Things never go as smoothly as you want them to. In business, there are always unexpected shocks and changes. Flexibility is crucial in keeping your company afloat.
To tackle uncertainty, incorporate the OODA loop into your processes. OODA stands for observe, orient, decide and act. And it’s a loop, because even though there are four separate actions, the sequence itself is continuous. Once you finish the final step, you start all over again.
Here’s how the OODA loop breaks down.
- First, you observe. Look at what’s happening around you. How are customers using your product?
- Second, you orient. Analyze the information you’ve gathered and formulate ideas about how to improve.
- Third,you decide. Form a hypothesis about how to improve your product or service.
- Fourth, you act. Move quickly to implement your hypothesis.
This brings you back to the first step: you return to observing, this time around to see how customers are using your new, improved product.
Online video streaming company YouTube used this process early on. Did you know that at first, the company was actually a dating site that allowed users to rate each other’s photos and videos?
But when company leaders observed user behavior, they noticed that people were far more interested in uploading any video, not just dating-related clips. With this insight, the company oriented themselves, brainstorming ideas about how to improve.
Next, company executives decided to simply make YouTube open to all types of videos, with the thought that at the very least, the move would improve traffic numbers. Users quickly started posting all sorts of videos, from cats to lectures and more.
To further its reach, YouTube acted quickly to make embeddable code available for MySpace users, which was then the dominant online social network.
Yet YouTube quickly outgrew even MySpace and in 2006, the founders sold YouTube to Google for $1.65 billion.