Certain to Win: The Strategy of John Boyd, Applied to Business

by Chet Richards

Those who know the situation in the marketplace serve the role of spies for the leaders of modern companies. They will sometimes be bearers of bad news, and, if you follow the Sun Tzu tradition, they will bear this news to you while there is time to act. They are saviors of the company and should be recognized and rewarded as such. True, it takes a strong leader to admit publicly that a position that he or she championed is now wrong or outdated. But in this day and age, companies without strong leaders are doomed, anyway.

It bears repeating that if you cannot or do not spot mismatches, and generally this means finding bad news, your orientation becomes detached from reality. Then, since decision and action flow from orientation, your decisions (implicit and explicit) will be flawed and your actions will not have the effects you intend. Furthermore, you won’t understand why all this is happening to you, despite your best efforts, and breakdowns at both the group and individual levels can be expected.75 You will have lost the initiative, and short of sheer dumb luck, you are going to lose the conflict.

What Boyd discovered was that the side with the quicker OODA loops began to exert a strange and terrifying effect on its opponent. Quicker OODA execution caused the slower side to begin falling farther and farther behind events, to begin to lose touch with the situation. Acting like the “asymmetric fast transients” experienced by fighter pilots, these mismatches with reality caused the more agile side to start becoming ambiguous in the mind of the less agile.

One advances not in the open, for example, where even a massive force can be assessed logically, but by devious and hidden routes, employing feints and disguises. If something vital, such as life itself, is at stake, losing track of a deadly threat in the fog of ambiguity can quickly lead to confusion, panic, and terror (which was the idea behind those Alfred Hitchcock classics), which in turn will cause the decision-making of the less agile party to break down. Deception then becomes like taking candy from a baby, and at this point he can easily be finished off, should that still be necessary.

The Germans, or some small fraction of them, were able to execute and sustain fast decision cycles, even against the friction of war, because they had instilled an organizational climate or culture that mitigated friction’s effects. More important in Boyd’s view was that by accelerating their OODA loops, they could generate those unexpected, abrupt, and “jerky” transients, such as when they suddenly appeared in force in the south (Map 4), that enabled them to pump up friction on the allied side. It wasn’t that the Germans were smarter than the French and British or could peer farther into the future. No, their secret of success lay in that organizational climate, which enabled them to better exploit the chaos that would come, and in fact that they were helping to create.

The reason we’re winning is that we’re kind of outthinking him. We’re operating inside his decision cycle.—Brigadier General Richard Neal, US Central Command, Riyadh, Saudi Arabia, February 1991

Before the First Gulf War, the Army established a year-long course, the School of Advanced Military Studies (SAMS) at Ft. Leavenworth, Kansas, where a select group of Command and Staff College graduates study ways to apply warfare based on rapid decision cycles—“maneuver warfare.” Boyd worked with SAMS’s founder, then-Colonel Huba Wass de Czege, and lectured there on several occasions. SAMS alumni call themselves “Jedi Knights,” and Gen Schwarzkopf’s staff in Riyadh contained upwards of 60 of them.82

“The effectiveness of our Marine Corps forces was most dramatically demonstrated by the brilliant movement of I MEF through numerically superior defensive forces into Kuwait City—revalidating the maneuver warfare doctrine adopted by the Corps.”88 As we now know from Robert Coram’s book, Secretary Cheney summoned Boyd to Washington several times during Desert Shield (the prelude to the liberation of Kuwait, Desert Storm) and the final version of the plan reflected Boyd’s ideas on maneuver warfare.

At the big consulting companies, strategy business is down, while billings for information systems surge. It is as if corporate leaders believe that it is more important to install technology than to understand what to do with it. This is a dangerous attitude since it is possible to spend billions implementing technology that will make the company less competitive, as General Motors did with its automation effort in the 1980s that coincided with its 40% drop in market share.

We have seen that in war, technology has not been a strong factor in determining who wins, whereas strategy is often the difference between victory and defeat: Therefore it is said that victorious warriors win first, then go to war, while defeated warriors go to war first, then seek to win.

So Alfred Sloan’s famous description of General Motors’ mission as, “We don’t make cars, we make money,” worked fine—until his successors faced the Japanese, who made better cars, and, incidentally, lots of money.

