How can business wargaming help you grow your business?
This article is by Dr Sara Ulrich, Global Business Wargaming Lead at PA Consulting. It explores the concept of Business Wargaming and how it can help companies.
It’s never been so difficult to make sense of our complex decision-making environment, but there is a proven approach that can help: business wargaming.
A business war game is a business simulation based on military techniques to explore and stress-test plans and practice skills by giving decision-makers a realistic but safe way to explore options and identify future challenges and opportunities by seeing the “forest and the trees”.
1. Business wargaming is a realistic and safe experiential approach to decision making
Instead of passively listening to a “death by power-point” presentation, the participants are part of an experiential event where they are actors of their own solution. Business wargaming also gives participants a realistic experience where they are making decisions under similar pressures as they would in real-life. Yet, it is a safe environment where it is acceptable to try and fail.
Companies often request a business war game process to try and “break” their established plans. This helps them to see what the possible single points of failure are and test their resilience of their supply chain or programmes’ roll-outs, and their strength across the different functions or regions. The benefit of this approach is that those taking part feel able to put everything on the table without fear of judgement.
They can then tackle the challenges head on and try out any decisions or actions, whilst feeling empowered to ask the difficult questions.
2. Business wargaming enables companies to see “the forest and the trees”
Business wargaming gives participants the chance to see the potential consequences of their decisions. The role played or real resistant interactive external environment enables them to get inside the heads of their customers, patients, competitors, regulators, or media. This fresh perspective means they can get inside-out and outside-in points of view and see the whole picture (holistic system thinking).
This is particularly helpful in flushing out unknowns, unintended consequences, and false assumptions – and in doing so, go from a “2D” to a “3D” planning process. This proved invaluable when a global life sciences company was about to launch a new drug in a new market and wanted to see how their marketing and pricing strategy plan would work, especially in terms of how this new market’s external environment would react.
It turned out that two of their most important stakeholder groups did not react well to their plan. This meant their strategy had to be amended, but by running a business war game, the company saved large amounts of time and money by not rolling out their original untested plan.
3. Business wargaming combines content and behavioural transformational impacts
Business wargaming not only tests the content of a decision or plan, but can also transform behaviour. It encourages teamwork, rehearses responses and it builds consensus or alignment with multiple stakeholders. This is highly effective in rehearsing crisis management or other project responses but is also useful in bringing people together to drive change. It is particularly helpful at reducing management biases and behavioural blind spots.
We saw this when a global manufacturing company wanted help to review their draft Brexit mitigation plans and deal with the challenges of having two separate administrative entities, with two different views. They started by conducting two separate sessions to develop a factual dialogue about the challenges and manage dissenting opinions and biases. Then, participants from the two regions came together to create a common Brexit body of knowledge and cultural understanding that paved the way for dispassionate planning.
4. Business wargaming is a powerful horizon scanning tool
Business wargaming has a critical role to play in helping organisations plan for the future and explore what might affect them and how to be better prepared for the unexpected. It does not provide a crystal-ball; it does not predict the future; but it does consider possible future impacts on your organisation to support more robust decision-making and planning, which foresight or scenario planning cannot achieve on its own.
One business wargaming approach is known as “back from the future”, where participants identify possible futures and then create an action plan to achieve what they want – and avoid what they do not – in those futures. Companies have used this to consider big planning challenges like their sustainability and climate change plans, joint ventures or mergers and acquisitions, digitalisation impacts or the future of work in a COVID-19 new normal.
This kind of horizon scanning can be used to explore a combination of very disruptive futures: the “perfect storm” future event. This “perfect storm” scenario combines two or three future challenges at the same time: for example, an ongoing acute pandemic scenario, the effects of Brexit “Swiss-style” deal implementation and a massive organisational transformation.
Business wargaming can deal with real organisational survival questions, or at the very least, major decisions. By having a realistic, future-orientated experience in a safe place, companies can build a well-rehearsed and stronger team and a robust hardened plan. This provides a way to revolutionise the classic approaches of decision-making and planning.