What Is Business War Gaming?
Episode 2: War Gaming
In this episode we dive into what David describes as an important strategic tool that provides an experiential, human based, intelligence-driven activity that involves behaviored model role playing.
LISTEN TO PROACTIVE'S EPISODE #2 ON BUSINESS WAR GAMES
WHAT IS WAR GAMING?
Just think of the words role playing. We're able to really better understand the competitors’ mindsets so that you can pressure test your own strategies, or in some cases create new strategies. War gaming helps you anticipate likely moves and develop countermoves. War games are about having a structured framework to be able to assess the beliefs and the assumptions of the overall business environment. Including potentially governmental regulation, supplier issues, customer factors, and other industry movements to help identify blind spots inside your organization so that you're engaged in a workshop that allows you to think about how do we outmaneuver our competition.
Is there a different name than war gaming?
War games can also be called scrimmages. Especially if it's a smaller scale type of engagement that takes less than a whole day, or maybe it's a single competitor and a specific issue that you're looking at.
Another phrase might be scenario planning. There are certainly some different approaches involved in scenario planning and in creating scenarios than what a war game involves but some organizations may describe war games this way.
What isn't war gaming?
War gaming is not about a detailed analysis. It's not doing a rigorous assessment at a granular level of the environment. It's not a quantitative assessment. War gaming is a very qualitative, strategic level of interaction that takes place. That doesn't mean there isn't quantitative data you use as part of the exercise or the workshop but the data is not the focus. It's also definitely not a computer simulation. And finally, it's not dull and boring. War Games are super engaging, exciting, energetic, and always result in actionable outcomes if done right.
Examples of business applications from a War Game
There's two types of applications. There are strategic situations and tactical situations.
Strategic situations can involve things such as market disruption, big regulatory changes, competitor business model shifts, market entry concerns as new entrants coming into your space, or you're looking to enter into a new space. Looking at scenario testing: ‘Before we hit the enter button, let's better understand to see if we even have the right strategy in place.’ Other strategic situations might involve looking at merger and acquisition, value proposition creation, and things like a customer experience and digital strategy. Those are all types of strategic situations a company might be facing where playing out a war game can help better inform investment decisions.
Tactical situations can be things such as a very specific product launch you're planning to enter a market, or region, or with a new category and you want to understand how the competitors will respond. Sales adjustments that have to be made: reevaluating your go-to market strategy and seeing how to better adjust some of your tactics associated with marketing. Looking at indicators and blind spots. While there's certainly a link to strategy with those, there's also tactical learnings that could come out by identifying things that maybe you don't see in yourself that others see in you.
A couple of other tactical situations might be channel modification. Are we in the right channel? Are we targeting our customers through the right distribution approach? User experience is another one. From a user experience, what's it like for our customers to actually go through the process, their journey map and being able to find us, and trying us and buying from us and using our services? Finally, there’s market defense. A lot of what you learn in a war game that's more tactically driven around market defense are the specific actions you take to blunt the competition from more of a street level approach.
Why Engage in a War Game?
Number one: aligning leadership on the market and competitive landscape to develop or test your strategies. Second, would be increasing the probability of success. A lot of times you may launch your strategies and don't really know whether or not it's going to be successful. You think it might be, but playing out the strategy a bit more in advance will increase your probabilities, because now you're able to sense the potential uncertainties that might come into play, and get a sense of future uncontrollable events or trends that might happen and how do you prepare for that?
The third is helping to evaluate alternative strategies to mitigate risks and threats that a company can face and how to neutralize those to have your plan succeed? A fourth primary kind of benefit of the value of a war game involves recognizing opportunities or hidden opportunities that your company can exploit.
A couple secondary benefits begin with bringing cross functional people together. People in sales and marketing, and operations, and distribution, and finance, and legal and all these other different groups get to participate. That helps break down communication barriers and the silos that often exist inside of organizations.
Getting everybody on board and knowledgeable about the strategy and direction because they participated in this kind of an event helps when you're actually executing, because they were part of the decision making process.
