I believe most things run in cycles: the economy, the stock market, fashion, moral codes, even one’s own personal status and influence (your personal "stock price," so to speak)—sometimes you’re hot, sometimes you’re not. The past couple of years have been particularly harsh in reinforcing a history lesson for us: when the pendulum swings very hard and far in one direction, it will most assuredly swing just as decisively in the other eventually.
During recessions, uncertainty prevails, and like a driver trying to weave his way along a mountain road in heavy fog, many businesspeople eventually tire and just pull their businesses over to what seems like a safe embankment, turn off their engines of innovation and progress, and wait for the fog to lift. But how long can one afford to sit on the roadside? At what point does it become riskier to do nothing than to proceed with caution? One has to wonder if there’s a better way, a way to keep moving forward in measured, confident increments, rather than eventually creating an additional element of uncertainty by deferring innovation altogether.
Understanding human behavior in uncertain times
A few years ago, when I was trying to improve my understanding of human behavior in order to become a better negotiator of business transactions, I spent a considerable amount of time learning about a decision-making model called the OODA Loop (Observation, Orientation, Decision, Action). Colonel John Boyd, a U.S. Air Force fighter pilot, invented the model. Reportedly, Boyd never lost in aerial combat during the Korean War or as one of the first instructors at the Air Force’s Fighter Weapons School, so he must have known something about accurately interpreting ever-changing information and making sound decisions quickly. Boyd’s articulation through the OODA Loop model of how decisions are influenced and made—and of how to disrupt an opponent’s loop—is considered by many to be the most important military breakthrough of the twentieth century.
The OODA Loop model comprises four major steps:
|Source: MindSim Corporation|
The fundamental issue to understand about the OODA Loop model is that the ability to properly execute each successive step is entirely dependent on the preceding step. Thus, if one’s landscape cannot be accurately viewed, then the quality of any formulated options will be compromised, as will any decisions derived from those options. From a military perspective, this is a crucial point. For example, if Opponent A enters Opponent B’s OODA Loop and disrupts his ability to make sense of his situation, then Opponent B will become trapped in the first stage of the process—observation—and will be unable to formulate options and make decisions. While Opponent B is trapped and becoming progressively more confused, frustrated, and exhausted, Opponent A has the opportunity to successfully work through his own process, hopefully identifying a way to bring the battle to a peaceful conclusion in his favor.
During recessions, factors such as unpredictable demand, declining profits, budget uncertainty, lack of consensus, and constrained resources are the enemy. They all cloud the businessperson’s landscape. In the best of times, the businessperson can follow a linear path of observing, orienting, deciding, and acting. Implementing the decided action absorbs most of his time, and actions can be taken more decisively because there’s plenty of money for additional resources; more money also means that failures can be absorbed more readily. Taking risks is more acceptable, which produces actions that tend to be broader and more complex.
In uncertain times, however, it becomes very difficult to move forward in the OODA Loop due to the uncertainty created by constant change and lack of predictability. Even when a modest level of clarity can be achieved, it is still difficult to formulate and evaluate options due to time and resource constraints and the aversion to risk. As summarized in the table below, attempting to set the stage for making decisions, rather than executing them, consumes an enormous amount of time during hard economic periods. Moving from just one step in the loop to the next can represent a major victory in itself.
|OODA stage||In boom times||In hard times|
|OBSERVATION||Variables are clear and stable||Variables are uncertain and frequently changing|
|DECISION||Simple, few constraints||Complex, highly constrained|
|ACTION||Low risk, high tolerance of failure; action is likely||High risk, low tolerance of failure; inaction is likely|
|EMPHASIS IN PROCESS||Executing action||Gathering data, analyzing options|
Recognizing the need for new approaches
Everyone would prefer to work in the "boom times" situation described above. Businesspeople hate spinning their wheels when assessing their situation and developing options. They like being decisive, and they enjoy watching their actions unfold and take shape. In good times, design firms work with businesses to provide them with innovative options and highly detailed plans for how to implement them. For both parties, there is one goal: identifying and designing the big idea, then implementing it.
