Sun Tzu meets Boyd's OODA Loop

This is the fourth of a series of 12 articles by our guest blogger on systems thinking, a way of understanding complex organizations and society offering significant promise for improving the leadership and management of commercial companies, not-for-profit organizations, and government agencies.

PART-4

Operationalizing Sun Tzu: The O-O-D-A Loop By H. William Dettmer

"Those who win every battle are not really skillful-those who render others' armies helpless without fighting are the best of all." -Sun Tzu, The Art of War [1:67]

By now most people have heard of the ancient Chinese general, Sun Tzu, and his writings about military strategy called The Art of War. Sun Tzu lived about 2,400 years ago. What many may not realize, however, is that The Art of War is a compendium of cogent military thought that has been amplified and expanded upon through the 12th century AD by other skillful Chinese generals---“the best of Chinese military genius”, one might say.

Somewhat fewer people (but still a significant number) are aware that principles articulated in The Art of War can be translated to the domain of business. Some business schools even require students to read The Art of War as part of their curriculum. However, though they may have done such required reading, very few business students of Sun Tzu are really adept at translating those precepts to practice. Some authors (McNeilly, for one) have done so and written about it. [2]

Clearly, there are parallels between military engagements and business, or, for that matter, with competitive sports, or other comparable activities where winning or losing (however one defines those) is possible. The principles in The Art of War can be effectively applied to such situations, whether the opponent is a specific adversary or even just an unforgiving environment itself.

The Art of War is replete with useful information, both strategic and tactical---too much to analyze at length here. That's not the purpose of this installment in any event. For our purpose---showing how to make that application leap that so many haven't been able to do---it's sufficient to select a few of Sun Tzu's key principles.

Here are the ones we'll address:

1. If you know others and know yourself, you will not be imperiled in a hundred battles…if you do not know others and do not know yourself, you will be imperiled in every single battle. [1:82] This principle addresses the importance of understanding your own system-its capabilities, needs, objectives, and values-as well as those of your opponents.
2. Unless you know the mountains and forests, the defiles and impasses, and the lay of the marshes and swamps, you cannot maneuver with an armed force. [1:116] This principle emphasizes the need to fully understand the external environment in which you---and your adversaries---operate in. In business, this is more than just the market conditions or the regulatory environment. It includes the political and cultural environment as well.
3. I have heard of military operations that were clumsy but swift, but I have never seen one that was skillful and lasted a long time. It is never beneficial to have [an] operation continue for a long time. [1:58] In this observation, Sun Tzu points out the importance of speed in commencing and concluding operations and activities---of not allowing things to drag on.
4. Act after having made assessments. The one who first knows the measures of far and near wins. [1:119] The emphasis here is on making assessments. This is another way of saying “synthesize all your information into a clear picture of what is going on and where you stand in the situation; then act.” (presumably with the speed advised in 3, above!)
5. Generals who know all possible adaptations to take advantage of the ground know how to use military forces. If generals do not know how to adapt advantageously, even if they know the lay of the land they cannot take advantage of it. [1:126]
6. Adaptation means not clinging to fixed methods, but changing appropriately according to events, acting as is suitable. [Zhang Yu] [1:125]
7. A military force has no constant formation, water has no constant shape: the ability to gain victory by changing and adapting according to the opponent is called genius. [1:113] These three precepts are all about flexibility and the capability to adjust (or adapt) to new situations---again, quickly.
8. In battle, confrontation is done directly, victory is gained by surprise. [1:94] Here Sun Tzu makes the point that the most visible or obvious engagement is not where war is actually won. In other words, the direct engagement is no more than a way of fixing the adversary's attention while the decisive engagement is concluded at a point where the enemy is weak-and not as well prepared. In other words, “Hit `em where they ain't.”

The O-O-D-A Loop

John Boyd, a retired Air Force colonel whose concept of destruction and creation we examined in the last installment, conceived a four-step prescription to guide the prosecution of military operations to swift, ultimate victory. Boyd called this prescription the O-O-D-A loop. And in the same way that Sun Tzu's principles are applicable to business operations, so too is Boyd's O-O-D-A loop. Moreover, the O-O-D-A loop provides highly focused guidance for effectively applying the specific Art of War principles cited above. It can be considered a command-and-control loop. [3:165]

“O-O-D-A” is an acronym that stands for observe, orient, decide, and act. These are sequential activities that guide leaders to effective decisions. The act step that culminates this process ultimately produces changes in the environment that merit a new, subsequent round of observations, followed by a second cycle of orientation, decision, and action. Boyd suggested that individuals or groups that could cycle through these four steps faster than their adversaries had a tactical advantage. To the extent that they could execute the cycle two or more times faster than their opponents could complete one, they would actually increase the opposition's confusion about the competitive situation to such a degree that the opponent's efforts might totally collapse. The accompanying figure provides a detailed picture of the O-O-D-A loop.