Victory is achieved in the way of conflict by ascertaining the rhythm of each opponent, by attacking with a rhythm not anticipated by the opponent, and by the use of knowledge of the rhythm of the abstract. Miyamoto Musashi,

Future1 is the idea of the future that best defines what we want for ourselves and our strategy gives enough guidance for us to construct plans to achieve it. At the level of strategy, we don’t worry too much about the specific plans inside the big arrow. We are confident in our abilities to create plans, within the overall strategy, because we have worked and trained together in the past in circumstances not too dissimilar from where we are now. Once Schwarzkopf had the concept of holding the Iraqis in Kuwait and hooking around them to the left, his planning staff and subordinate commanders could do their jobs and create, modify, and discard specific plans.

Options mean more than new products and services. The creators of the Toyota Production System stress the importance of creating a company culture that constantly reduces costs, as a natural part of daily operations, while improving quality and shortening customer delivery span times. By keeping costs on a steady downward slope, they preserve pricing options, that is, they can reduce prices when economic times are bad and still make a profit. Thus they survive on their own terms, without placing themselves at the mercy of creditors. When times are good, they make money faster than they can count.

Here is an idea for such a strategy. It is certainly not the only one, but it is based on the patterns of thought described so far in this book, and it has worked well for military leaders over the ages: 1. Within your team (company, division, or whatever defines “we” for you), form a clear (though not rigid) view of what “survival on your own terms” means. 2. Cultivate an organizational climate, such as the one described in this book, that will enable your business to operate at increasingly quicker OODA loop speed. 3. Foster an organizational ethos that grows and strengthens the climate, that promotes those who use it and removes those who do not.

That these “pre-conflict” activities form an integral part of strategy is an ancient idea. As we saw, the Chinese of Sun Tzu’s day insisted that the war was won or lost before the action began, and much of the Art of War concerns preparing a culture that is certain to win. Pre-war activities and decisions also form part of the level of conflict known as grand strategy—pumping up our morale and attracting the uncommitted to our side.

The Chinese, in their commentary on Sun Tzu, summarized the practice of strategy as a way to respond to changing conditions and create timely options. The strategy is in the responding and creating (what OODA loops do), and not in the options (e.g., plans & tactics) themselves. One can almost hear the exasperation in the commentators’ voices as they asked how one could possibly say in advance what their specific actions would be. By the late 19th Century, military leaders, driven by the lethality new technology was bringing to the battlefield, realized the need to return to this more flexible and opportunistic view of strategy. Helmuth von Moltke, whose armies had won the wars that unified Germany, concluded that, “Strategy is a system of ad hoc expedients.”

The best Japanese carmakers routinely use their superior OODA loop speeds both to find and to shape what customers really want, whether the customers know it or not. The Japanese even have a name for it: miryoku teki hinshitsu, which roughly translates as “What the customer finds so beguiling or fascinating that he cannot live without it.”105 It is an abrupt change in the customers’ attention, from the quality and value they expected to something special and delightful that took them by surprise. This is an analogy of the jarring, unorthodox, and disorienting changes typical of Boyd-type strategies in armed conflict, except that in business, the decisive effect is on the customer, where it counts.

Go find the best chess player you can and offer to play for $1,000 under the following conditions: • Your opponent moves first. • You move twice for every move of his or hers. In fact, you can even offer to give up some pieces, to make it more fair. You will find that, unless you are playing somebody at the grandmaster level, you can give up practically everything and still win.

Signs Your Strategy Is Working In War • Vehicles or couriers blundering into your lines • You reach an enemy position to find rations still being cooked • Shelling of your last position after you left • Surrender after token resistance • Piles of uniforms by the side of the road • More prisoners than your military police can handle

There is a well-known name for this detachment from reality that strikes the less agile side: the fog of war. Boyd’s observations on the effects of agility boil down to the conclusion that by becoming more agile than your competitors, you can cause the fog of war to grow in their minds, thereby decreasing the quality of their decisions and eventually attacking their abilities to make effective decisions altogether.