But what happens when the business landscape is turned upside down? How can the decision-maker and design consultancy work together when it’s so hard just to stabilize the environment enough to create a jumping-off point for a project? Why even begin a project when there’s a high probability that the course will need to change halfway into it?
The answers lie in recognizing that the "big bang" theory of innovation—one big idea, one big implementation plan—is just one approach. In reality, change is more frequently implemented in small doses than in large. Designers can work just as effectively in more tightly-defined situations. The key insight is that innovation is not a goal in of itself; rather, it is a process that comprises many smaller goals.
|OODA stage||Business goal||Design process for achieving goal|
|OBSERVATION||Start something||Opportunity assessment: joint articulation of the potential opportunity, or clear statement of the problem|
|Get the organization into agreement on how to proceed||Vision alignment: unify client organization around key objectives before finalizing the project plan|
|Understand the targeted industry or domain||Domain analysis: capture trends, practices, and the general flavor of how things are done in an industry|
|Find out if competitors are on track, or determine what they’re missing||Competitive analysis: identify who’s doing what and evaluate their product/customer strategy|
|Know the customers/users inside out||User research: interview and observe existing or potential customers|
|ORIENTATION||Put things in perspective: identify the kind of solution that is likely, and for whom||Model: develop user models and define high-level functional requirements based on them|
|DECISION||Improve the odds of immediate product success—the right product at the right time||Envision: formulate one or more high-level concepts of the product and determine the product’s essence; i.e., at a conceptual level, what it must be to create a superior, satisfying experience|
|Make the right choice before moving deeper into product development||Consult: advise client on advantages and disadvantages of each approach; e.g., the tradeoffs for the users in exchange for lower development costs|
|ACTION||Improve customer satisfaction, retention and loyalty; generate great word of mouth||Refine: create the customer experience using iterative modeling of use case scenarios to fully identify needed features and to refine their behaviors—Envision locates the target, Refine hits the bulls eye|
|Eliminate risk from the development cycle—enhance predictability of project completion, product quality, and financial requirements; increase visibility into the process||Documentation: develop detailed design specifications, or "blueprints," to provide developers with step-by-step instructions on how to develop the product|
|Keep developers true to the design, on track, on time, and on budget||Support: periodic consulting with the developers as they code; create workarounds for technical roadblocks while ensuring that the product remains true to the design|
The table above illustrates that many goals need to be achieved to break through stalemates in the decision-making process on the way to innovation. How time and resources are allocated to tackling those goals depends on the variables encountered in the process, which, of course, are a function of the times. Since variables are radically different between boom and bust times, by necessity businesspeople must reexamine their approaches to solving problems and pursuing opportunities when the good times fade away. Specifically, resources need to be heavily allocated to the first three stages of the OODA Loop during difficult times, since achieving clarity and forming and evaluating viable options are the key to breaking through the paralysis so typical of times like the present. And, as demonstrated above, designers have many processes perfectly honed to addressing these early stages.
With a flexible design methodology, one goal at a time can be knocked off the executive’s to-do list, with time in-between for overall situation reassessment. This enables the business to measure its risk of moving forward—or not—each step of the way. Moreover, this approach further enhances risk management, since the cost of satisfying each goal can be forecasted with more accuracy than that of the entire innovation process when the goals are aggregated. Also note that, depending on the circumstances, the client-designer relationship does not need to follow the sequential path articulated in the table above. With a clearly stated opportunity or problem, the designers may be able to jump into product refinement quickly, depending on the magnitude of the changes required and the work already performed by the client.
Interaction design is a valuable user- and customer-focused resource that can be deployed flexibly, at any time in the decision-making process. During uncertain times, attacking specific business goals with an appropriate design process enables organizations to keep innovating, one step at a time.