I’m all for truisms. But sometimes they need a little alteration to really hold. You know the saying ‘the only thing certain in life is death and taxes’? Well, I would make it ‘death, taxes, and change’. Life is uncertain. Your circumstances can change drastically from one day to the next. Even the more gradual changes you barely notice day by day can shift things a lot.
So, what do you do when you wake up and start to question all the plans you made and the goals you’ve been working towards?
It’s not always enough to just ‘think about it’. Things like current emotional states, stress, and perspective can all cloud our judgement.
When you feel lost and uncertain, the OODA loop can help you.
What is the OODA loop?
The OODA loop is a decision-making shortcut often used by the military in chaotic, confusing situations. It was developed by U.S Air Force Colonel John Boyd for fighter pilots to use. If it’s good enough for fighter pilots, it’s probably good enough for us too.
OODA stands for Observe, Orient, Decide, and Act.
Observation is crucial for decision making. You not only need a general awareness of the situation, but also an awareness of what information is relevant to you, right now. Let’s say you’re trying to decide what to do with some stocks.
You should know how the market is performing in general, and any factors that might be having widespread effects.
You should also know how that company, in particular, has been performing, any factors that might be influencing it right now (e.g is it a seasonal business?), and also be aware of any personal factors that might impact your decision making (e.g a large expense looming which might push you to sell).
Orienting is the trickiest part, but also extremely important. It involves becoming aware of how you observe, any assumption you operate under, your own cultural expectations and perspectives - then putting them aside and replacing them with objective information. Considering a variety of possible outcomes and mentally preparing for how you would deal with them is also part of the orientation step.
You’ve done the hard part. You’ve gathered and assessed all the information. Now it’s time to make a choice and act on it.
Don’t underestimate how important this step is. All that juicy thinking and assessing is useless if you don’t make a move. At the end of the day, this step is what it’s all about.
Full example: you decide to get a loan.
First of all, you’d observe. Make note of the current interest rates available. You’d gather information like how much you need, when you need it by, and what kind of repayments you can manage.
Next, you’d orient yourself. Did you assume that a loan from a bank is the only place to get funds? Could you get the same result from a credit card, or a loan from a non-bank lender? Knowing what’s on offer at other places could give you greater negotiating power, so make sure you’re fully equipped.
You’ve gathered your information, you’ve considered a variety of possible outcomes, and have considered how you’ll respond to each of them. You’ve decided.
Now you’re ready to act.