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Background

Simply, a business wargame is the adaptation of military wargaming to a business environment. It helps a company with strategic, operational and tactical planning, and execution.

Have you ever wanted to simulate what might happen if your business made a strategic move such as introducing a new product or a new market? Business wargaming is a no-risk, insightful way to test what might happen if you did.

wargaming

Wargaming has been utilized in the military for decades and is a proven technique for considering strategic initiatives and the likely reactions of rivals. Applying the same techniques to the business ‘battlefield’ is an extremely effective way for companies to simulate the results of strategic moves. It can be done over an extended time horizon. One just can’t get into the mindset of competitors and a realistic, future environment in a normal strategic planning session.

What is a wargame?

A wargame is a role-played simulation of a business situation, usually one that involves a set of teams representing a market or customer, a set of competitors, and a series of other uncontrollable factors or entities. It involves a series of rounds representing a specific period of time or a phase in a plan. Reflecting reality, all teams act concurrently, each without all the information it would like to have about what its competitors are currently planning or doing, or exactly what is going on among the uncontrollable factors. Only after a round has been completed does each team learn the effects of its decisions and actions when they are melded with those of all the other elements represented in the wargame.

Depending upon the situation a company is facing, conducting a wargame accomplishes several different purposes. For example, it can help convert data and information about a market, competitors, and other factors into actionable intelligence that adds real value to the quality of planning. Once the dangers of ‘steering by the wake,’ simply extrapolating past strategic successes into the future. A wargame can generate an appropriate mix of both hard and soft deliverables. The hard deliverables from a wargame are usually documented in the After Action Report prepared shortly after the wargame’s completion. The soft deliverables are reflected in changes in the “hearts and minds” of the participants, such as new insights, knowledge, and skills developed from wargame role-playing.

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Why should one consider making business wargaming a part of your company’s strategic decision making?

Here are 5 reasons:

Unexpected results : In many cases, the results one would have expected prior to the wargame are not those that materialize. Or, don’t turn out to be the most valuable).

Proven effectiveness : On the battlefield and in the boardroom, wargaming produces proven results.  Such as, uncovering strategic insights, anticipating competitive responses and improving strategic thinking.

Benefits : Companies that have gone through wargames report that they benefit  from strategic ideas and future experience. They can utilize this later to more quickly recognize threats and opportunities as they arise.

Time efficiency : It enables a company to test strategic initiatives and hypotheses that will play-out over years in a few days.

Leadership development : Those involved in the exercise operate under “real world” conditions. Executives can observe how they handle scenarios and situations that arise.

Conclusion | Why business wargaming

A key advantage of business wargaming is that it can be scoped as broadly or narrowly as you wish. You can simply test a single new product or feature introduction or a series of strategic moves. One can  create counter-moves over a decade. Whatever scope you choose, business wargaming can be a valuable element in crafting a better business strategy.

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