He Who Makes Decisions Fastest, Wins!
Despite having studied the United States Air Force since the age of four, I was on the downside of my twenties before I ran across the name Colonel John Boyd. You probably have never heard of him either. Despite his relative obscurity, the man was the greatest contributor to the academia of warfare since Von Clausewitz.
The reason I had never heard of Colonel Boyd was because the man was an iconoclast. He was a cowboy in a culture that valued conformity. He was also highly intelligent and his ideas about fighter design sat at the center of the principles espoused by the fighter mafia, a group of defense professionals in the ‘70s that brought you such hits at the F-14, F-15, F-16, and F/A-18.
Alas, despite his towering intellect, Colonel Boyd was shunned by the Air Force for his abrasive leadership style. He never rose above the rank of Colonel and retired in ’75. He continued to work as a defense consultant and is largely credited with developing the plan for the invasion of Iraq during Desert Storm. Ironically, because of his contributions to the ground war, Colonel Boyd, an Air Force Officer, was adopted by the Marine Corps. It was not until after his death that the Air Force began to recognize his brilliance and pass along his knowledge and ideas to cadets at the Air Force Academy.
At this point, you are probably wondering what any of this has to do with data. Colonel Boyd left us in 1997. He left behind a body of work that is still studied today. One of those concepts is the OODA loop (pronounced like it is spelled).
OODA: Observe, orient, decide, act. At the top of this page is a rudimentary OODA loop. At its core, the OODA loop is a model for decision-making. It was developed to teach fighter pilots how to kill other fighter pilots, but, like so many things martial, it is easily adaptable to the competitive nature of the business world. Figure 1 illustrates a more complex OODA loop.
The name of the game is to rapidly iterate over your decision-making process. In military parlance, you want to get inside your opponent's decision cycle and shorten the kill chain. In the business world, substitute "kill chain" with "sales chain". The sales chain is the series of events from first customer contact to converting that contact to a revenue-generating event. A car sales chain could go something like this:
1. Customer steps on lot.
2. Salesperson makes initial contact with customer.
3. Salesperson builds rapport with customer with small talk.
4. Salesperson gently qualifies customer.
5. Salesperson identifies customer needs and matches to vehicle.
6. Salesperson offers and executes test drive.
7. Salesperson performs soft close and offers to start the financing process.
8. Financing is completed.
9. Ownership paperwork is started and completed.
10. Car prepped to exact customer specifications.
11. Car delivered to customer. Approximate time to complete the sales chain: 5 hours.
This is, of course, an incredibly simplified version of a car sales chain. In the real world, the actual chain is much more complex comprised of many more steps, with some of those steps branching much like the story line in modern video games where the outcome depends on choices made by the player.
The important thing is this: the customer could exit this sales chain at ANY point. It is the salesperson's job to keep them in the pipeline. They do that by getting their decision cycle inside the customer's decision cycle. As the sales chain progresses, the salesperson is constantly making decisions to head off customer objections and get to a yes. If the salesperson cannot stay on the customer's six (fighter pilot parlance for staying in optimal position to take a shot), the customer will exit the process and time will have been wasted.
This is how cars have been sold probably since the days of the Ford Model T. Picture this: Here is the process for the 21st Century.
1. Customer steps on lot.
2. Customer’s face is scanned with facial recognition software. Customer is recognized.
3. Within one minute, a profile of the customer has been generated. Profile includes current address, employer, predicted salary, credit score, marital status, personality profile, car ownership history.
4. Within the next minute, a salesperson receives a phone alert and is asked to meet the customer. The system analyzes the customer personality and selects a salesperson with a complementary disposition. The alert includes the customer's profile.
5. Salesperson greets customer and begins to build rapport, which is easy because the salesperson already knows that the customer has a nice house, in a nice neighborhood, a wife, a Golden Retriever, and two daughters that attend Smith College.
6. The system predicted the type of car the customer would be interested in and handed the salesperson the key on the way out. No need to go back inside for a test drive.
7. While on the test drive, the system prepares all paperwork.
8. Upon return, the salesperson closes the sale. The customer signs all paperwork, and the key is handed over. Approximate time to complete the sales chain: 45 minutes.
Now imagine two car lots across the street from one another. One sells cars the old way; the other sells cars the new way. Which do you think is going to stay in business?
Does this sound like science fiction? The technology currently exists to do everything I just outlined. If I thought of it, I guarantee there is some college kid somewhere coding it up right now.
The concept of shortening the sales chain by rapid decision iteration directly relates to the increasing importance of adaptability in today's business environment. Those who make decisions fastest and can respond to a rapidly changing competitive environment will win.