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Conversations about the media economy, and how to think clearly when things get messy.
This is Puzzle, Problem, Mess, conversations about the media economy and How to Think Clearly When Things Get Messy. The thrust of this episode is that media companies often do see disruption coming ahead of time. Yet the struggle seems to be in orienting themselves to what that disruption means, deciding what course of action to take, and then doing it together in a quick enough time. When media companies can't manage this and they lose the initiative, it's often actually not because they lack strategy. More often, it's because their culture can't move at the tempo of the change happening around them.
Dan Fahy:There's a concept that describes this problem uncannily well. It's the OODA loop. Once you understand it, you start to see it everywhere in the media economy. The concept of the OODA loop was developed by military strategist and US Air Force colonel John Boyd. And for this episode, I've been extremely fortunate to be able to speak with Chet Richards, who was a longtime associate of John Boyd.
Dan Fahy:But before we get to Chet, you need to hear a bit more about the OODA loop concept. Jocko Willink, a retired United States Navy officer who served in the Navy SEALs and is a former member of SEAL Team three, has explained it well on his podcast. Here's Jocko.
Jocko Willink:Conflict can be seen as time competitive observation, orientation, decision, action cycles. Each party to a conflict begins by observing. He observes himself, his physical surroundings, and his enemy. On the basis of his observation, he orients, that is to say he makes a mental image or snapshot of his situation. On the basis of this orientation, he makes a decision.
Jocko Willink:He puts the decision into effect, I e, he acts. Then because he assumes his action has changed the situation, he observes again and starts the process anew. His actions follow a cycle, sometimes called the Boyd's cycle or OODA loop. And OODA's o o d a, and that's observe, orient, decide, and act. If one side in a conflict can consistently go through the Boyd cycle faster than the other, it gains a tremendous advantage.
Jocko Willink:By the time the slower side acts, the faster side is doing something different from what he observed, and his action is inappropriate. With each cycle, the slower party's action is inappropriately... Is inappropriate by a larger time margin. Even though he desperately strives to do something that will work, each action is less useful than its predecessor. He falls further and further behind.
Jocko Willink:Ultimately, he ceases to be effective.
Dan Fahy:That was Jocko Willink. Now the obvious question here is, what's this got to do with business? And more obviously, the business of media. Well, the link between the OODA loop and business is that the great disruptive companies of our times, for example, Toyota in the eighties, Apple for the twenty years from 2000, and Elon Musk's companies today, can all be understood through UDA like principles. They're faster at sensing consumer, market, or technology opportunities.
Dan Fahy:They have a very strong external orientation. They have shorter learning cycles. They tend towards decentralized action. And above all else, they set the agenda for the companies in their category. In media, arguably Netflix and YouTube can be seen in a similar light, leveraging OODA like principles to force whole segments of the media economy onto the back foot, forcing them into reactive actions.
Dan Fahy:Now in this episode, I don't really spend any time on the OODA loop itself. I'm more interested in what it takes for media companies to develop these OODA like traits, and that's where Chet comes in. Chet's book, Certain to Win, is a perspective changing book. Chet and I focus on two topics, time and orientation. Time, because as you heard and will hear, time is a critical strategic and competitive instrument.
Dan Fahy:And orientation, because orientation is the engine room of the OODA concept. A company's ability to constantly orient itself amid the consumer and market forces swirling around it affects its ability to decide and act effectively. Here's Chet Richards. Chet Richards, thank you very much for joining the podcast today.
Chet Richards:Oh, thank you for having me, Dan.
Dan Fahy:Why don't we start with the notion of time and time as a principal strategic device? Because this is something that you've written extensively about, and I think it's very, very relevant and familiar to people in media today.
