Leaders Leveraging the OODA Loop for Value Stream Management

by Andrew Robbins | November 29, 2023 | Blog

On our journey to explore the OODA Loop's application for value stream management, let’s build upon the insights gained from our last blog as an Agile Impediment Removal Tool. The OODA Loop, encompassing the stages of Observe, Orient, Decide, and Act, isn't merely a theoretical construct but a practical and transformative approach.  To bring the concept to life, let’s draw inspiration from the breakfast rituals of Alex and Skylar, two siblings preparing breakfast for their youngest sibling, Riley. Their toast-making escapades serve as an example of the OODA stages in action, demonstrating how these principles can be applied to streamline processes and drive continuous improvement in any business setting. 

Phase 1 - Observe: Identifying Pain Points in Value Streams 

Alex and Skylar noticed that they spent a lot of time making Riley breakfast in the morning, and no one seemed happy with the results, despite their efforts to have a good breakfast and get out the door. They could see their process was disjointed.  Riley loved toast with Jam, so Alex would get out the bread, put it in the toaster, and Skylar would take it from there,  spreading the jam on the toast in a circular pattern that Riley enjoyed. However, Riley rejected the toast about 2 days out of every week, and Alex and Skylar would have to start from scratch.

In the 'Observe' phase, we take the time to scrutinize our current processes. It’s important to gather data, identify delays, and recognize value stream bottlenecks. To do this, conduct a ‘value stream walk’, gather stakeholder feedback, and qualitative and quantitative information to pinpoint where your value stream may be lagging. Are there stages in your production where time is wasted? Is there a step where customer feedback often becomes negative? These insights are vital for informed decision-making. 

Phase 2 - Orient: Analyzing and Understanding the Data 

In our toast example, Skylar asks Riley why the toast was inedible.  Riley wanted it warm to the touch. Skylar realized that sometimes the toast would sit in the toaster for up to 10 minutes when it was finished.  Alex and Skylar’s realization that hand-off caused the problem mirrors the need for businesses to analyze their processes and determine where simplification or integration could improve flow. 

The 'Orient' phase requires a dive into the data collected. It's about understanding the relationships between different steps in your value stream and identifying underlying causes of inefficiencies. To analyze your process, Utilize tools that make sense. Many tools can work with Agile or Lean methodologies. The important thing is to understand how each step in your value stream contributes to the overall business goals. Is there alignment or are there disconnects that need to be addressed? Understanding these dynamics is crucial for effective streamlining. 

Phase 3 - Decide: Strategic Decision-Making 

When Alex and Skylar understood what was impacting the end result goal–Riley eating her toast–they were able to redesign their process so one person could carry the toast through to its end, ensuring Riley received a warm breakfast. This mirrors the need for teams to carry out as much of the value stream as possible, avoiding unnecessary hand-offs. 

Armed with insights, the 'Decide' phase is where strategic planning comes into play. It's about prioritizing areas for improvement and crafting realistic solutions. This is where you need to be strategic. Prioritize improvements based on their impact on overall value delivery and align them with your business goals. Decisions might involve reallocating resources, introducing new technologies, or retraining staff. Ensure that your decisions are scalable and sustainable. 

Phase 4 - Act: Implementing and Monitoring Changes 

Just as Alex and Skylar made a plan to make sure Riley got warm toast, they needed to observe Riley's response to the changes in their toast-making process.

Similarly, businesses need to closely monitor how changes impact their value stream. The 'Act' phase is about bringing your decisions to life. Many businesses spend a great deal of time exploring issues but do commit to actions that address them.  And, implementation of a strategy must be accompanied by vigilant monitoring to gauge effectiveness.

Keep a close eye on key performance indicators. Are the changes yielding the expected improvements? Be prepared to adapt and tweak your strategies based on real-time feedback and data. Remember, the value stream is dynamic, and your approach should be equally agile. 

Iteration for Continuous Improvement

Alex and Skylar's story doesn’t end with one cycle; they will continue to refine their process. Eventually, they may want to get Riley to eat eggs.  The iterative nature of the OODA Loop ensures continuous refinement. Similarly, businesses should use the OODA Loop as a continuous improvement tool, always seeking ways to enhance value delivery. 

Conclusion 

The OODA Loop is more than just a conceptual framework; it's a practical guide for managing and improving value streams in any business. The narrative of Alex and Skylar's breakfast endeavors serves as a tangible illustration of the OODA Loop in action, highlighting its iterative nature and the importance of continuous refinement. Embracing the OODA Loop as a continuous improvement tool empowers businesses to navigate challenges, enhance value delivery, and foster a culture of adaptability toward growth and excellence.