Roundtable, too?Terrance: I do a course, its been about annually, but this is alittle sooner. Ive got a course in Lean and R & D, in which anawful lot of the theories that Boyd presents in his work has beenincorporated. Because Lean and R & D is a fairly new area, andwere cutting our teeth and were trying new things, so wevebrought in from all kinds of things like Boyd biology, et cetera, toreally find out how we can move innovation to the next level. Nottwo times better, but 10 times better, 50 times better. Ill betalking about how you can think through those problems andachieve. So thats with the Management Roundtable, available onthe web.Joe: You can find that at Yes, and thats November 3rd and 4th, in Cambridge,Massachusetts.Joe: Also, youre a soon to be an author, right?Terrance: I hope to be. My publisher is pressuring me, and withgood reason; Ive been late. But so many of these things comeup, and you learn, and then you want to rethink. But should beby the end of this year well have a book out on Lean and R&Dwith Productivity Press.Joe: Well, Ill welcome you back to the podcast when your bookpublishes so we can talk about that a little bit. Applying the OODA Loop to Lean Copyright Business901
  27. 27. Business901 Podcast Transcription Implementing Lean Marketing SystemsTerrance: Fantastic. Thank you.Joe: I think that would be a great subject to have, and I wouldlike to thank you very much for the conversation. This podcastwill be available on the Business901 site and in the Business901site iTunes store. So, thank you very much, Terry.After the podcast, we kept talking and Terry added thisinsight:Terrance: A strategy for implementing Lean. Just think aboutthe purpose of implementing Lean is to improve the company.Well, some people might be damaged by that, but you cantcontrol that. All you can control is how do I get this into thecompany the best way that its possible with the least amount ofdamage and the most amount of happiness.Actually thats the Boydian approach, because his whole point,and I didnt mention this, but his whole point is that those, youremember I was telling you about those 30% of wars that arewon by the smaller, presumably weaker opponent?Theyre much less damaging. Much less fall-out in the end thanthe ones that are just pounded out. So, you look at World War I,you look at World War II, you look at the Civil War in the UnitedStates, and then you look at the damage from the Gulf Wars.Very few killed in the Gulf Wars on either side, very few. Weretalking what, dozens in the case of the Allies?Hundreds and thousands perhaps in the case of the Iraqis, but ifwe went at them as they did in World War I, there would havebeen hundreds of thousands of Iraqis killed. Which would youprefer, right? I mean, this is a very positive thing.In any case, I just think its one of those unexplored areas. And Ithink really, really valuable with internal thoughts within acompany, they think we spend an awful lot of time slugging it Applying the OODA Loop to Lean Copyright Business901
  28. 28. Business901 Podcast Transcription Implementing Lean Marketing Systemsout. Youve heard these same things. Youve got to get the CEOto do your change implementation. The CEO has to do it. Thenits a "pound it out" against the companys culture. Well, what ifwe went with the companys culture? Found the areas where wecould infiltrate and do this, and let the people who arentinterested collapse on their own.Why did you assume that top management was the only way todo this? Why didnt you try another way? I mean, thats reallyhow fast is your OODA-loop? Look, I started here, so Im amanagement consultant. Well I was originally brought in as amanagement consultant within Pfizer, so Ive been at McKinseyawhile, but I started with the Strategic Management Group as astrategy person. We went in with an all-day meeting with myclient leadership team and they damn near threw us outphysically. They were just not ready. It took me four years to getback in to have that same kind of discussion with them - fouryears!I stopped doing that same approach. I started working withpeople who were interested. People who were under pressure,People who, by god, didnt know how they were going to deliver.We worked with them to solve their problems and you know whathappened then. You talk about your social network; those guysgo and tell other people, those guys tell other people, and prettysoon your phones are ringing off the hook.Well, I didnt do this on purpose. This is not the way I envisionedit, but, boy, its certainly better than I would have, its far betterthan had they actually thought it was a good idea andacquiesced. Because I would never have learned this and I wouldnever have gotten nearly this far in this company. I mean,personally, in terms of Lean. Never would have gotten anywherenear the impact weve had. Its amazing! Applying the OODA Loop to Lean Copyright Business901
