One of the most enjoyable facets of the annual Beyond Budgeting Round Table (North America) conference, which took place in San Francisco last month, is the side discussions that take place among members, presenters, and other attendees.

John Boyd’s name inevitably crops up in some of these chats.

Boyd was a colonel in the U.S. Air Force and a highly influential military strategist whose insights also apply to business strategy. He devised the “OODA Loop,” first as an approach to air-to-air combat and then later as a much broader military strategy.

The acronym stands for “Observe, Orient, Decide, and Act,” and it helps illustrate one of the keys to the success of the Beyond Budgeting model.

Boyd coined the term when he discovered how U.S. pilots in slower planes with less powerful weapons won decisive victories against a better-equipped enemy during the Korean War. It turned out that the U.S. pilots outperformed their opponents in the areas of observation, orientation, decision-making, and action. In other words, they were quicker to assess the conditions and respond accordingly. Put another way, they adapted and innovated better, which is something all companies need to do today. And many are seeking to “out-OODA” their competitors by introducing Beyond Budgeting principles.

If you’re curious about OODA Loops, several books have been published on Boyd and his model, including this one.

Take a look at your management decision-making process. How fast does it allow you to take advantage of opportunities or respond to key risks? One reason organizations need to move beyond budgets is their slow response to new risks and opportunities. Does your organization remain stuck in an annual response mode? How will it survive in today’s world, which requires lightning-quick responses? ###