In our last post on War Games, we discussed the four key elements of a successful war game. In this post we’ll discuss the role of setting the conditions that form the basis of a war game.
A war game is intended to simulate actual business conditions and events. When looking for conditions on which to base the war game, the first place to start is with current events or events that are likely to happen within a short time frame. This lends a clear touch of realism to the event and also provides a clear rationale for the event itself. Not all current events or likely future events make for a good war game. The best events to use are those that will have a direct impact on the company’s strategic position and that are in areas where the company can make a change in its strategy. A condition that draws on these type of events is better able to translate the results that will produce action.
Building the event conditions should be a team effort rather than a solo task. Start by engaging with your management team to determine what decisions they face in the coming months. This group will tell you what is most important for them. Beyond knowing what is most important to the management team, it is also important to have them engaged in the war game process from the start as that will help move the results towards implementation.
Some recent projects we’ve had illustrate conditions that should be considered for a War Game:
- A pending launch of a new product where the client needed to anticipate how competitors will react
- Preparation for a significant new bid opportunity where the client needs to understand how competitors will bid
- Enactment of new regulations that will change the market and competitive positioning
- Strategic plan refresh that needed to account for changes in competitor actions
Often, the conditions will dictate what type of analysis is best for the war game. A launch of a new product will examine how competitors have responded to new product launches in the past and explore what they will do in the future. Similarly, a bidding situation will examine the competitor’s past bid strategy and extrapolate to the future based on that information. Clearly, there is some overlap in the kind of information needed to meet all conditions, but just as clearly, some information has direct applicability to some conditions and not others. Matching the analysis tools and the information collection to the conditions will produce a better war game.
Once you have a clear idea on the important events that will impact the company, and the decisions that will be made based on those event, the next step is to narrow the scope down to a manageable level. A war game is most effective when the number of competitors is limited to three or four, which requires between four and five teams, with one to act as the “home team.”
Competitor selection can seem like an easy exercise. The obvious choice is to select the top known competitors, and often that is the best choice. However, before committing to the top competitors, it is worth looking at the lesser competitors who may be working on a novel solution or are newly emerging as a threat. Including these competitors can produce very different results in the war game and also highlight preconceived notions about the market and competitors.
With your conditions and competitors set, you’re now ready to start building out an agenda for the war game, assigning teams, and creating the briefing books. In our next blog post we’ll cover how to set an agenda for a war game.