Doing the government OODA loop
“I skate to where I think the puck is going to be.“
– Wayne Gretsky, explaining his uncanny anticipation
Since the time of the Red Baron, aerial combat has been all about maneuverability: getting your aircraft into firing position behind your target.
Not the biggest or the most powerful, the most maneuverable
While three physical dimensions of movement and high speeds, pilots in combat play their game in what famous Air Force combat pilot Colonel John Boyd called the OODA loop.
The OODA loop: Observe-Orient-Decide-Act
1. Observe. See the environment, terrain, and target.
2. Orient. Map a mental image of the battle space and visualize yourself within it.
3. Decide. Choose a tactic.
4. Act. Implement the tactic.
This is a loop because each completed OODA cycle (for either player) creates a new environment that requires a new OODA execution.
Boyd’s insight, which he pressed with abrasive consistency, was that the faster OODA loop wins over superior firepower. (Von Richthofen, for instance, stayed with his Fokker D-I tri-plane long after the Germans had introduced more powerful but slower aircraft like the Albatross V.) He was known as ‘forty-second’ Boyd for his standing forty-dollar bet that he could get on his enemy’s tail within forty seconds. This thinking now permeates the
If only the Romanovs could have looped the loop …
In recent years, rapid innovation in computers, the Internet, and even financial markets has broadened Boyd’s OODA thinking so that he has become the Sun Tzu of the dot-com generation. A host of management-consulting articles hype OODA innovation in such areas as Wal-Mart’s supply-chain management system and Dell’s product-rollout approach.
The essential OODA insight is that quick and small beats big and slow, reversing traditional market dominance. It is further explains why self-organizing networks can outperform command-and-control hierarchies.
How does this tie to public-policy? Simply:
- The ultimate big-and-slow entity is government.
- The ultimate quick-and-small entity is the entrepreneur.
Government is big. It has many constituent parts. Its decision-making is defined more by stops than by starts. Government ponders long, decides collectively, acts methodically, and then rests.
Markets swarm, they mutate, they splinter, they feud. But whatever else they may be, markets are quick.
“Individually, we’re stupid. Collectively, we swarm.”
Slower decision-making leads either to paralysis or worse, to premature commitment. During the height of the Cold War, the Soviets were so paranoid about US strategic weaponry development that they treated every scrap of rumor as confirmatory evidence that we already had whatever vaporware someone was dreaming up. They thus reacted, expensively, to things on which we never even spent a dime. The Soviet economic collapse may well have had something to do with their inability to adapt strategies after making slow enormous commitments.
Some markets are quicker than others. Information markets are the fastest, but with money increasingly represented solely by information, financial markets are not far behind.
(Can you imagine anyone making a classic bank-heist movie today? Everyone knows there’s no money in the bank itself.)
That might work if there were any money inside …
Government’s legislative cycle is excruciating, and its implementation cycle barely less so. Further, government acts publicly, so that everything is known instantly. Markets react before government can act. (This is true even in the crispest government move imaginable — the Federal Reserve’s periodic interest rate shifts. So transparent is the Fed’s process that even though the board’s deliberations are secret, and its changes effective on announcement, markets have become highly efficient at anticipating
Faster OODA loop response is a core reason why:
- Public-private partnership works better than direct government action.
- Soft equity performance-based delivery yields higher efficiency than direct grants.
- Outcome compliance beats process compliance.
The punch line is this:
Government makes a much better housing customer than housing provider.
Precisely what that means for affordable housing program design, and the appropriate hierarchy of legal governance, will be subjects of future blog posts.
