Wargaming is a group, role-playing exercise that applies the competitive, unpredictable, and collaborative nature of military conditions to the world of business. Business or corporate wargaming asks leaders to adopt the roles of their own company, their competitors, and the market itself; a control team takes on the other roles that influence the industry. During this exercise, various business simulations are presented and the group must work strategically and synergistically to formulate an action plan based on the changing conditions.
Each exercise can last several days and it begins with a prescribed list of circumstances; the simulations to follow are dynamic and replicate anything that might occur in reality. When simulations are presented, the leaders playing the role of your business make strategic decisions about everything from product or service launches to new partnerships and purchases. The leaders playing the role of your competitors respond to these changes or use their knowledge of your company to their advantage. Those playing the role of the market or customer assess how each decision impacts their loyalty to, or investment in, your company. Background information is available because it tells an accurate story about each decision, such as the profitability of a new partnership or the cost of a piece of property or equipment. For a wargaming exercise to be successful, it must simulate an authentic business environment: competitive, uncertain, inclusive of the long-term impact, and realistic.
One of the benefits of wargaming is its dynamic nature; this strategy simulation tool allows leaders to prepare for the future, trial ideas without risk, and adapt their plans based on the changing and unpredictable environment. Unlike a strategic business plan, which is often created in isolation and based on snapshots of historical data, wargaming inspires agility, decisiveness, and innovation. By including more people in the process, and with the freedom to test out business opportunities that might feel risky or unfounded in the real world, new insights can be uncovered, old beliefs can be challenged, communication can be strengthened, and a clear vision can be created.
Another benefit of business wargaming is its uncomplicated framework. A simple spreadsheet can be used to track the results (financial, strategic, or otherwise) of each decision. Wargaming templates are even available online. For a backed approach to wargaming that requires less prep work, you can use a software program that allows you to run these exercises or you can hire a third-party company who specializes in hosting and analyzing wargaming sessions.
Business wargaming requires the initial preparation and setup, hosting and role-playing the exercises, and then assessing the results of the game. Multiple games can be played in order to explore various objectives and circumstances.
Determine the objectives of the wargame and consider the scenarios that are most valuable or relevant. Consider these questions:
Select and characterize the role players. Role players do not have to be strictly internal participants. When using internal participants, it is helpful to have them play a different role than their actual position; this can foster new insights and uncover blindspots that might be getting missed in the day-to-day. Consider these questions:
Research, prepare for, and explain the simulations. Consider these questions:
Run the business wargame and play out various strategic decisions.
Examine the outcomes of the wargame, gather insights from the team, and discuss how these lessons could be applied to your business plan, next strategic planning session, or competitive strategy. Consider these questions:
