War Gaming as a tool to predict competitor actions

by | Jul 15, 2022

In a competitive marketplace, knowing your competition’s next move can give your organization an advantage. War gaming is an effective means to establish how your competitors will react to changes in the market. When conducted properly war gaming can deliver insights about how business and non-business factors impact decision making while also developing the skills and critical thinking of those involved. However, there are critical steps and actions needed to reap the full benefits of war gaming.

History of war gaming

War gaming has its origins in the military but can be an effective tool when dealing with uncertainty in business. War gaming is a role-playing simulation of a competitive marketplace which can be used for training, team building, and to test your own business strategies against competitors. Modern iterations of war gaming are linked back to the Prussian Kriegsspiel in the late 1800’s, but in a business context, war games began to be developed in the 1980’s.

Why war gaming

In business, the popularity of war games stems from the experience that can be gained in hypothetical strategic decision-making and being able to see the consequences of decisions made. Non-business factors, such as global pandemics, are affecting businesses and provide an unpredictable landscape. Deloitte notes how war gaming can help companies counter this unpredictability. War gaming is not always a simple exercise, and it is important to conduct it properly.

Competitor profiles, competitor benchmarking, or regular competitor tracking programs are meant to understand companies at a point in time based on existing market dynamics and have little future-looking orientation. War gaming allows you to understand a company’s future-looking strategy when impacted by a market changing event.

Conducting a war game

War gaming is about testing and finding an effective business strategy. A specific goal needs to be defined before the workshop. The more specific the goal that is set, the more specific the outcome will be. Example goals for a war gaming workshop are to:

  • Develop a new pricing model
  • Determine the best path to market for a new product
  • Decide how to react to a competitor strategy shift

Once the goal is defined, pre-workshop planning can begin. This planning includes researching the market and competitors, so that an organization has a comprehensive baseline knowledge from which to begin strategizing. You must also assign pre-work, which can be reading information packages or a meeting to prepare some material needed, so that these teams are prepared for the workshop.   The final step before the workshop is creating teams of people who will represent different actors within the market.

War gaming is typically conducted in a workshop format that brings together a diverse group of viewpoints within an organization. This diverse group is critical to test different theories about competitors and their actions. The workshop is the focal point of the exercise, and there are critical aspects to ensuring success. First and foremost is the previously mentioned problem which will be the focus of the workshop.

While conducting the exercise, it is critical to assign several roles to individuals who can help make the war gaming more efficient. This includes a project manager who helps coordinate the different teams and ensures the plan for the exercise is in line with the intended outcomes and audience. Another individual must be an internal project manager. They will oversee the socialization of the material upon completion of the workshop. Team leaders will also need to be assigned who will be responsible for their individual teams and ensuring that they are prepared for the exercise. These roles do not need to relate to specific roles within the company conducting the exercise. However, it is important to consider how the roles and responsibilities should be incorporated into different project roles.

Once the workshop concludes, there are some critical steps that must be taken. The events of the workshop are important to disseminate to those who did not attend. The attendees need to be debriefed and the activities and outcomes of the day must be written down and disseminated. This way the insights gained can benefit those who did not attend while also informing future strategy.

Benefits of war gaming

Organizational benefits of war gaming are plentiful. War games support companies by:

  • Allowing experimentation with new strategic directions and decisions without real-world costs or consequences.
  • Broadening the scope of strategic planning options a company may consider.
  • Enabling new perspectives and a greater understanding of competitor leadership and motivations.
  • Better anticipating the future market directions of competitors, and how they may react to unexpected changes in the market.
  • Better understanding the effects of new products, new competitors, and new technologies being introduced in a market.

There are also benefits for the participants of a war game. These include:

  • Support to find blind spots in their teams regarding market realities, competitor capabilities, and likely outcomes.
  • Enhancing collaboration between cross-functional individuals who would not be in contact otherwise, thus enabling greater cooperation, communication, and to feelings of camaraderie.
  • Providing insight into the future of a market that may not have been previously available.

War gaming best practices

Before planning and designing a corporate war game exercise, be sure to consider the following best practices:

  • Ensure that there is a clear and intended outcome for the exercise. For example, to understand how a new product would impact ones already on the market.
  • Proper team structure and who will be present is critical, as is a balance of the seniority of the team members, their roles, and backgrounds. It is important to note that diverse viewpoints within these teams will enable greater success in the exercise.
  • The event should be promoted to the participants, to ensure their excitement and preparedness for the workshop.
  • Ensure that pre-work is thoughtfully designed and will prepare stakeholders to participate in the war game effectively. If a team member is playing a competitor, they should come ready to think as that competitor.
  • Ensure that there is enough time to run the event and that the time is used efficiently.
  • Consider using a third-party vendor to help design the pre-work and facilitate the session. Outsiders can present alternate views and hypothetical situations, while also providing external experience that can counter bias.

How can HelloInfo help with war games?

Building and running a war game requires an investment of resources to ensure success. Engaging a third-party such as HelloInfo can take some of the effort off your key team members so that they can participate. HelloInfo typically supports clients on the planning and project management for the war game, in addition to supporting with the building of pre-work, facilitating the events, and providing participants and other key stakeholders with comprehensive wrap-up deliverables.

Interested in learning more about war gaming and how HelloInfo can help you compete in an uncertain market? Schedule a call with us.

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