Wednesday, 9 January 2008

Interesting view on OODA

For starters I must apologise for lack of posting. It is shameful that blog which writes about momentum and tempo comes to grinding halt. Anyway, I hope that we both have more time to post in future. And that we get that book club started that we talked about in december.

Now to the meat of this post:

Incentive Intelligence has interesting view on OODA. Given that blog focuses on incentives in Business it doesn't come as a surprise that they relate working incentive program as a way to accelerate organizations OODA loop.

Any company that has a platform for rewarding and recognizing those that contribute to its success - whether that's employees, customers or channel partners - will have the ability to react and influence behavior more quickly - shortening the O.O.D.A. loop.


I see incentives as another the enablers to make fast transients possible. As with lean, using the technique itself doesn't guarantee success but it makes it possible and is one component more adding speed to flywheel.

5 comments:

Jeff said...

I'm afraid this one really doesn't pass the sniff test for me. First, the articles conception and depiction of the OODA loop is one that Boyd (and Chet Richards) specifically repudiated. If you go to Belisarius.com and check out the "Boyd for Business" PPT you will see that the key to improving a companies OODA Loop is in creating a common - and accurate - Orientation for the company so as to enable IMPLICIT GUIDANCE and CONTROL.

This is only an educated guess on my part, but I would say that the culture of innate competence, mutual trust, and decentralized control is the opposite of one were Incentives are needed to get people to act. But I'd welcome any further explanation or contrary argument.

Jeff said...

I meant to write "Certain to Win" PowerPoint on belisarius.com

Sorry for the mislabeling.

Panu Kinnari said...

I see your point. And it is true that image at the site is the wrong understanding of the concept.

But, I understand incentives as more than just monetary compensation. And I don't believe much in monetary bonuses as incentive. Over time they lose their effectiveness and whatever management does some employees will see it either too little or too hard to achieve.

Complementing good work done and promoting those who do right thing are incentives as well. And they are something that are needed to have implicit guidance and control.

Thoughts?

Jeff said...

Broadly defined, incentive can be seen as a tool for moving a company towards maneuver warfare principles. But I think at a certain point, you've moved beyond what 95% of the population pictures when you use that word.

I would say that the goal is to properly aligned local and individual actions with Strategic and Operational goals. Yes, properly structuring compensation or incentive packages can help with those goals. But I'd say that at the level described in the article, incentives are probably not the best way to drive tactical actions.

The most effective use of incentives I can think of is to motivate people to look for contra-indications and to test out assumptions. Nobody wants to really look for bad news, or for signs that a company's orientation is lacking. And since detecting these mismatches is so incredibly vital, incentives are worth looking into. Yet I'd say again that this is a way to align individual actions with strategy, not to drive tactics.

Additionally, I will give the author of that blog this, I read through more of his posts and he seemed far more level headed and knowledgeable than this one post would have lead me to believe.

2of6 said...

First of all I don't even begin to pretend I understand the concept of OODA to the degree that you all do.

I was simply using an interesting idea as a way to gain attention with "management" types.

Referencing OODA loops puts an interesting spin on the conversation.

My perspective and point of the post was to point out that if a company invests in a non-cash incentive platform they can influence behavior quicker when changes occur in their competitive environment. If someone observes a change and needs to focus attention (act) then having the platform in place will give them a time advantage on some other company that needs to create the entire process from scratch.

As Jeff mentions in his comment, the incentive can be used to drive people to look for contra-indicators but they can also be used to be sure the actual action (tactic) is in line with the strategy.

I'm thinking purely of the individuals behavior - many times when strategy changes - the behavior doesn't. Sales people sell the same way, operations folks operate the same way. Providing incentives for these tactical efforts reinforces that the strategy changes.

Like I said... no expert on OODA - just thought it was an interesting way to communicate that reaction time in business is critical in today's environment having a platform to influence behavior can help.