The idea centers on an incredible strategic tool: the OODA Loop — Observe, Orient, Decide, Act. Nation-states around the world and even terrorist organizations use the OODA Loop as part of their military strategy. It has also been adopted by businesses to help them thrive in a volatile and highly competitive economy.

Phil von Heydebreck

It is a learning system, a method for dealing with uncertainty, and a strategy for winning head-to-head contests and competitions.

Phil von Heydebreck

here's the problem with using chess as a model for the kinds of decisions that we make in life is that chess is a very constrained problem, meaning there just isn't a lot of uncertainty in it. There is a very little bit of luck and there's no hidden information in the sense that you can see all the pieces sitting right in front of you, so I have access to your whole position.

Phil von Heydebreck

In poker, I could make terrible decisions in comparison to you. We could be playing poker and I could make every decision that I make could be worse than yours and I can still win the hand. That can't happen in chess. If I make worse decisions than you in chess, I will lose.

Phil von Heydebreck

You can improve the probability that you will have good outcomes by improving your decision-making, but that is not making your own luck. That is increasing the chances that you have a good outcome. You can't guarantee that things will turn out well and even though you might have made decisions that increased the probability that you have a good outcome, you cannot guarantee it. You cannot make luck go your way. It's this idea of incrementally increasing the chances that things go well for you and that hopefully, those things play out over time.

Phil von Heydebreck

In a nutshell: Like-minded people, talking only with one another, usually end up believing a more extreme version of what they thought before they started to talk.

Phil von Heydebreck

imagining that an event has already occurred—increases the ability to correctly identify reasons for future outcomes by 30%.

Phil von Heydebreck

A premortem is the hypothetical opposite of a postmortem. A postmortem in a medical setting allows health professionals and the family to learn what caused a patient's death. Everyone benefits except, of course, the patient. A premortem in a business setting comes at the beginning of a project rather than the end, so that the project can be improved rather than autopsied.

Phil von Heydebreck

The leader starts the exercise by informing everyone that the project has failed spectacularly. Over the next few minutes those in the room independently write down every reason they can think of for the failure—especially the kinds of things they ordinarily wouldn't mention as potential problems, for fear of being impolitic.

Phil von Heydebreck

Next the leader asks each team member, starting with the project manager, to read one reason from his or her list; everyone states a different reason until all have been recorded. After the session is over, the project manager reviews the list, looking for ways to strengthen the plan.

Phil von Heydebreck

Create the right atmosphere: As the final decision maker, ask others to speak up (starting with the most junior person); show you can change your mind based on their input; strive to create a “peerlike” atmosphere. Encourage expressions of doubt and create a climate that recognizes reasonable people may disagree. Encourage substantive disagreements on the issue at hand by clearly dissociating it from personal conflict, using humor to defuse tension.

Phil von Heydebreck

Make sure the right people are involved: Ensure diversity of backgrounds, roles, risk aversion profiles, and interests; cultivate critics within the top team. Invite contributions based on expertise, not rank.

Phil von Heydebreck

Assign homework: predecision due diligence, Request alternatives and "out of the box" plans. Consider setting up competing fact-gathering teams charged with investigating opposing hypotheses.

Phil von Heydebreck

Create the right atmosphere: As the final decision maker, ask others to speak up (starting with the most junior person); show you can change your mind based on their input; strive to create a "peerlike" atmosphere. Encourage expressions of doubt and create a climate that recognizes reasonable people may disagree. Encourage substantive disagreements on the issue at hand by clearly dissociating it from personal conflict, using humor to defuse tension.

Phil von Heydebreck

Manage the debate: Before you get going, make sure everyone knows the meeting's purpose (making a decision) and the criteria you will be using to make that decision. For recurring decisions (such as R&D portfolio reviews), make it clear to everyone that those criteria include "forcing devices" (such as comparing projects against one another). Take the pulse of the room: ask participants to write down their initial positions, use voting devices, or ask participants for their "balance sheets" of pros and cons. Pay attention to the use of comparisons and analogies: limit the use of inappropriate ones ("inadmissible evidence") by asking for alternatives and suggesting or requesting additional analogies. Force the room to consider opposing views. For vital decisions, create an explicit role for one or two people—the "decision challengers."

Phil von Heydebreck

Follow up: Commit yourself to the decision. Debate should stop when the decision is made. Connect individually with initial dissenters and make sure implementation plans address their concerns to the extent possible. Monitor pre–agreed upon criteria and milestones to correct your course or move on to backup plans.Conduct a postmortem on the decision once its outcome is known. Periodically step back and review decision processes to improve meeting preparation and mechanics, using an outside observer to diagnose possible sources of bias.

Phil von Heydebreck

… however aware you are of biases, you won't necessarily be immune. You should see yourself as the architect of the decision-making process, not as a great decision maker enhanced by the knowledge of your biases.

Phil von Heydebreck

Olivier Sibony: The point we haven't conveyed effectively enough is that however aware you are of biases, you won't necessarily be immune. You should see yourself as the architect of the decision-making process, not as a great decision maker enhanced by the knowledge of your biases.

Phil von Heydebreck

Chip Heath: The process changes don't have to be very big. Ohio State University professor Paul Nutt spent a career studying strategic decisions in businesses and nonprofits and government organizations. The number of alternatives that leadership teams consider in 70 percent of all important strategic decisions is exactly one. Yet there's evidence that if you get a second alternative, your decisions improve dramatically.

Phil von Heydebreck

Chip Heath: I'm a fan of frameworks, but you don't have to be 100 percent there to improve dramatically. One legitimate criticism of the decision-making field is that we have this overwhelming zoo of biases. In our most recent book, Decisive, we therefore came up with 4 intervention points in the decision process. Others propose 40 intervention points. Nobody will be successful intervening at 40 decision points.

Phil von Heydebreck

A Wider set of options means you're going to have more debate. By Reality-testing assumptions, you look at the reference class of events... Then there is the process of actually making a decision. It's now slightly more complicated because instead of one option you've got two, and you've done some due diligence on both. When you find yourself agonizing about a choice, it's important to step back and Attain some distance. Finally, you should be Preparing to be wrong at the end of the process—that's about hard-to-acknowledge uncertainty.

Phil von Heydebreck

Olivier Sibony:...Usually, they assume that you get all the facts first and then discuss them, which is not the way to go. Only when you create a debate and identify what it would take to believe one option versus another will you look for facts that would disprove your initial hypothesis.

Phil von Heydebreck

At Intuit, founder Scott Cook developed what they call a culture of experimentation. As he put it, most decisions are based on "politics, persuasion, and PowerPoint," and none of these "three Ps" are fully trustworthy. So Intuit bases decisions on experiments.

Phil von Heydebreck

They call it "Fake-O-Backend." Imagine that they put up a Web page for a new "deduction analysis" service, and when people plug in their information on the Web site, the company goes to a tax attorney for the answers instead of programming all the computations. The back end is fake. The front end tests whether people would purchase a new service.

Phil von Heydebreck