How to Use War Games and Scenario Building for Competitive Intelligence - dummies

How to Use War Games and Scenario Building for Competitive Intelligence

By James D. Underwood

A good portion of competitive intelligence involves speculation and playing “What if?” You engage your mind and the minds of others in trying to imagine what the next big thing and next little thing will be. You try to anticipate various crises and envision how your organization is likely to respond . . . and how it should respond.

Two ways to engage and challenge your imaginative powers and those of others are through war games and scenario building. War gaming is a form of simulated competition. Scenario building involves thinking and planning about future events in a specific area of interest.

How war games can help competitive intelligence teams

The idea of war games is to create a hypothetical competitive situation and then have two or more teams engage in battle. This simulated warfare helps you gain insight into how your competitors will respond and how well your own strategic initiatives are likely to play out on the battlefield. War games can be a real eye-opening experience, especially when senior executives take on the roles of your organization’s competitors.

Here’s how it works:

  1. Define the competitive issue or scenario you want to study.

    Your scenario should involve key players, including direct competitors and possibly even indirect competitors that may have an impact on the issue you’re studying.

  2. Assign players to competing teams.

    How you set up the teams may vary a great deal. For example, you may have two teams, one representing your organization and the other representing a rival, or you may have two or more teams, each developing a different product idea.

    When assigning players to teams, consider the following:

    • You want to assemble a fairly large group of players from your organization. The more participants you have, the more you’ll learn, and the more buy-in you’re likely to get when the time comes to implement a solution.

    • If you’re creating teams that focus on different areas (such as product innovation and sales), assigning individuals to areas that are outside of their usual area of responsibility is usually best, because it forces them to think more creatively. For example, assign your senior sales executive to the team that’s focused on product innovation.

    • Brief senior managers in advance that they should avoid taking control or leading any of the teams. The influence they hold over the group could stifle creativity and expression and negate the value of the game.

  3. Give the scenario to the teams, explain who they’ll be competing against, and describe the current conditions (context) in the industry segment, product segment, or other area of study.

    Encourage and foster an environment of friendly competition. War games are designed to challenge a paradigm (and blind spots) by getting everyone caught up in winning and beating the other teams. You want people to harass and razz other teams in fun. As players engage in simulated battle, miracles of learning naturally occur.

  4. Give the teams one hour to develop a strategy that they believe is the best for the company they’re representing.

  5. Give each team five minutes max to share its strategy with the whole group in a short presentation.

  6. After the teams have shared their strategies, send them back for another hour to develop a new strategy based on what all the other teams have done.

  7. Repeat Steps 5 and 6 through at least four cycles.

    A single war game may last up to eight hours. Each iteration creates another level of learning. Some companies have been known to pay upwards of $100,000 a day to have this kind of experience staged for them.

  8. Debrief the group.

    After wrapping up your war games, work with the group to begin to develop a consensus document about what’s really going to happen in the area you studied.

War gaming needs to be a fun exercise. When the players realize that they’re free to act as competitors, their competitive juices take over, and the output of the process can be pretty incredible. Case in point: As your organization engages in war games, it’s likely to benefit from

  • Some pretty incredible creative thinking about what can and in some cases will happen in the segment under study

  • Long-term positive impact on the organization overall

  • Insights that help executives overcome paradigm blindness and make decisions that are much better aligned with reality

How scenario development can aid a competitive intelligence team

Scenarios have been very helpful to companies that deal with high levels of uncertainty and within industries that involve high volatility. Scenarios offer a number of potential benefits that are helpful in the following areas:

  • Managing resistance to change

  • Developing contingency plans for unexpected events

  • Leading a team through an in-depth analysis of possible future events

Here’s a simple approach for building scenarios:

  1. Identify area(s) for study.

  2. Analyze the area of study around the forces or variables that can impact the outcome of each area under study.

  3. Gather intelligence about each of the key issues that appear to impact the issue or area of study.

  4. Create three scenarios that best describe the range of possible outcomes.

  5. Work each scenario into a story, such as: Bob’s (the CEO) Worst Day Ever, Business as Usual, and Bob’s Best Day Ever.

After you create three scenarios or three stories, consider sharing them internally with individuals who may have important information and insight to add. Doing so allows you to fine-tune the different scenarios for more accuracy.

Don’t forget the power of modified expert panels. If the issue justifies spending to obtain outside input, get outside industry experts to select a most probable outcome and keep a record of their comments so others can consider their reasoning.