Chet Richards:It's a very interesting concept. Boyd's whole idea of operating inside the loop is you do things to the other side, and you exploit those things before the other side mentally can wrap their head around it, not before the other side can respond necessarily, before they can even understand it. So you use time itself and in manipulating time and making things happen when the other side doesn't expect or in places that he may expect it. But at times they don't expect, it takes them time to figure out what it is that you did. And in that gap of time, you have the opportunity to act.
Chet Richards:And when they see you act, they've got to try to reorient themselves to what you're doing now. But in the meantime, you can do something else. So this game can be played and has been played again in military over and over and over again. There have been attacks that succeeded because they broke down. When they broke down, the other side got confused, couldn't figure out what was happening.
Chet Richards:And while that was going on, one very low level person saw an opportunity and seized it and did something that broke the whole line open. Very, very common in the military where your formal plan breaks down. But people, by being able to understand this before the other side does and being able to use the initiative, it was a wonderful word, to exploit this before the other side can figure it out. So Boyd got to thinking, These attacks succeeded because they broke down, but they succeeded because when they broke down, one side was able to figure out what was going on and exploit it before the other side did. And so that's the fundamental of the military use of time.
Chet Richards:And Boyd says, select the initiative that is the least expected. Interesting. That's an interesting point there because most military training and virtually all monks would select the response that they predict would be the most effective. Boyd is saying don't do that. Why?
Chet Richards:Well, if your model says this is probably the most effective thing to do, probably the other side can figure that out too. If it's the one that's least expected, now the enemy's gotta stop and figure out what's going on. And while he's trying to figure out what's going on, confusion and ambiguity builds up. You have the opportunity to do something and so on and so on. That's what this notion of seizing the initiative, operating as the idea of the loop does in the military.
Chet Richards:Now virtually none of that applies to business. You're not trying to generate uncertainty, confusing, panace, and chaos. As a general rule, trying to come up with products and services that customers will actually wanna buy at a high enough price to make it worth your while to do it. What's the purpose of time that... How does time affect business competition?
Chet Richards:Well, the first thing you might think is, well, the first mover advantage. The first person out with a product or service has a... Has an advantage. Unfortunately, as far as I can tell, there's very, very little data to support that. K?
Chet Richards:Sometimes the first thing out is a big flop or doesn't work very well. Somebody who is watching from the sidelines can see it and come out with a better example later. And so you say, well... But, yeah, there's still got to be something to do with time. Compared to the military, business competition, it looks to us with the military background, it just moves in hideous slow motion.
Chet Richards:It takes months, years to do anything. And we're thinking in terms of engagements and battles and things where fractions of a of a second may be decisively. Grounds start coming in. What do you do? You don't have time to hold a meeting and and hold a council of war and vote.
Chet Richards:You gotta go with what you have immediately. So much in military training is coming up with that set of responses of actions, put Boyd call your implicit repertoire, that you can implement immediately as a group with minimum friction in order to accomplish the purpose of what you're trying to exploit an opportunity, dodge enemy fire, whatever it is. But very, very little in business obeys that model. Typically, it probably make too much difference whether we bring out our new product in six months or eight months or a year. What really makes a difference is that when it comes out, how does it stack up to what the competition is offering?
Chet Richards:The customer is gonna look at our stuff and gonna look at the competition stuff, gonna look at the option of buying nothing at all, keeping what he's got, and gonna make a decision. So much of what I advise business organizations is basically profound knowledge is outside your company. It's point number one. Everything else follows from that because it doesn't make any difference what goes on inside the company if you're... If the customer doesn't buy a product or service.
Chet Richards:So it's a 100% waste at that point.
Dan Fahy:A big focus of Chet's thinking is around the military concept of initiative. In military terms, initiative can be understood as the ability to shape the course of events so that the opponent is forced to respond to your moves on your timing and under conditions that favor you. In a business setting, initiative is the ability of a company to shape the market, the customer expectation or the competitive space so that others are responding to its movement rather than it merely reacting to theirs. What I find striking about Chet's writing on this topic is that initiative is not so much a product of strategy rather it's a product of culture. He writes that initiative is a product of orientation, time, and crucially, organizational trust.
