Imagine you are a business leader facing a tough decision with multiple possible outcomes and uncertain responses from your competitors.
Do you ever find yourself in a situation where you’re unsure what to do next? If so, then business wargaming may be the perfect fit for you! Business wargaming is a strategy simulation tool that helps business owners make better decisions by allowing them to visualize different scenarios and their outcomes. These exercises model various business situations, enabling participants to analyze and optimize strategies in realistic contexts. Business wargaming can also help organizations clarify or refine their vision for the future by exploring innovative strategies and aligning stakeholders around shared goals.
A war game workshop is a strategic tool that enables businesses to foster creativity, challenge existing processes, and gain a competitive advantage.
This article will discuss business wargaming and how to utilize it as a strategic tool to enhance your business.
The military first utilized wargaming to aid in planning and preparing for battle. Business wargames are a variation of this concept developed specifically for businesses. It enables business owners to visualize various scenarios and their outcomes, which helps them make more informed decisions.
It differs from traditional strategic planning in many ways, primarily focusing on the behavior of other market stakeholders, such as competitors, regulators, and the economy. Business wargaming often draws on game theory, using mathematical models to analyze strategic interactions and predict stable outcomes.
Understanding Business Wargaming
Business wargaming is a strategic simulation tool designed to help businesses make informed decisions by visualizing different scenarios and their potential outcomes.
This process involves simulating market conditions to identify strengths and weaknesses in a business strategy, allowing companies to test and refine their plans against real-world challenges. Often, business wargaming includes scenarios with multiple competitors, which increases the complexity and realism of the exercise. Business wargaming is not just a static exercise but a dynamic and interactive process that encourages cross-departmental communication, sparks creativity, and challenges the status quo. To gain the maximum benefit from the process, participants must fully understand the scenarios and dynamics involved.
Companies can better prepare for future uncertainties and enhance their strategic planning efforts by engaging in business wargaming.
Origins of Wargaming
Wargaming has its roots in the military, where it was initially used to prepare for battle and anticipate potential outcomes.
Over time, this concept has been adapted for business use, enabling companies to refine their strategies and anticipate their competitors’ next moves. While the term “war game” might evoke images of conflict, the war metaphor frames business competition as a strategic battle, emphasizing the need for foresight, planning, and tactical decision-making.
Business wargaming leverages the same principles of anticipation and preparation used in military wargames but applies them to the competitive business environment. Wargaming techniques have evolved from military origins to become valuable tools in business strategy, training, and competitive analysis.
Goals of a Business Wargame
The primary goals of a business wargame include:
- Identifying potential risks and opportunities: By simulating different scenarios, businesses can uncover potential threats and opportunities that may not be immediately apparent.
- Developing a competitive strategy: Business wargaming enables companies to craft robust and adaptable strategies in response to changing market conditions.
- Improving market understanding: Through the simulation of market dynamics, businesses gain deeper insights into their competitive environment.
- Enhancing collaboration and communication among team members: Wargaming’s interactive nature fosters teamwork and improves communication across departments.
Achieving these goals positions businesses for competitive success in their markets.
By achieving these goals, businesses can gain a competitive advantage, improve their strategic thinking, and make more informed decisions. This process helps craft better strategies and build a more cohesive and agile organization.
What are the different types of business war games?
There are two main types of business wargaming and approaches to building a business plan:
Business war games can be tailored to specific business units within an organization to address unique challenges faced by each unit.
A ‘war game workshop’ is a structured environment where diverse participants engage in role-playing scenarios, allowing insights into market dynamics and decision-making strategies.
The first type is competitive wargaming, which simulates market competition to anticipate competitors’ moves and strategies. The second type is collaborative wargaming, which aims to improve internal processes and team collaboration by simulating various business scenarios. Both types can be applied at the business unit level for more focused strategic planning and competitive analysis.
Scenario wargaming:
This type of business war game enables business owners to explore various scenarios and their potential outcomes. Scenario wargaming enables participants to assess the likely outcomes of their strategic choices, thereby enhancing their ability to predict competitor behavior and make informed decisions.
This can be helpful for strategic planning decisions about product launches, mergers and acquisitions, and marketing campaigns. Scenario wargaming also enables teams to simulate and analyze the structure and potential outcomes of a deal, such as an acquisition or partnership, helping to test strategies and assess risks before finalizing any agreement.
Tactical games can be used to evaluate the likelihood of success for a given scenario. Scenario wargaming can be effectively conducted in a ‘war game workshop’ setting, providing a structured environment for exploring different scenarios.
Strategic wargaming:
This type of war game helps businesses make long-term decisions about their business model and competitive strategy. Strategic business war games can be an essential component of a competitive intelligence plan.
Strategic wargaming can also be conducted in a ‘war game workshop’ to facilitate long-term decision-making and the development of competitive strategies.
