This concept was born out of experience in the MW4 leagues. The workload of commanding was immense and required extensive experience to be comfortable with, something that can only be gained with months and months of practice. One of the most basic tasks of command was simply moving the force around the map without the group scattering all over the place and becoming ineffective as a combat unit. While it sounds easy, it turned out not to be as everyone tended to make their own path with terrain and obstacles working to break up group cohesion as well. Once combat was joined the difficulties increased exponentially as each player tried to maneuver for shots or protection from fire. It was not uncommon to see an organized force completely fall apart within seconds of joining battle due to the commander losing the ability to both fight and hold his force together.
This instrument indicates the direction of movement for each Mech in the company. It keeps the commander aware of how his force is maneuvering, if they are all holding steady with the group or whether they are disintegrating. This is extremely important to know, new orders can only be issued if the force is capable of following them. If that force has lost cohesion, additional orders will only further weaken the company as some Mechs try to respond while others get further and further out of position. Thus it is vital that the commander can see the state of his company before he issues each new order in combat.
This shows a company in chaos. The Mechs have scattered off the commanders heading (blue line) and are now effectively fighting as individuals.

This is what it should look like when everything is going right. The company is moving together on the correct heading except for one Mech which has broken loose and needs to be called back. Such deviations are immediately obvious to the commander.

Here it is in place on the HUD. With just a glance the commander can determine the state of his company without having to take his eyes off the enemy.