It's worth examining these steps in somewhat more detail.

Observe

Observation, the first step in the O-O-D-A loop, is a search for information. The information that should be sought is, first and foremost, the nature of unfolding circumstances-the tactical situation. Only slightly less urgent is what Boyd called “outside information.” This could include the environment; the behavior and tendencies of oneself and one's opponents; the physical, mental, and moral situation; and potential allies and other opponents. [4:62] It must be emphasized that this is not a passive step-it requires a concerted, active effort to seek out all the information possible, by whatever means available.

Moreover, bad news is the only kind that will do you any good. [4:63] What you're looking for---what you can best capitalize on---are data that don't fit with your current orientation, or worldview (and especially the worldview of your opponent). It is these “mismatches” that offer the potential for learning something that your adversaries don't know, thereby creating a tactical advantage that you can exploit.

Orient

Orient is the “big O” in the O-O-D-A loop, as you can see from the complexity of that part of the illustration above. Notice that there are three arrows leading out of the orient block, but only one leading in, reinforcing the notion that our orientation to the world shapes the decisions we make, the actions we take, and what we choose to observe-what we look for-in the world around us.

Our orientation is a synthesis of multiple contributions, including cultural traditions, previous experiences, genetic heritage, and new information based on unfolding circumstances. These contributions are then analyzed and synthesized (remember the snowmobile analogy from the last installment?) into a new, updated picture of reality---a worldview. To the extent that a tactician or strategist is able to synthesize a more accurate picture of reality than his or her opponent, the quality of decisions and the effectiveness of actions improve, sometimes dramatically. To the extent that the tactician/strategist can deny that accurate picture to the adversary, the quality of the opponent's decisions and the effectiveness of his actions deteriorate. Boyd referred to this analysis-and-synthesis process as “many-sided, implicit cross-referencing.” [4:62]

It's orientation, however, that drives everything else. The faster we can orient ourselves, the greater the congruence with objective reality that we can make our orientation, the better and more effective our observations, decisions, and actions will be.

Decide

In concept, this is an explicit step, meaning a discrete, conscious activity following hard on orientation. However, Boyd also realized that intuitive understanding of the situation and one's own capabilities (the fingerspitzengefuhl discussed in our first installment) makes the decision step implicit, rather than explicit. This is a highly desirable situation, because it speeds the cycle time of the O-O-D-A loop. As early as the 17th century, the quintessential samurai, Musashi, emphasized the need to practice incessantly until this fingerspitzengefuhl (not Musashi's word, obviously!) made the sword an extension of the warrior's arm and action instinctive, without having to think about it. In other words, implicit decision and action.

Act

The act step is largely self-evident. Action is the whole reason for going through the O-O-D steps in the first place. But it's crucial to keep in mind that the very action we attempt to execute will, itself, influence the environment in which we act. The environment will change, possibly only slightly, but more likely dramatically. This change in the “playing field” renders our orientation, or worldview, invalid to some degree: it introduces a mismatch between reality and our perception of it. The quicker we realize that this mismatch is developing, the sooner we can adjust our orientation to more closely approximate the new reality and act again. And this is the cyclic nature of the O-O-D-A loop.

Speed

A final word about speed. The more factors there are to consider, the more difficult it is to analyze and synthesize them all quickly. Knowing what to focus on and what can be ignored is crucial. Speed comes from the implicit ability to do this, rather than from the explicit step. With experience and skill, an explicit decide step can be bypassed, and action becomes an implicit outcome of orientation, as Musashi intended. Moreover, the decision on what indicators to look for, or observe, in the external environment also becomes implicit (thus faster).

Conclusion

In the next installment, we'll see how the observe and orient steps constitute the heart of what Peter Senge has called learning organizations. And the following installment will introduce the concept of system constraints as a means of separating what's important to synthesize from what isn't in the mass of data that observation produces.