Joseph Juran’s classic description of what happens to a company that is starting to lose: “Lacking victories over their competitors, and unable to defend themselves from their bosses, they lash out at each other, making unity of purpose even harder to achieve.”

How to Tell Your Strategy Is Working in Business • Your competitor’s new products are consistently late and lack your features or quality. • He starts blaming the customer, or insisting that his sales force “educate the customer.” • Personnel turnover is high. • He becomes even more “Theory X,” instituting rigid, explicit controls, frequently in the name of containing costs. • He launches witchhunts and other ever-intensifying internal searches for “the cause of the problem.”

In one company I worked with, managers spent a couple of weeks every year in a detailed numerical evaluation against the objectives in their year-old plan. They used the plan as a checklist. All the various objectives were numbered and they went through them, one-by-one, each manager presenting evidence to show that s/he had indeed met his or her parts of the plan. Nobody raised the issue of how well they helped shape their marketplace. There was no discussion of whether their culture was becoming more competitive, or for that matter, about the competition at all. To think that you can predict what needs to be done a year from now is sheer arrogance.

Meanwhile, what about the competition? A few weeks may not sound like much, but the world standard of competition is less and less forgiving of time spent working the wrong problem. Consider that in many industries, such as consumer electronics, the best companies can design and introduce new products in six months or so.

If you really believe that the world needs a lightweight, portable, rapid cooking device (this is a vision of the future and a potential Schwerpunkt), then trust your instincts, learn what you can from your customers about the first experiment, and press on. If you are right, then maybe it will be you, and not the Japanese, who bring out the first commercially successful version. If not, then if you know your business, your intuition—your Fingerspitzengefühl—will tell you when its time to shift to something else. In any case, the experience will have added to your store of intuitive competence in your field. When Apple was trying to move upscale from the Apple II, it brought out not one, but two commercial flops (the Apple III and the Lisa) before hitting pay dirt with the Mac. It was Steve Jobs’ clear focus on an “insanely great” new personal computer that saved Apple from destruction. There is nothing wrong with conducting post-mortem investigations into your success and failures and you should do this as a matter of course. Problems arise when you change strategies after every one.

Dr Jonathan Shay, who studies trust and cohesion for a living, once noted that: The machine metaphor of a military unit was never apt, especially in a fight—where it counts. When you replace the carburetor of a car, it works from the get-go, if it’s the right part. It doesn’t have to practice stopping and starting with the brake linings, or learn the job of the brake linings so that the brakes and the carburetor say they can read each other’s minds. This is the way members of a tight military unit speak of each other.

Man is the child of custom, not the child of his ancestors. Arab historian Ibn Khaldun (1377 A.D.)

Herb Kelleher, chairman and recently retired CEO of Southwest Airlines, brags that competitors could copy the details of his system—direct (as opposed to hub-and-spoke) routings, no reserved seats or meals, one type of aircraft, etc.—but they couldn’t copy the culture, the vibrant esprit de corps, because “they can’t buy that.”

Mutual trust is the internal harmony that converts a mob into a team. For this reason, it underlies all the other components of a competitive organizational climate. It defines the boundary between “us” and “them.” We have seen its power to win wars, and it exerts a similarly profound effect in other human endeavors.

Shigeo Shingo, one of the architects of Toyota’s magnificent system, wrote, “I believe the most important factor is maintaining a relationship of trust between labor and management.”

Although “mutual trust” gives us all a soft, warm feeling, how does it actually help win? Simply, it speeds execution of OODA loops. The reason? For starters, it permits implicit communication among team members, where very little needs to be written down. Obviously, people can communicate this way much faster than through any form of writing—it’s much quicker not to say something than to spell it out in detail. Implicit communication, with enough mutual experience, can provide more information more accurately as well. A raised eyebrow, a subtle change in inflection, a barely-noticed hesitation—these mean something if you have worked together long enough to read them. You learn when the boss is speaking rhetorically and when s/he is really serious, where you can improvise and where you’d best stick to the straight-and-narrow. And this wealth of information transmits in an instant, but only implicitly. On the other hand, explicit forms are often used not to communicate but to document, not to inform but to protect oneself. You may have been in organizations where everybody documented everything. My guess is that you did not notice much trust.

