Impairment in Sporting Franchises and Player Contracts
In the previous two articles, we have already established that the sporting industry has this unique practice of recognizing human players as intangible assets on their balance sheet. We also know that the value of these intangible assets is also routinely amortized just like other intangible assets. In short, the player contracts are treated exactly […]
Objectives of Accounting
Every activity that a business firm does must be done for a reason and accounting is no exception. Accounting helps the company achieve a myriad of objectives. Here is the list of objectives that accounting helps the company to obtain. Permanent Record Any business firm needs a permanent record of the transactions that it indulges […]
3 Phases of Employee Engagement
Employee engagement is a concept that has begun to grab the attention of the corporate world for past few years. When put simply higher levels of employee engagement mean higher profitability of the organisation. Employee engagement is critical. Highly productive organisations have understood this fact a long ago where mediocre and low performing organisations have […]
Financing Needs of Infrastructure Projects at Different Stages
Infrastructure projects typically last for many years. It is not uncommon for these projects to last for decades. These long term projects have different phases. Each of these phases has unique needs from a finance point of view, as well. In this article, we will explain how the financing needs of an infrastructure project depending […]
How Drones Will Impact the Insurance Industry?
The military application of drones is well known across the entire world. However, of late, civilian and commercial applications of drones have also started growing by leaps and bounds. For instance, Jeff Bezos, the founder of Amazon has been very vocal about his desire to use drones for order fulfillment. Similarly, there are many other […]
We had discussed how the OODA Loop or the Observe, Orient, Decision, Action loop works in helping to make better decisions. The first and the important thing to remember about the OODA loop is that it is mainly concerned about situations that involve split second decision making.
Considering the fact that it was developed by an Air Force pilot, it is natural that the OODA loop describes decision making in situations that are combat oriented in nature. However, this does not preclude its use in corporate decision making as there are many situations in which the decision makers have to take split second decisions with little or skewed information.
For instance, during board meetings and meetings of shareholders, important decisions and announcements have to be made depending on the exigencies of the situation.
To take an example, during hostile board meetings or meetings of senior management where the decision makers have to confront other managers with competing agendas, they have to react quickly and agilely to ensure that the decision that they take is in the best interests of the organization and its shareholders.
So, the point that needs to be noted is that decision makers in these situations have to assess the opponent’s strategies and strengths and weaknesses and react in a timely and quick manner.
The time between receiving the information and taking a decision is often in the seconds and minutes and hence decision makers have to react quickly to the demands of the situation. Often, this means that decisions have to be made by getting inside the minds of the opponents.
For instance, getting to know what the opponents’ strategies are and their intentions by assessing their body language and their words would be invaluable to the decision makers.
Further, the noteworthy aspect is that the decision makers have to rely on gut feelings and emotional intelligence to arrive at the decision. This means that the decision makers have to trust themselves and their judgment to take the decision that would be in the interests of the organization and its shareholders. This often involves acting with imprecise or skewed information. The reason for this is that the opponents’ themselves would be actualizing their OODA Loops and hence it becomes a combat situation where the one with the better decision making abilities wins. This is the reason for the popularity of the OODA loop in contemporary organizations where training and mentoring often involves familiarizing with the OODA loop.
Finally, it is not always the case that decisions taken by the decision makers are perfect and free from errors. Hence, there has to be a mechanism where feedback loops have to be activated which ensures that decisions are vetted and evaluated for the impact that they have on the organization.
So, to sum up the benefits of the OODA loop, it is indeed the case that this method developed by John Boyd is extremely useful for decision making in any setting where the reaction times are less and where the fitness and the agility of the decision maker plays a crucial part in making the decision.
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