Dan Fahy:Here's Chet. You've written extensively and cataloged a number of examples where the use of time and the maintenance or the recovery of initiative comes down to culture, not capacity or not capability. Do you want to talk a little bit more about that?
Chet Richards:Initiative is absolutely critical. It allows you to generate this uncertainty, confusion and chaos and exploit it while the opportunity is still there. It allows you to operate on the other side. It's just a wonderful, wonderful tool in war type conflicts. And by that, I mean not just war, but anything where you have a versus b, and it's zero sum.
Chet Richards:Only one side can come away. Anything one side wins, the other side loses. That's conflict. Business is conflict in a very real sense in that if, for example, for... If a customer buys my product, he's not spending that money buying your product.
Chet Richards:So I'm stealing at least that part of your business away. So it has that zero sum element to it. What's different, of course, is that you can do anything that you want to your competitor. But if the customer buys his product or service anyway, it's a completely different sort of thing. So when you're this through...
Chet Richards:And I talked with John actually a lot about this from about nineteen eighty seven, eighty eight when I first started doing this until he started really winding down in '96. And, of course, he died March ninety seven. And what we figured was the real thing that makes initiative work, why it can have this this effect that it has is... And he borrowed from Lawrence of Arabia on this. Somehow you got inside the other guy's mind.
Chet Richards:And he said, think about in... Let's go back to the military, for example. The other side has a command post. He's got this map laid out on the ground. There's a little toy tanks, toy artillery, and he's moving stuff around on it and all of that.
Chet Richards:And they're making decisions about where they're going. Let's suppose that you somehow or another were fly on that wall or a GoPro camera on that wall undetected, and you're watching all this going on. You watch what he's doing. You'd have no problems. You shouldn't have.
Chet Richards:Hey. There are cases where the other side got their opponents battle plans and still managed to screw it up. McClellan and Antietam in the US Civil War being a classic case of that. But the basic idea is if you could be sitting watching him make his decisions, you'd have a huge advantage. Well, you may not be able to do that, but by understanding the enemy really, really well, you can have a lot of the same effects.
Chet Richards:And that is finally the answer to your question. The way that you generate initiative in any organization, business or otherwise, and it follows all down to the top right hand side of loop stuff, is what he called a similar implicit orientation. And all that means is that basically everybody in your in your organization to some extent or another is singing from the same sheet of music. They're singing different notes. They're singing in harmony, but they all have a common general understanding of what's going on outside the company in particular, and maybe to a lesser extent what's going on inside.
Chet Richards:But this is really for understanding what's going on outside. They understand where the company is in trouble. They understand where it's it's got opportunities. And that level of understanding about your customer is what we're driving at. The more that you understand the outside world, the more you'll be able to take the initiative, operate inside your customers' illusion.
Dan Fahy:If you're on the wrong side of initiative, things can quickly go from bad to worse. Let's listen to another passage from Jocko Willink.
Jocko Willink:The Boyd theory defines what is meant by the word maneuver in the term maneuver warfare. Maneuver means Boyd cycling. Boyd cycling the enemy, being consistently faster through however many OODA loops it takes until the enemy loses its cohesion, until he can no longer fight as an effective organized force. Sometimes a Boyd cycled enemy panics or becomes passive. This is an ideal outcome for the victor because a panicked passive enemy can be annihilated or captured at the lowest cost in friendly casualties.
Jocko Willink:At other times, the outmaneuvered enemy may continue to fight as individuals or small units. But because he can no longer act effectively as a force, he is comparatively easy to destroy.
Dan Fahy:Now the passage from Jockell is clearly grounded in a military context and language, to be sure. But within the media industries, there's a more benign but nonetheless pernicious version of this at play. And that is that when a media organization loses the initiative, it becomes reactive. It spends its energy responding to someone else's tempo. And for a company that's losing the initiative, you might well point to a failure of strategy, capacity, or capability.