The damage done to individuals by managers’ violation of “fair process” in a business is mitigated by the fact that unlike in the military, employees can leave at any time. The best ones, that is, the ones likely to have the most career options, generally are the first to do so.

One effective way to violate “what’s right,” and so eliminate trust from any organization is for top executives to pay themselves and their immediate coterie multimillion dollar bonuses and guarantee their pension plans, while the company records losses in the hundreds of millions and lays off workers by the thousands.

Klein and his company demonstrated that firefighters and other people who must act quickly in rapidly changing situations with imperfect information do best when their intuition immediately gives them an acceptable course of action. This intuition, of course, is the product of years of experience. Junior military officers beginning their careers were able to make “recognition-primed” decisions (intuition and constructing simple mental models) slightly over 40% of the time. Senior battlefield commanders, on the other hand, were able to rely on recognition-primed faculties in upwards of 95% of their decisions. Formal decision making, of the type typically taught in business schools, is required only when experience is inadequate.124 Intuitive knowledge is so important in shaping the real world that Klein labeled it as one of the primary “sources of power.”

They just, as Musashi insisted, get to a useful result sooner.126 This is the whole idea behind the Toyota Production System: Create a system where activities become unnecessary—Toyota has a well-defined framework consisting of categories like muri, mura, and muda127—and the whole system operates more quickly, even though the people within it don’t appear to be working harder than their competitors anywhere else. This is taught in even the most elementary primer on the system. However, what is sometimes overlooked is that the system works only because of the intuitive competence that Toyota employees develop in sensing these elements and making improvements. If a just-in-time production line had to wait for a formal decision process to work, it would hardly move at all, and it would never improve.

When problems do occur the people on the spot are expected to use their skill and initiative to solve them, or, if that is not possible, to summon assistance from the nearest available managers and engineers, and to make this decision quickly and intuitively. It is said that someone who understands the system can walk into a factory, close his or her eyes, and tell by listening and feel if everything is working properly. This ability to sense the state of the system is critical in avoiding major breakdowns and while it may seem magical to an outsider, it develops naturally through increasingly complex interactions with the system.

Now it is true that as a precondition to intuitive knowledge, the aspiring warrior or executive must practice basic skills so well that they become second nature. In Japanese samurai fencing, kendo, the student practices day and night until “sword becomes no-sword; intention becomes no-intention.”128 This is what we mean by tactical skill. Now you are ready to begin acquiring a true intuitive competence. How? By using these skills in ever more complex circumstances so that you build an intuitive feel for situations where there is a lot of stress and the answers are not clear. We do this through incessant practice, incorporating exposure to an ever-widening variety of new and challenging types of situations, and with feedback from knowledgeable individuals (otherwise we’re practicing our mistakes.) We polish individual techniques and also train as a group, thereby building the type of cohesion—mutual trust—that facilitates implicit communication. As Musashi summarized it, in the translation by Hanshi Steve Kaufman, which was Boyd’s favorite: Practice is the only way that you will ever come to understand what the Way of the warrior is about … Words can only bring you to the foot of the path …”

In his classic study on the origins of the Blitzkrieg, military historian and Marine Corps officer Bruce Gudmundsson concluded that the key to decentralized execution, where intuition and initiative can flourish, lies in what he called “a self-educating officer corps.” Practically all German officers, he observed, “believed that Germany’s fate depended directly upon their tactical competence.”

Many US companies give little importance to training their blue-collar workers. They think nothing of spending $10,000 to send a senior manager to a 3-week executive seminar, which may well be justifiable, but begrudge the “lost time” hourly workers accrue for even a 1-hour quality improvement class. You can imagine what this does for mutual trust.

Isn’t it true that the more you practice, the better you get? Yes, but, and this bears repeating, the intuitive mastery we are striving for is not brilliant skill at predictable tasks. As the late science fiction author, Robert Heinlein, pointed out, specialization is for insects. Humans need the mystifying ability to cope with the unpredictable and ambiguous challenges posed by thinking adversaries in the real world. Since kendo masters practice hard, don’t we need to put in long hours to develop super competence? The answer is absolutely yes. However, sixteen hours at the office doing the same things day after day simply make you a workaholic (and very likely a micromanager); they do not per se confer an intuitive skill useful in competitive situations.