  29. 29. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: It is amazing. The typical excuse is always the buy-in ofmanagement.Terrance: Right. Which begs the question? I think this is a veryinteresting point and I think this would be something Boyd wouldtalk about as well. Ideas come from all over in an organization, ina community. The CEO cannot hold all of those ideas in theirmind any more than we have the correct orientation. There is nocorrect orientation. Its just ours and some parts that are morewrong than others, but we need to find those as fast as we can.Now, if you think that somehow the CEO is going to find Lean thebest thing in the universe and then take that up as their cause,why would we imagine that. Theyve got other stuff on their platetoo, right?So if you think back about Boyd, Boyd started in the Air Force.The Air Force to this day hates him. Boyd, however, found otherpeople along the way, and the military training doctrine of theMarine Corp is actually built on Boydian thought because heinfluenced those folks, and those folks were able to start talkingto the right people and they did get the senior leadershipon-board, the commandant of the Marine Corp.Then it spreads out from there, then it spreads out from there,and now you and I are talking about it. The thing thats reallyfascinating about that is, thats not going at the top guy first,thats going at wherever you can go.The thing that Boyd did, I know he read the Dao and read Daoiststuff. But what they talk about in the Dao is really, the only thingyou can change is yourself, and the only thing you can reallychange is your ideas. If you want to change the world, youchange it by doing one step.Anywhere that you change, will change the rest of the world alittle bit. All you have to do is change it a little bit here, change it Applying the OODA Loop to Lean Copyright Business901
  30. 30. Business901 Podcast Transcription Implementing Lean Marketing Systemsa little bit there and then suddenly youll find something thatchanges it non-linearly and you cannot predict what that mightbe.So, lets go back to Toyota. If you think about how Toyota startedwith Lean, youve got this guy, Ono, in this machine shop andhes doing these crazy other ways of doing business. Everyoneelse is thinking Ford, Ford and Ford. Suddenly Toyota gets in thisreally bad jam. They have to layoff: 15%, 20% of theiremployees. They have to bow before the banks and theGovernment just to stay alive.Suddenly Onos work prior just was crazy stuff, now is the waythe company will be saved. Then suddenly you go from this smallidea to something that is absorbed instantly through the rest ofthe company, the rest of the company just starts absorbing theseideas ding, ding, ding, because it suddenly is part of theirsuccess.If you can find the cultural levers that are aligned with Lean thatabsorb ideas into your company, you wont need to go forceanything. Itll pull it in whether you want it too or not. You wonteven be able to stop it.Thats the kind of thing that weve been thinking about. How canwe do this with people? How can we do this with divisions? Howcan we do this with entire companies? Its fascinating because Ithink there are ways consistent with what Boyd taught. Its notthe same but, I think there are ways that companies canboot-strap the stuff. I dont mean to say its a grass-roots orbottom-up, its a whatever it is that gets into their culturalsystem. Itll absorb it very quickly and spread. How can we dothat with Lean? Applying the OODA Loop to Lean Copyright Business901
  31. 31. Business901 Podcast Transcription Implementing Lean Marketing Systems Joseph T. Dager Lean Six Sigma Black Belt Ph: 260-438-0411 Fax: 260-818-2022 Email: Web/Blog: Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joes ability to combine his expertise with "out of the box" thinking is unsurpassed. He has alwaysdelivered quickly, cost effectively and with ingenuity. A brilliant mind that isalways a pleasure to work with." James R.Joe Dager is President of Business901, a progressive company providingdirection in areas such as Lean Marketing, Product Marketing, ProductLaunches and Re-Launches. As a Lean Six Sigma Black Belt,Business901 provides and implements marketing, project and performanceplanning methodologies in small businesses. The simplicity of a singleflexible model will create clarity for your staff and as a result betterexecution. My goal is to allow you spend your time on the need versus theplan.An example of how we may work: Business901 could start with aconsulting style utilizing an individual from your organization or a virtualassistance that is well versed in our principles. We have capabilities toplug virtually any marketing function into your process immediately. Asproficiencies develop, Business901 moves into a coach’s role supporting theprocess as needed. The goal of implementing a system is that the processeswill become a habit and not an event. Business901 Podcast Opportunity Expert Status Applying the OODA Loop to Lean Copyright Business901