Dan Fahy:But work is clear. It's more likely a failure of culture. Chet points to five organizational and cultural traits that together create the conditions for a company to seize and maintain initiative. The first one is mutual trust and unity. The second one is what Chet refers to as fingertip feeling or intuitive feel.
Dan Fahy:The third one is that there is a main effort or a focal point for activity. The fourth one, Chet talks about a mission type command. And fifth is a state of mental agility. Of note, this last one, Chet sees as the output of one to four. If you have those, you produce organizational agility.
Dan Fahy:Here's Chet on the cultural ingredients for initiative. You've written in your book extensively in one of one of the chapters that cultural traits like mutual trust, the ability to
Chet Richards:Boyd listed.
Dan Fahy:Cope with
Chet Richards:Boyd Yeah. Right. Boyd listed five of them, as you know. And he used the German words because it was the Germans that first codified this this fine height. Ein in German means one.
Chet Richards:Heit mean... Roughly translates as n e s s in English. So oneness, unity. It's a German word for a unit, a military unit, for example. But it has the connotation here of mutual trust is how Boyd typically translated it.
Chet Richards:Einhite is sort of the boundary around us. It separates us from them. People you have Einhite with is your group. And what trust does, of course, is it greatly speeds things up. You don't do a lot of have to do a lot of checking, a lot of hedging.
Chet Richards:If somebody says something, you believe them. If somebody says they're going to do something, you believe that they're going to do it. And if and if they can't do it, they'll either die in the attempt or as soon as it becomes clear that they can't do it, they'll communicate with you so that so that your picture, your orientation matches their orientation. You have a common orientation about what's really going on in the world. So it's almost impossible to overstate the role of trust.
Chet Richards:If you go back and look at Sun Tzu again, chapter one of Sun Tzu, the very second verse, he lists these things on these five... He has has the same list in three different places. And basically, very first one is trust. He calls it the way, which side has the way. But if you look at the commentators down there explaining what the way is, we would translate it as Einhite mutual trust.
Chet Richards:Fundamental. Without it, don't even bother to go on. You'll never get anything done. People will spend all their time playing politics and arguing and trying to upstage each other and all that, which is fine if you have no competition. But once the level of competition heats up and you've gotta turn out products and services that people actually want, that's when the the need for mutual trust becomes fundamental.
Chet Richards:Alright. That's the first argument. Given that we all trust each other. And the second thing is... And oddly enough, it goes along with the first, and that's fingers fits in your food.
Chet Richards:Fingers fits in your fingertip feeling in German, but it literally means that intuitive sense to where everybody is so good at what they do that most of the time they don't have to stop and think about it. They can handle unexpected things in a smooth way. You see them and as they're doing it, your mental models are making a prediction. And based on that prediction, then you do something. And it had to be about that quick.
Chet Richards:The human brain is capable of operating incredibly quickly. That's what Boyd called fingers fits in your fool. So you have this perception of the outside world. You're making your mental models and making predictions, and your fingers fits in the fool knows what to do the vast majority of the time. Now everybody in your organization has to have fingers fits and control for what it is they're doing, the president all the way down to the the people working on the factory floor and everybody in between.
Chet Richards:And what that does is that builds pride. That builds the basis for mutual trust. I'm really good at what I do. You're really good at what you do. And that builds a basis for self respect, which is the basis for mutual trust.
Chet Richards:Cannot be overstated enough, just like mutual trust. All right. Now, given that we're all really good at what we do and we all trust each other, what are we going to do? Well, that's where the next one comes in. Scherpunk.
Chet Richards:Scherpunk, hard point literally or difficult point. Clausewitz translate... Most translations of Clausewitz... I don't think Clausewitz spoke in English. I don't think there's any indication that he did.
