Coaching clients and listeners have been asking for help deciphering difficult situations; negotiating, dealing with potential conflict or perceived conflict. What to do when you’re feeling really out of sorts with the situation?
The OODA Loop is a four-step process for making effective decisions in high-stakes situations. It involves collecting relevant information, recognizing potential biases, deciding, and acting, then repeating the process with new information.
One such military mental model is the OODA Loop. Developed by strategist and U.S. Air Force Colonel John Boyd, the OODA Loop is a practical concept designed to function as the foundation of rational thinking in confusing or chaotic situations. â€œOODAâ€ stands for â€œObserve, Orient, Decide, and Act.â€
â€œWhat is strategy? A mental tapestry of changing intentions for harmonizing and focusing our efforts as a basis for realizing some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests.â€ â€”John Boyd
Note to self: look for new ways of thinking OUTSIDE of your real estate world.
Charlie Munger said:
â€œSpend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day â€“ if you live long enough â€“ most people get what they deserve.â€
Munger is known for stating that he systematically builds a ‘mental toolbox’ of knowledge. He looks outside of his own field and that seems to have worked for him and Warren Buffet… they ‘only’ have created a return for Berkshire of 20,000 to 1.
Back to The OODA Loop: Observe, Orient, Decide and Act. It’s called a loop because it’s meant to be a habit of thinking that you learn to repeat and ingrain in yourself as a strategy for multiple situations. Kind of like your go-to thinking method.
Step One: Observe.
What is the actual information you have to work with? Ask lots of questions, get accurate data so you can paint a realistic picture of what you’re dealing with.
Asking the listing agent what’s MOST important to the seller (in addition to price).
Asking the lender what stipulations need to be resolved to approve your (or the other agent’s) buyer.
Additionally, you must learn to disregard irrelevant information that don’t or shouldn’t affect the situation.
Step Two: Orient.
“Orientation means connecting yourself with reality and seeing the world as it really is, as free as possible from the influence of cognitive biases and shortcuts. You can give yourself an edge over the competition by making sure you always orient before making a decision, instead of just jumping in.” -John Boyd
Examples: Calm down and think before you react, at least before you react to your prospect, client or agent you’re working with. Orient yourself to the situation so you make better decisions. Have you dealt with this situation in the past? If so, how did it work out? Do you need help from a coach? If your past strategies haven’t worked, you have to find out why and correct course.
Step 3: Decide.
Test different decisions for their predictable outcome. Which is more likely to get you (or your client) the result they desire?
Step 4: ACT.
Action is testing your decision out. Even if you don’t get the exact result intended, you’ll have added to your knowledge base and be able to ‘OODA’ again next time, polishing your skills and strategies.
The 3 benefits to thinking this way are:
1. Deliberate speed. It shortens the time you are ruminating about a decision and trains you to logically think instead of emotionally react.
2. Becoming comfortable with uncertainty and making decisions anyway. Most people when faced with uncertainty do nothing… sometimes for years! Instead, be the one who takes action.
3. Making better decisions in business and in life. Systematically training yourself to look at all the angles, consider different actions and observe your outcomes.
“Boyd developed the OODA Loop with fighter pilots in mind, but like all good mental models, it works in other fields beyond combat. Itâ€™s used in intelligence agencies. Itâ€™s used by lawyers, doctors, businesspeople, politicians, law enforcement, marketers, athletes, coaches, and more.” (from the biography about John Boyd).
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