"The one who figures on victory at headquarters even before doing battle is the one who has the most strategic factors on his side…The one with many strategic factors in his favor wins, the one with few strategic factors in his favor loses-how much more so for one with no strategic factors in his favor. Observing the matter in this way, I can see who will win and who will lose." -Sun Tzu, The Art of War [1:56]

ENDNOTES 1. Sun Tzu. The Art of War (translated by Thomas Cleary). Boston, MA: Shambhala Publications, 1988. 2. McNeilly, Mark. Sun Tzu and the Art of Business: Six Strategic Principles for Managers. NY; Oxford University Press, 1996. 3. Hammond, Grant T. The Mind of War: John Boyd and American Security. Washington, D.C.: The Smithsonian Institution Press, 2001. 4. Richards, Chet. Certain to Win. Xlibris Corporation. 2004.

(c)Copyright 2005,2006, H. William Dettmer. All rights reserved. Permission granted to Jeff 'SKI' Kinsey to reprint on SKI's Throughput on Command.

Financial Flush Method (FFM) - Part 2

Part 2 Financial Analysis Concept known as Flush by Jeff 'SKI' Kinsey, Jonah People are only human. That is the good news, as well as the bad news. In part one, we talked of problem solving. And of using Dr. Eli Goldratt's three step approach:

1. What to change?
2. What to change it to?
3. How to cause the change?

But humans resist change, or so it seems. If that is true, why do we buy lottery tickets? We must be seeking a change on some level. Goldratt has used the lottery example on at least one occasion to prove that behavior can and will change on a dime. No one excited about your suggested changes? Consider the source: you! Have you failed to excite them? Failed to understand the true nature of the environment? Failed to take the time required to do a proper analysis? The great news about failure: it does not have to be permanent. This series of articles seeks to explore a method for changing how you determine what projects get selected, and in what order they are implemented. Pretty important stuff. It you want it to be. As Les Brown (and others have) said: "you are going to be just as happy as you make up your mind to be!" It must start with you. If you are happy with your business and its approach to managing projects, then stop reading. Now. Period. Go back to the sports page. Or whatever. Still reading? Great. Here is the heart of the matter: FFM (Financial Flush Method) works. Better than all other evaluation tools when cash (in the form of working capital for projects) is your constraint. Let us define constraint: a bottleneck that prevents or restricts throughput. Let us define Throughput (from Purple Curve Effect): Systems define objectives in terms of goals. For example, for-profit businesses may set a goal based upon cashflow or gross profit. Throughput is the rate at which a system produces "goal units," i.e. dollars of profit. Selecting the proper projects in the proper order will have huge ramifications on your company or organization's throughput. Enough said? Part three next Monday. -ski (c)Copyright 2006, Jeff 'SKI' Kinsey, Jonah All rights reserved.

Destruction and Creation

This is the third of a series of 12 articles by our guest blogger on systems thinking, a way of understanding complex organizations and society offering significant promise for improving the leadership and management of commercial companies, not-for-profit organizations, and government agencies.

