Business Wargaming – A New Approach to Agile Decision Making

Companies are struggling to bring together various data sources, information, insights, and stakeholders to make holistic and agile decisions. Business wargaming is a process that integrates both data and people to achieve holistic and agile decisions. In this insights activation workshop, the corporate team ‘stress-tests’ various approaches to solving a specific business issue by playing ‘what-if’ scenarios in a competitive environment of actions and reactions. This interactive process enhances participants’ understanding of market dynamics, as they walk in the shoes of competitors, leading to better strategy planning and execution. After the live or virtual session, the team walks away with answers to critical questions and alignment on activation strategies.

And let’s not overlook another big benefit: your team enjoys the process.

WHEN TO USE THE WARGAMING PROCESS

Wargaming has been most effective for companies tackling the following types of decisions:

  • Responding to changes in market conditions
  • Portfolio planning and pricing decisions
  • Testing a new positioning strategy
  • Entering a new market

HOW THE WARGAMING PROCESS WORKS

  1. Set the business objective

What question(s) need to be answered? It’s important to be as specific as possible to achieve actionable results.

  1. Assemble cross-stakeholder teams

Who is involved in the wargaming session depends on the question at hand. Include cross-functional stakeholders who have relevant expertise and are impacted by the decision. Participants are divided into teams, one representing the company and the others each representing key competitors.

  1. Gather data and information sources

In preparation for the wargaming workshop, gather data and information sources, along with existing insights. SKIM recommends using a mix of real-world data (e.g. company data, third-party data, etc) and experimental data (e.g. research). We find combining these two worlds produces the most reliable predictions.

business wargaming

 

The SKIM team prepares and distributes briefs prior to the workshop to help participants understand competitors, their offerings, their focus, and their position in the market. Participants must review the brief and come prepared to respond to a series of questions.

  1. Conduct the wargaming workshop

The wargaming workshop typically takes place over a period of two days. It can be done as an in-person meeting, but also works well as a virtual event with two 4–6 hour sessions.

Here’s what the workshop looks like:

  • Review the business objective and make sure everyone understands what needs to be achieved.
  • Equip the teams with data and information briefs developed from real-world and experimental data sources.

 

  • Each team meets separately to discuss a question or scenario, where they assume the role of a competitor and answer the question as the competitor would. This is where the fun comes in… and the learning. Taking on the role of a competitor results in creative thinking, and truly
    understanding the market and the consequences of actions. We’ve seen participants take the ‘game’ very seriously (e.g. outfitting the rooms in the competition’s branding, etc) because it can really produce completely new insights!
  • Teams gather to deliver their answers, react to, and assess the market dynamics. As the facilitator, SKIM employs different techniques to assess the quality of the decisions made by the teams, e.g. by using a predictive simulator.
  • Teams continue to meet in multiple rounds to examine new conditions and deliver recommendations, followed by analysis and assessment of the results.

BUSINESS OUTCOMES OF WARGAMING
At the end of the two-day wargaming workshop, organisations leave with shared alignment: consensus on a chosen strategy or specific actions with a data-driven approach that builds confidence in the decision and readiness or immediate activation. And organisation teams will have a great time doing it!

Here’s an example: a global consumer goods company wanted to showcase their commitment to sustainability through one of their portfolio brands. They were having trouble deciding which brand was most appropriate. Through the wargaming workshop, they identified a brand that as a perfect fit, but that nobody had considered previously because it was recently acquired. The participants left with alignment on the decision and were able to quickly implement their plan.

Wargaming is especially relevant in Asia. Local Asian companies like Asian Paints, Jollibee Foods, Shanghai Jahwa, and Xiaomi leverage local knowledge agility and aggressiveness in the market to fight and win over multinational companies. They also leverage the fact that multinational company decisions are much more visible due to their more transparent nature and presence in other markets. Multinational companies cannot assume symmetric considered responses to their pricing and promotion decisions. They need to get in their local competitors’ shoes to understand what the competitor response is likely to be, and hence the long-term consequences of business decisions.

By Arne Maas LinkedIn, Business Consultant, and Stefan Ammerlaan LinkedIn, Research Consultant, SKIM