Add OODA Loop to your mediation strategy

Live television interviews sometimes fly in the face of strategic politics. In responding and reacting to the most recent public insult or accusation, the candidates ignore the lessons known to military strategists as "OODA Loop."

The phrase "OODA Loop" refers to the decision cycle of observe, orient, decide and act. Military strategist United States Air Force Colonel John Boyd first recognized that the more agile the response to military opponents, the more likely their success. This flies in the face of the intuitive sense that raw power always wins. To the contrary, Colonel Boyd understood that rapid developments of an emerging military situation still call for taking the time to process unfolding circumstances, take in outside information, formulate a strategic decision quickly, and then take action with an immediate view to repeating the loop by observing the reaction to that action and adjusting accordingly.

In litigation and particularly in negotiation or mediation the concept can be applied to every aspect that requires decision-making. For example, in a wrongful termination matter in which the damages are limited to $25,000 lost earnings because the plaintiff found a better paying job soon after her termination, if the initial demand is $1.2 million, there is a temptation for the defendant to offer something akin to nuisance value, even if the liability is strongly in favor of the plaintiff. That kind of "reaction" omits the important steps of observing and orienting before decision and action are taken.

Instead, the strategic negotiator might attempt to "get inside" his opponent's decision cycle by offering 100 percent of the lost earnings in order to observe the interacting loops that will follow. That negotiation may evolve into a filtering of the raw information presented about the lost damages and liability, into a consideration of what a jury of peers may award beyond the actual losses, based upon experience and other data offered by each side of the lawsuit.

Once the bravado of proving liability and 100 percent damages is taken away by an offer in the amount of actual lost earnings, the plaintiff and her counsel will have to adjust and react to that offer, recalibrating, re-evaluating and making a counter-offer that reflects that new information. In this example, that might be something under $1 million, accounting for the not unlikely scenario that the jury would have compassion and award both emotional distress damages and punitive damages.

In this scenario, the "agile" defendant might bounce the offer to reflect actual attorney fees earned by the date of the mediation hearing, or an additional $25,000 (doubling their offer to $50,000). Again, this would call for the plaintiff to enter into another "OODA Loop" analysis. She now knows that the employer is prepared to pay for liability, lost earnings and attorney fees. In order to "react" to this move, she may need to generate some confusion or concern for the unknown by her adversary. One way to do that would be to show the likelihood of a second phase, or punitive damage phase of this matter, based upon the attorneys' past experience, or to show actual mental health issues which defendant may not have considered.

The defense may then have to re-calibrate and re-consider its willingness to take those risks. At that moment, the analysis may shift to the energies and expenses which they can expect to incur in order to defeat their adversary on these elements of damages and how likely they are to succeed. Again, the OODA Loop may serve to bridge the gap as each side feeds upon the other in the decision-making.

When you are successful at making the other side's result appear ambiguous or unpredictable, that disorder or confusion can give you a strategic advantage. The key, according to one of Boyd's colleagues, Harry Hillaker, is to obscure your own intentions and make them unpredictable, while simultaneously clarifying the intentions of your adversary. This faster tempo and rhythm of decision-making and reaction to the other may successfully cause the other to under-react to the moves which appear to be incomprehensible.

In mediation, the parties and their attorneys are given an opportunity to get the information they need either directly or through the mediator (observe) and to consider what that means to them and what they want to do in response (orient). Writer Robert Greene wrote in an article titled "OODA and You" that: "[T]he proper mindset is to let go a little, to allow some of the chaos to become part of his mental system, and to use it to his advantage by simply creating more chaos and confusion for the opponent. He funnels the inevitable chaos of the battlefield in the direction of the enemy."

In the context of negotiation of a litigated case, timing can be critical. Once the exchange of numbers begins, the parties engage in a decision loop or cycle that is often a quid pro quo, or an even exchange towards a reasonable mid-point. However, by consciously thinking and acting faster than the opponent can think or act, this cycle can be successfully short-circuited, producing opportunities for gaining tactical advantages.

The key is to take control of the situation, rather than simply react and respond to the other's moves. If you are merely reacting to the other side's moves, you may get unnecessarily stuck in the decision-cycle and hit an artificial impasse.

In today's election season, our potential leaders might do well to take a page from military strategists and carefully observe, orient, decide and then act before responding to difficult questions via social media. There are advantages to taking a pause to observe the evolving situation being addressed before deciding how to act and react.

Jan Frankel Schau is a full-time neutral with ADR Services Inc. in Los Angeles. You can reach her at www.schaumediation.com or (310) 201-0010.