You will rapidly discover that a mutually agreed understanding—a contract of sorts—is a wonderful device for fostering a sense of responsibility among the people at your company. Because they have to consider, think, and agree, rather than acquiesce, you will sense increased morale and improved dedication. All of this, of course, reinforces mutual trust and implicit communication, which, as we have seen, are critical elements in increasing your OODA loop speed.

At Nissan and Toyota, project managers for new models enjoy total control over the car’s design and engineering. Senior managers, even the president of the corporation, are forbidden from interfering, once they have approved the project. As long ago as 1989, Nissan developed the Maxima in 30 months, roughly half the US industry’s average at the time and well below it even today, with such quality that the year it was introduced, it topped the J. D. Power initial quality survey.

Gary Klein, in his seminal work, Sources of Power (another book, which along with his next, Intuition at Work, should be in every manager’s and strategist’s desk drawer), illustrates the intuitive / implicit nature of a business contract (drawing on Karl Weick’s version of a conversation between a boss and a team member): • Here’s what I think we face • Here’s what I think we should do, and why • Here’s what we should keep our eye on • Now, talk to me

Futurist James Ogilvy simply denounced managing through goal setting as “bunk.” Instead, he recommends that: Organizations should tread near the edge of the future, making it up as they go along, with as much sensitivity, awareness, knowledge, compassion, feeling, and beauty as they can muster.

Any mission should include a statement of the commander’s intent (“in order to” or equivalent) and information on missions two levels up. Same is true should you decide to assign a goal. “Cut costs by 15%!” you say. Why 15%? Why not 20%? If we can cut costs by 15% now, why haven’t we already done it? Is management accusing us of being shiftless, wasteful, and lazy to the tune of 15%?

Toyota’s overall guiding concept: The Toyota Production System, quite simply, is about shortening the time it takes to convert customer orders into vehicle deliveries.141 This is one of the best vision / focusing statements in the world of business. Instead of setting arbitrary goals, it tells everybody who works for Toyota that whenever they are in doubt about what to do, take the action that will reduce customer-to-delivery span time. It sets a direction, not a goal, since wherever we are this year, we will be better next year.

Toyota did not say that they want to shorten the time taken to perform each activity within the system. This is worth repeating: the purpose of the TPS is to shorten overall order-to-delivery time. It does not follow that the best way to do this is to try to compress the time taken by each activity within it. That way would not work and would indeed lead to poor quality. It is more likely that they would shorten the delivery span by finding ways to eliminate activities, since an activity eliminated takes no time to perform (it also adds no defects and costs nothing.) Similarly, they don’t try to rush decisions, like what type of water pump the car will have. In fact, there is a concept within both Toyota’s development and production systems known as “learning how to wait,” based on the notion that it takes less time to do something right than to do it over. Thus they would not be interested in making decisions earlier on the factory floor. They would rather make the decision at the appropriate time, and put more thought (more OODA loop cycles) into it.

I cannot give you a formula for flowing focus and direction to sub-groups and teams nor, as Musashi insists many times, will you master the concept by reading a book (this or any other). You must try these concepts, practice them, create mechanisms for sharing experiences, develop common outlooks and orientations, and manage by them. Armed with the general idea and a willingness to experiment (and make mistakes), you can develop the skills with this concept that have served successful leaders so well in the past.

Individuals cultivate and polish their intuitive competence, Fingerspitzengefühl, for the jobs they hold—whether lathe operator, junior drafter, engineer, sales person, project leader, or senior executive. Represent this by small rectangles (bear with me.) Figure 13—Individual Competence Einheit is usually translated as “unity” or “mutual trust.” But as Boyd noted, it can also be thought of as a super-Fingerspitzengefühl—it suggests the competence of the group, working together to accomplish some purpose. So Einheit aligns the rectangles, although not rigidly. Figure 14—Einheit Represents Intuitive Competence of the Group Schwerpunkt provides focus and direction to aim the entire organization towards that goal or purpose. Figure 15—Schwerpunkt Aims the Organization And finally, the mission contract, Auftrag, provides the energy, the motive force to encourage the members of the group towards accomplishment of the common goal.