One Loop or Two?

I've written previously about the effective application of the OODA loop to legal operations, and also where it doesn't apply. While it is a very useful tool in the right context, it is insufficient without being an embedded component in a learning system like Peter Senge's Fifth Discipline model, and managed in combination with other learning loop methods, like the PDCA loop for well-known, routine work.

Senge's book, The Fifth Discipline, describes how organizations need to embrace a new way of thinking called "systems thinking" in order to become true "learning organizations" that can continuously adapt and thrive in a rapidly changing world. 

I don't think there is any doubt we are living in a rapidly changing world. Perhaps you could argue whether the rate of change has been relatively constant over time, or whether it is accelerating, but I think it's safe to say we all feel the level of change in business quite viscerally either way. (I was fortunate enough to have a Twitter debate with Roger Martin over this many years ago where he graciously disagreed without completely demoralizing me. Pt I, Pt II)

According to PwC UK's 2024 CEO Survey, a significant number of CEOs are concerned about the long-term viability of their enterprises if they do not undergo substantial transformation:

• 59% of UK CEOs believe their organization will not be economically viable within 10 years if it continues on its current path.
• This figure is higher than the global average of 45% of CEOs who doubt their company's viability beyond the next decade if they stay on their current trajectory.

The survey highlights that CEOs recognize the need for reinvention and strategic change to ensure their businesses remain viable in the long run. Many are taking steps such as appointing dedicated transformation leaders (21%), creating transformation teams (35%), reallocating capital to transformation projects (38%), and raising additional funding for transformation initiatives (24%).

While "transformation" may be the jargon monoxide du jour, and aimed at attracting higher salaries for it's managers, it rests on boring old learning and adaptation like that described in Senge's 1990 masterwork.

So what's the implication for Corporate Legal? If the CEO is saying, "we need to adapt!" then Legal is as important (or more) than any other function in the organization when it comes to making that change happen. 

“Prediction is very difficult, especially if it’s about the future.” - Neils Bohr

As such, Legal needs to build their own learn and adapt capabilities. No, you're not going to be able to predict the future. You're going to be better off just trying to avoid stupidity rather than trying to be intelligently misguided. There are very sound tools and approaches to rely on, so before you go and pull the "Legal is a snowflake" card, have a look around for proven approaches to learning and adaptation in functions that are similar (yes they are not exactly the same).

The value in using multiple learning loop approaches within the larger "Systems Thinking" model for learning and adaptation that Senge proposes, is that you can't just focus on the next bright shiny object (hello AI) using the OODA Loop, because you still have to advise people on the business of today, and crank out the documents required to protect and grow the business of today using a PDCA Loop. 

Operational agility and effectiveness don't have to be mutually exclusive, but they rarely get equal attention in Legal. I'll look at that in my next post.

As always, I'm happy to get feedback that will help improve my learning or understanding of the subject. I suffer from confirmation bias as much as the next person.

"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." - John Kenneth Galbraith