5 Reasons why Business Wargaming Should be Part of Your Strategic Decision-making

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

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 over an extended time horizon”, says Dr. Drew Miller, former DoD and business strategist and business wargaming veteran.

So, why should you consider making business wargaming a part of your company’s strategic decision making?  Here are 5 reasons:

  1. 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). “One of our clients ended up launching an entirely new, very profitable business as a result of the wargaming exercise.  They had no plans to do so going in to the exercise”, says Miller.
  2. 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.
  3. Immediate and future benefits – companies that have gone through wargames report that they benefit both from immediate strategic ideas and “future experience” that they can utilize later to more quickly recognize threats and opportunities as they arise.
  4. Time efficiency – wargaming enables a company to test in a matter of days strategic initiatives and hypotheses that will play-out over many years.
  5. Leadership development – those involved in the exercise operate under “real world” conditions and executives can observe how they handle the various scenarios and situations that arise.

“A key advantage of business wargaming is that it can be scoped as broadly or narrowly as you wish”, notes Dr. Byron Winn.  “You can simply test a single new product or feature introduction or a series of strategic moves and countermoves over a decade”.  Whatever the scope you choose, business wargaming can be a valuable element in determining your company’s business strategy.

John Murphy is a Principal with eos consulting, a management consulting firm that provides business wargaming within its strategy consulting practice.