When I first moved to Dubai, I was goggle-eyed at the luxury brands on display. Okay, I was spending most of my time in DIFC, the epicenter of bling. However, every lady seemed to have a Hermes (bag and sandals), multiple Cartier love bracelets.. and the heels! Christian Louboutin heels everywhere!
As any man, who can wear a suit several days in a row and just change his shirt and tie, the sheer volume of all these peak luxury items seemed extraordinary to me (and this is from someone who moved here from Singapore, hardly a ‘who cares’ fashion culture).
I was working with a client who at every meeting seemed to have yet another Hermes bag illuminating her presence, perched on the table between us.
Of course, after several such meetings, I had to tell her I was impressed by her collection of bags and her reaction was not what I expected.
She quietly (we were in the Capital Club at the time) admitted to me that they were all ‘Karama specials’. Not knowing what this was, she proceeded to change my perspective on all the logos that had blinded me in the previous few weeks. Dubai didn’t look so glow-up anymore.
When I began working with my first luxury brand, it occurred to me that maybe I should go do some ‘research’ in Karama. Seeing the endless lines of bags squeezed together really raised the eyebrows. There were several tourists whose faces shone with the dreams of their inner Princess.. One said to another, “My life is going to change!”. I’m sure she imagined ‘entering the room’ with the new bags she was clutching, and how this would empower her to a new social life, a new network, and new opportunities.
What intrigued me as a strategist was that the gentleman who ran the place had no brand loyalties, he just wanted to sell. He directly told me why each item sold and what their customers are looking for. Every answer was cross brand, something we never get when we walk into a Chanel boutique.
Although the tourist may return home and find these items unique in their town, giving them a cachet, maybe even a social ‘advantage ‘, what is happening in Dubai where anyone can have a Chanel classic flap, Hermes sandals, or Cartier love bracelets? What makes us unique?
The Karama gentleman put it succinctly “They all want to buy the recognized winners “.
I can’t help but think that in a world in which AI is available to everyone, what is making my thinking, my presentation, and my strategy unique? What will give me an advantage?
For this, I need to turn to where many men and our inner boys like to spend our dreams: in military history, heroes, and war games! Please go to your favourite AI and ask about OODA Loop and PESTEL analysis.
In the 1960s a US Air Force pilot, John Boyd, realised that strategy creation does not take into account adversaries who are also looking to gain advantage over you. Too often the strategies that we create are static. That is, we ‘decide’ what is our competitive advantage and stick to it. The problem is this is often used to mean ‘anything we think we’re good at.’ (Joan Magretta, HBR).
He developed a four-step decision-making process in order to strategize to find competitive advantage in the short term. His work became known as the OODA loop.
The 4 steps are
- Observe: Collect data from your working environment.
- Orientate: Analyze and filter everything you collect using your personal perspectives, personal experiences, and skill set to understand what it all means.
- Decide: Specifically select a course of action based on your orientation
- Act: Execute your chosen decision.
Note, this is an ongoing loop not a one-time choice. It only works if you constantly feed new information back into the observation phase. Now, considering your competition is trying to beat you, your speed & tempo is critical. That is, moving through the cycle faster allows you to get inside their decision-making process creating confusion and chaos in their thinking. They simply won’t be able to keep up. Secondly, the most critical part of the Loop is orientation. You must be very aware of your mental biases and the models by which you make sense of your environment and the competitive situation that you are in. Your self-awareness must be greater than your competition’s.
What has proven useful with the OODA loop is using it to understand the thinking of a client or your boss. What have they observed that is making them go in the direction they have chosen? What personal biases and models do they have that is causing them to orientate on the same information that everyone else has? And what courses of action have they dispensed with which perhaps were dispensed too quickly?
The OODA Loop is a fantastic way to create and maintain competitive advantage in the short term in which everyone has the same information through AI but will observe and orientate that information in a totally different way. But what about the long-term?
For years the big 4 consultancies provided a PESTEL analysis to government strategists to explain future scenarios that will affect their competitive positioning. PESTEL stands for political, economic, social, technological, environmental, and legal. Entire teams of analysts would research these areas and provide a dense report to strategy leaders. However, with AI, you can now prepare these reports for yourself. In my experience, I strongly recommend only using Perplexity as it is clear as to the sources from which it has gathered its research. Go to Perplexity and ask it to create a PESTEL report for the next 3 to 5 years in your business area and be sure to ask it to include ‘weak signals’. The latter is the kind of emerging issues or opportunities that do not present themselves on the front page of the FT, but you should know about before your competition and take advantage of them.
The OODA Loop and PESTEL take advantage of AI combined with your wisdom. You are not just asking for the same answers as your competitors but dynamically working against them.
See you in 2 weeks!
(Anand Vengurlekar is an award-winning Senior Lecturer in Innovation and Design Thinking at INSEAD, Bayes Business School, IE/FT, PWC, Korn Ferry, and others. He focuses on mentoring individuals and teams to be more innovative under stressful circumstances and high-pressure deadlines.)