Chet Richards:And even if he did, he wrote in German. It's usually translated as, when I say, center of gravity. But what Boyd... How Boyd used it and how maneuver warfare now uses it today is stop back and think of what it is you're trying to do. What are you trying to accomplish?
Chet Richards:What is it that when you accomplish it, you'll feel like you've actually done something? In that sense, it's kind of hard to explain. But in the military, it's fairly easy. You have an operation. It doesn't have to be where most of the force is.
Chet Richards:The next one is they were, how do you make a sherpunk pen quirk? You want lots of intelligence and creativity working together. There's that einheit again, the commoner, very quickly to solve the customer's problems. And that's where Aufkraub's Tactique comes in. Literally, in German, an Auf Traube is a contract, but the connotation of it is that senior people set what is to be done and they devolve everything everything else down into the organization while keeping their fingers fits and get full, their fingers on the pulse of what's happening in the organization.
Chet Richards:In other words, it's not just enough to call people and say, okay, we got them getting merged and what you do, this, this and this, and then go back to sleep. Some of this stuff's gonna work, some of it's not. You've got to give the mission, which a mission is how it's typically translated into English, give the mission to your team, but also be able to sense that your finger and give through how your team is doing, how your team is on. So you got one set of fingers on the team, another set of fingers figuring what's going on out in the outside world. And through your fingers fits a good fool, you bring it all together.
Chet Richards:Very difficult, but that's why CEOs are in the big bucks. So there's there's the four things that that said, I high mutual shows, being really good at what you're doing throughout the organization. Share punk, being able to say, okay, what out of all this in combination is really, really the important things that we're trying to... And it can be more than one in business with the caveat that as long as they don't trade off.
Dan Fahy:Listening to Chet, we end up some distance from a sterile reading of the OODA loop as a decision making framework. We end up instead in the realm of culture and ambition. The implication is that a media company doesn't need to be the biggest player in the market to recover initiative, but it does need to work relentlessly at external orientation up and down the organization. And it needs a culture of mutual trust, intuitive feel, a clear mission, and empowered leadership right down the organization. Here's Chet to wrap it up.
Chet Richards:The final piece of it now is to be able to do all of this stuff. And here's time coming back to you and what Boyd call in a terms of a mental agility behind the kite. I was being able to do all this good stuff while there's still an opportunity do it. So we say there is no first mover advantage, but if the first mover comes out, learns from it, and comes out with the second one while you're still trying to react to his first one, now you may have a problem. So it's not so much the first mover experience, it's the first learner experience.
Chet Richards:And with the OODA loop, they observe, then orient, then decide that is a model of learning. And in businesses, learning is really what it's all about. You have the implicit guidance and control links going out, and that's very important in a military type conflict. But in business,
Dan Fahy:it's
Chet Richards:much more subtle. The implicit guidance and control is is sort of invisible. It's that alfalfrac tactic inside the company. What's really important is that the company constantly is learning at a fast enough rate so that it has a better picture of what's going on in the exercise making their their sort of corporate common implicit orientation, that orientation, which is a mental model, is making better predictions of what's gonna happen than your competitors or even your customers for that matter. If you're the one creating the future, it's much easier to predict.
Dan Fahy:Thank Thank you so much. This has been a very rich conversation on the topic of initiative and culture as it relates to time. So thank you very much, Chet.
Chet Richards:Thank you, Dan. We'll talk to you later.
Dan Fahy:That was Chet Richards with a challenge that may be uncomfortable for media companies. The problem isn't always whether change can be seen. The harder problem is whether an organization can orient, decide, and act quickly enough together to meet the change. Once internal tempo falls behind external tempo the company becomes reactive. Initiative can be recovered but not by strategy alone.
Dan Fahy:It requires culture, trust, feel, focus, mission, and learning speed. Thanks for listening. I'm Dan Faye. Original music by Lee Rosevere and SoCal. And if you like this episode, please share with a friend or colleague.