Formulating Strategy

A war game can be used for planning, including corporate strategy planning, business unit strategy planning and functional strategy charting; for testing strategic initiatives like product introductions and mergers and acquisitions; and for testing tactical initiatives like marketing campaigns (so called "competitor response modelling") and promotional tactics.

War gaming specialist KappaWest defines a business war game as a structured, disciplined and facilitated process designed to make the development and execution of a plan more effective by helping an organization to understand a situation much better than it could through other approaches.

"A war game 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," says KappaWest consultant Jay Kurtz. "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 war game."

At least that is how they should be played.

Gilad says war games should be about formulating strategy, pure and simple, as applied to a single product, a multi-product brand, a portfolio of related brands, a business unit, a corporation (except an unrelated conglomerate) or a country, region or globe. Any other purpose, he says, including attempts to shoehorn war games into teambuilding exercise, is a waste of money and time. "Any way one looks at it, there are only two possible purposes to a war game: to test a proposed strategy or to formulate a new strategy," he says.

And this is where even some of those organizations that kid themselves that they are using war games well actually have them all wrong. Far too many companies - and even some of the experts - apparently conflate war gaming with teambuilding, which it isn't.

For instance, Cutter Consortium co-founder and senior consultant Ed Yourdon, in a paper called "How War Gaming Can Help Agile Project Managers", described war gaming as a valuable tool for even the most peace-loving organization, and encouraged organizations to try it. Yourdon says war gaming is an essential tool for those interested in agile - as in "flexible" and "responsive" - project manage­ment.

"An agile project team is capable of reacting to unexpected changes in user requirements; unanticipated changes in the business environ­ment; and unexpected upgrades and replacements in hardware, middleware, and system-software infrastructure (that is, operating sys­tems, networking, and database management system packages)," Yourdon says. "Such project teams can't just say: 'We feel agile'; they must be agile. While some individuals (and perhaps even teams) might claim that they were born agile, most of us have to acquire our agility through practice and hardware. One of the best ways to do so is with a war-game approach that facilitates repeated practice in a competitive environment."

But Yourdon then goes on to recommend war games as a means to practise and facilitate teamwork, calling them great for orien­tation and the "bonding" of new employees and newly formed teams. "Even with experienced employees, and previously formed teams, war gaming can be an excel­lent mechanism for practising roles in a complex multi-role situation. Consider, for example, basketball teams who constantly practise new pass-and-shoot manoeuvres involving multiple players on the team," he says.

Gilad vehemently disagrees.

"The quote from Ed Yourdon - whom I don't know - is interesting, but not accurate," Gilad told CIO magazine. "He lumps together war games, which are specific and relatively expensive tests of strategic moves against non-cooperative third parties' response, with all kinds of practice, simulations, and other training devices. Using war games for anything but strategy is meaningless. Think of it as Blue Team-Red Team exercise in the military - it is very different from drilling a specific manoeuvre until everyone knows his or her role. If someone does not role-play the enemy, the Australian Navy would not run a war game. See what I mean?"