PART-3

Destruction and Creation: Analysis and Synthesis By H. William Dettmer "Let us not lose sight of the fact that the etymological root of the word analysis is 'anal.'" --Unknown The word “analysis” has been overused, to the point becoming a cliché. We have environmental analysis, business analysis, financial analysis, cost-benefit analysis, metallurgical analysis, spectrographic analysis, and systems analysis (which has come to refer too narrowly to information systems). Even these are only a partial list. We're virtually awash in analyses. The concept of analysis is deeply embedded in our lives, but where did this concept come from? And why should you care about it? Since the Renaissance, analysis has been the foundation of problem solving. But as we move from the 20th into the 21st century, it's becoming clearer that analysis alone is an incomplete, suboptimal way of understanding and functioning in our world. Worse, without the next step---synthesis---practicing analysis alone is a dangerous way of operating. Analysis Equals Reductionism What, exactly, is analysis? Simply put, it's a process of reducing a complex whole, or system, into its component parts---manageable “bites”, if you will---and dealing with those parts in isolation. Take an automobile, for example. The engine is a complex system made up of many components. If the engine runs roughly, the analysis approach is to mentally “deconstruct” the engine into carburetion (or fuel injection), fuel supply, fuel transport system, and combustion chamber (cylinders). The person repairing the engine “analyzes” the situation: he or she examines and “tweaks” each of these parts individually. Fuel injectors are checked, and perhaps cleaned. The fuel pump is checked for proper operation and the filter replaced. Spark plugs are cleaned or replaced, and timing may be adjusted. Then the components are rejoined again. Often the car is returned to the owner with all these things done (accompanied by a substantial bill!), and the owner finds that the engine doesn't run substantially more smoothly. The reason may be that the repair person failed to “synthesize” the system again---to ensure that all the adjusted components actually function well together. The assumption underlying the concept of analysis is reductionism, the idea that all the reality of our ultimate experience can be reduced to indivisible parts. [1:9] From the 15th through the 19th centuries, a reductionist philosophy predominated all scientific inquiry and the expansion of human knowledge. It was assumed that if a phenomenon was deconstructed sufficiently and the parts examined, understanding of the phenomenon was assured. In fact, this thinking is embodied in one of the basic axioms of analytic geometry: the whole is equal to the sum of its parts. But a funny thing happens with complex systems: interdependence among the parts rears its ugly head---what some have called synergy comes into play! The reductionist, or analytic approach reached its culmination with the concept of scientific management in the early 20th century. The father of scientific management, Frederick W. Taylor broke down (analyzed) complex industrial activities into component tasks, sought to make those tasks more efficient, and “glued” the more efficient components back together again. The expected result was a more efficient, effective system. Taylor's disciples, including Frank and Lillian Gilbreth and Henry Gantt, extended and refined Taylor's analytic approach to management well into the 1950s essentially unchanged. Deficiencies in Analysis Because early organizational (specifically, industrial) systems were simple, the analytic approach was much more effective than the alternative---which was more or less ad hoc. But as the complexity of organizational systems increased to the point where no one person could have complete visibility on all components simultaneously, the “cracks in the plaster” of the analytic approach began to show. Analysis could no longer explain the difference between the whole-equals-the-sum-of-the-parts and observed results that were disproportionately higher (or lower) than expected. In other words, the success of an analytical approach “topped out.” The problem is that parts of systems have properties that they lose when separated from the whole system, and the whole system has essential properties that none of its parts does. Ackoff provided an effective analogy: The eye detached from the body can't see, yet the human body as a whole can run, play piano, read, write, and do many other things that none of its parts can do by themselves. [1:16] What does all this mean? Basically, that the essential properties (and thus the ultimate performance) of a system derives from the interactions of its parts. And these essential properties are lost when the system is taken apart. In other words, a system is a whole that cannot be understood by analysis alone. Synthesis: The Second Half of the Equation What, then, is the key to resolving this deficiency? The answer is synthesis. Simply put, synthesis is amounts to putting things together. Sometimes these are pieces known to be part of a system, for example, the rebuilding of an automobile engine from its disassembled parts. In other cases, it may be the combination of things never thought of as “going together” before, to create new concepts, solutions, or realities. Synthesis is not a new idea; it's as old as analysis. As Ackoff has pointed out, Aristotle dealt with both. [1:17] But in our current world of complex systems, synthesis becomes more important than most people realize. Analysis and synthesis are complimentary processes; though they can be considered separately, they can't really be separated. Systems thinking doesn't deny the value of analysis, however. Rather, it emphasizes the fact that there is another side to the system equation that has, until recently, been ignored or overlooked. In 1976, John R. Boyd, a retired U.S. Air Force colonel whose chief claims to fame had been his development of the energy-maneuverability theory and the latest-generation fighters (the F-15 and F-16), tackled the issue of analysis versus synthesis in a paper entitled Destruction and Creation. [3] The core of Boyd's argument was that creativity was essentially the outcome of a process of analysis and synthesis, which he referred to as destruction and creation. Boyd suggested that new ideas and breakthrough solutions to particularly challenging problems resulted from mentally deconstructing multiple known existing concepts or processes, then selectively reassembling key elements to form a completely new concept---thus, the characterization as “destruction and creation.” Creativity and Synthesis: Building Snowmobiles In the mid-1980s, Boyd offered an analogy to illustrate this process of analysis (destruction) and synthesis (creation). [4] He challenged people to think of four seemingly unrelated mechanical systems: a set of snow skis, a boat with an outboard motor, a bicycle, and a military tank or tread-type earthmover. Each of these is a discrete device with its own purpose. Boyd suggested mentally deconstructing these into their component parts and selectively re-combining parts from each to for a new “whole” that would not otherwise exist. He discarded the bindings and poles from the snow-skis, retaining only the “boards.” From the outboard boat, he retained only the gasoline-powered motor; from the bicycle, the handlebars, and from the earthmover, a tread. He recombined these concepts (the functions of the different parts) to form…a snowmobile! The snowmobile concept became Boyd's short-hand analogy for characterizing the domain of competition. He separated people into two types: those who could conceive and build snowmobiles, and those who couldn't: [5:156] “A loser is someone (individual or group) who cannot build snowmobiles when facing uncertainty and unpredictable change; whereas a winner is someone who can build snowmobiles and employ them in appropriate fashion, when facing uncertainty and unpredictable change.” [5:182] Hand in hand with being able to build snowmobiles, Boyd suggested, is adaptability---the capability to respond to a situation with variety and rapidity. Variety is an outgrowth of analysis and synthesis. Rapidity implies the ability to analyze and synthesize quickly. Paradigms Let's briefly consider a concept seemingly unrelated to Boyd's destruction-and-creation process: the idea of paradigms. The term was coined by Thomas Kuhn in 1962, in his seminal book, The Structure of Scientific Revolutions. [6:x] Kuhn's original treatise dealt with the evolution of scientific theories, particularly the physical sciences. Through the later work of others, primarily Joel Barker [2], it has since come to be applied more widely (and broadly) to the realms of business management, societal development, and social interaction. Grossly oversimplified, a paradigm is a model, a set or rules, or a pattern of behavior that defines current, accepted (and acceptable) thinking about a domain or subject. For example, the game of baseball is a paradigm operating within the confines of a stadium and the organizational structures behind the competing teams. Behavior of those within this paradigm is largely prescribed within relatively well defined boundaries. Concepts associated with other paradigms (e.g., football, tennis, or aviation) are excluded from baseball “thinking.” Likewise, at the higher economic and political levels, capitalism and democracy are also paradigms. Thinking within these paradigms is somewhat constrained by the “traditional,” the accepted, or common practice. Kuhn introduced the notion that paradigms change over time, as more and newer information is discovered. In most cases, this change is evolutionary, rather than revolutionary. As Barker has pointed out, however, paradigm “shifts” can often be dramatic. The Internet and its many and varied uses is an example of such a rapid paradigm shift. A key characteristic of paradigms and their associated shifts is the idea that they naturally evolve or “happen”---they're not consciously directed. Summary: Our OWN Synthesis To summarize what we've seen so far, let's do a little “destruction-and-creation” of our own. Ackoff, Churchman, and other system thinkers maintain that the widespread current practice of analyzing systems and issues alone---that is, breaking them down into their component parts and maximizing performance of the discrete parts---is a flawed practice, because it ignores the central role of interdependencies. Kuhn and Barker suggest that the rules of the “meta-game” change over time, sometimes with dramatic shifts that must be discerned and accommodated. Failure to do so can leave one “behind the power curve.” That's an aviation term implying that the pilot has allowed the aircraft enter a condition where much more power is required just to maintain or arrest a deteriorating flight condition. Or, in management terms, “Have you seen them? Which way did they go? I must be after them, for I am their leader!” And finally, Boyd maintains that the kind of destruction-and-creation process (analysis and synthesis, in Ackoff's terms) he recommends produces the ability to dictate rules and results of an engagement. The people and organizations that become really good at doing this can achieve a much greater degree of influence over their environment. (Boyd referred to this as “improving their capacity for independent action.”) [3] So, what does our “snowmobile” look like? If paradigms govern conventional thinking about how things happen, or must be done, and if our organizations are arrangements of systems, sub-systems, and meta-systems that can't be effectively managed analytically, then the application of a conscious, pro-active method of destruction-and-creation (analysis and synthesis),systemically applied, can put practitioners of such methods at a tactical advantage over competitors. It can also keep them ahead of the environmental changes that evolve over time---and perhaps be in a position to drive or lead revolutionary paradigm shifts. Which position would you rather be in: chasing after a changing environment, or leading the change? In our next installment, we'll examine the O-O-D-A loop, a prescriptive approach to applying analysis and synthesis to secure the “high ground”---Boyd's improved capacity for independent action---in our chosen fields. ENDNOTES 1. Ackoff, Russell L. Ackoff's Best: His Classic Writings on Management. New York: John Wiley & Sons, 1999. 2. Barker, Joel. (http://www.joelbarker.com) 3. Boyd, John R. Destruction and Creation. An unpublished paper. (http://www.goalsys.com/id17.htm) 4. Boyd, John R. “Revelation,” part of the August 1987 version of the larger unpublished briefing, A Discourse on Winning and Losing. Cited in Hammond, Grant T., The Mind of War: John Boyd and American Security, Washington, D.C.: The Smithsonian Institution Press, 2001, p.182. 5. Hammond, Grant T. The Mind of War: John Boyd and American Security. Washington, D.C.:The Smithsonian Institution Press, 2001. 6. Kuhn, Thomas S. The Structure of Scientific Revolutions. Chicago: The University of Chicago Press, 1962. ---- (c)Copyright 2005,2006, H. William Dettmer. All rights reserved. Permission granted to Jeff 'SKI' Kinsey to reprint on SKI's Throughput on Command.