What to do when people aren’t sold on War Gaming.
We call that appetite. Do people have the appetite to engage as part of their culture in this type of an event? If they don't, oftentimes I it’s because of a lack of education of what it is. Why would anybody not want to better understand what their competitors might do in response to a product you're going to launch? Or better understand before you invest millions and millions and sometimes billions of dollars in executing a strategy? People, we find, don't because they don't often understand it.
What we've done is help individuals understand that we want to help organizations build the capability themselves. It's not just about hiring us or whoever that might engage in some kind of a facilitation of this event. The ultimate goal, whether you're in strategy or in intelligence, or a brand leader, we ultimately want you to be able to do this yourself.
We take an approach we call OCD, Observe Cooperate Do. You’ll see the whole process start to finish. The next time we'll do it together. There'll be pieces you do some of the heavy lifting. We'll do some of the lifting. That's the cooperate part. Then eventually you go and do. After about the third time you do one yourself. We like to help our clients build into their planning process the investment from the standpoint of building a capability.
Performing War Gaming In-House
Some companies do handle 30 or 40 war games a year, but they're much smaller, half day scrimmage workshops. They're not massively intense type of games. For the big decisions, for the big issues, for the big transformational shifts in business model changes, spending a couple times a year doing it right, to really learn, is something that ought to be part of the culture.
How to Structure a Business War Game
Who you have participate becomes a critical component to the event's success. You want to have the right mix of personnel, the right personalities, and the right level of knowledge in the room. You want folks that can be adversarial so it's not a big kumbaya, and everybody is always joyful and happy. You need some people that are going to say some bold, abrasive things at times, but in a professional way, of course, that shakes things up. Say things that challenges the status quo. You also you we want to be able to reflect the character and the culture of the competitor. You want to be able to act and see the world through their lens.
War games are not affirmatory exercises. If you ended up at the end of this saying, "We don't have to change anything," then it was done wrong.
The Process of Setting up a Business War Game
It usually takes eight to ten weeks overall. The first phase is the pregame planning. Really understanding the objectives and what teams are going to be involved? Who are the participants? Where is it going to be held? What are the exercises to achieve the end outcome? Part of that is also the briefing book development. The briefing books are documents that are less than usually 20 pages because we want people to read them in advance of the game. It's this document that gives all participants a baseline of knowledge, facts, insights, and perspectives on the market and landscape of the company culture.
A briefing book may include things like market figures, a competitive overview and insight about the company's current strategy from a corporate standpoint, brand standpoint, marketing, sales, pipeline development, financials, and future outlook. That's really the only prep work participants need to be a part of a War Game. An hour or two in advance to read this briefing book is typically sufficient.
The briefing book information is largely drawn from secondary or published content. Every now and then a war game may require more primary research because the topic we're looking at doesn’t have much written or published about it. We also work in collaboration with the research team at the client location, because they may have some insights already pulled together on the competition and the market, so we always investigate how we can reduce duplicate effort.
Setting up the teams and facilitator
There are normally four teams in a typical game. There's the home team and then two or three competitor teams. There's usually five to eight players per team, each player chosen to provide different dynamics and views of the market. In addition to the home and competitor teams, you might possibly include a distribution team or maybe a regulatory team, A war game is not always just about the competition.
Then there’s the facilitator which is the heart of the whole engagement. A strong facilitator keeps things on time and asks the tough questions that others may not be asking. Questions that can help provide guidance on completing the exercises, and making sure the outcomes get the data and content that’s needed. A strong facilitator is able to help manage the dynamics in the room, making sure there isn't anybody filibustering the conversation. So, the facilitator role is essential in the overall picture as they set the ground rules and ultimately lead to the end results.
A good facilitator understands when the temperature in the room begins to rise. They can feel and direct the tension which ultimately means it's a good game. Even though it can make people uncomfortable at time, conflict isn't always bad if it's done well and done professionally.