There are a few things you need to keep in mind when using business wargaming:
- Make sure you have a clear goal for the simulation.
- Be realistic in your assumptions and calculations.
- Be prepared to adjust your plan based on the simulation results.
You can see what strategies work and which don’t by observing different scenarios. This information can help you make better decisions about competing in the market and staying ahead of the curve.
Strategic wargaming is also valuable for validating and strengthening your final strategic plan by identifying potential weaknesses and blind spots before implementation.
Tactical Games
Tactical games are a type of business wargame that focuses on specific issues or problems within a business context. Unlike strategic games with a broader scope, tactical games are more narrowly focused and are used to test a few small tactics and anticipate competitor counteractions. These games also enable teams to practice responding to counter-moves from competitors, simulating a structured process of moves and counter-moves to better prepare for real-world challenges.
These games can be run separately or as part of a larger business simulation, providing valuable insights into the likelihood of success for a given scenario.
Using tactical games, businesses can refine their strategies, identify weaknesses, and develop more effective plans. This targeted approach allows companies to address specific challenges and improve their strategic planning.
The following section will explore the various types of business wargames, including strategic and tactical games, and examine how they can help achieve business objectives.
Business Wargame Structure
A well-designed business wargame is built around a structured framework that mirrors the complexities of real-life competition. At its core, the structure comprises several key teams: the company team, competitor teams, the market team, and the control team. The company team represents the organization conducting the wargame, focusing on developing and defending their strategies. Competitor teams are typically composed of senior executives or managers who step into the roles of significant competitors, using their industry knowledge to challenge the company’s plans and simulate authentic competitive scenarios.
The market team plays a crucial role by representing market participants—such as customers, regulators, or other stakeholders—and evaluating the attractiveness of each company’s offerings. Their feedback helps ensure that strategies are tested against realistic market reactions. Overseeing the entire process is the control team, which includes wargaming experts, industry specialists, and senior executives. This team ensures the simulation runs smoothly, maintains the integrity of the exercise, and guides as needed.
By structuring a business wargame in this way, companies can immerse participants in a dynamic, risk-free environment that closely resembles the competitive environment they face in the marketplace. This approach allows teams to test strategies, anticipate competitor moves, and refine their plans before implementing them in the real world. Ultimately, this structure helps businesses develop more robust strategies and gain a deeper understanding of their industry and competitors.
Who is a good fit for a business war game?
Do you have what it takes to be a successful business wargamer?
To get the most out of a business war game, you need to be able to think strategically and make realistic assumptions.
You must also be prepared to change your plan based on the simulation’s results. If you can do all that, then business wargaming may be right for you!
War games are more successful when an organization can access market research and competitive intelligence, which helps inform the teams about their markets, brands, and competitors.
Participating in a war game workshop can help individuals and organizations gain practical insights and improve their strategic thinking.
Securing buy-in from all stakeholders is essential to ensure the effectiveness of the wargame, as it fosters alignment and commitment to the outcomes.
What are business wargames used for?
War gaming can be utilized in several ways, including forecasting demand, testing new products or services, creating a competitive advantage, or assessing the impact of mergers and acquisitions. It can also help identify potential problems before they become too costly or challenging to fix.
Some other purposes of wargames are :
- To improve decision-making
- To identify and assess risk
- To evaluate business models
- To develop competitive strategies
- To deeply analyze the competitive environment
- To apply sophisticated market research
- To develop competitive intelligence
- To identify and analyze external opportunities that could impact the business
How are wargames different than scenario planning?
Scenario planning is a process that involves making assumptions about the future and how your business will be impacted. Scenario planning does not delve into the behavior of external players in the same way a war game does.
A business war game can help you better understand the competitive background and how your company compares. Business wargames allow organizations to pressure test their strategies against realistic competitive responses, helping to identify weaknesses and validate assumptions before implementation.
Competing companies can be used as allies or enemies in the game, giving you a better understanding of how strategic initiatives might work in certain situations.
A war game can explore the competitive dynamics of your marketplace in much more depth than any other method.
A business wargaming exercise can be an opportunity for team building. Participants will need to work together to be successful and achieve the game’s objectives, which can help build trust and cooperation within your team.
How does the wargame process work?
Business wargaming is a strategic simulation process that can be summarized into three steps: setting up the game, running the game, and gaining insights from the game.
Most wargame projects are run as role-playing sessions in at least two separate games. Its overall purpose is to help a business make informed decisions.
To set up a successful business wargame, you must define the game’s objectives, identify the players, and determine the scenario.
The next step is to run the game by simulating different strategic moves and tracking the outcomes. Business wargames are often played multiple times to test various strategies and scenarios.
Finally, analyze and discuss the game’s results with your team to gain insights that can help improve your business.
War games are usually conducted with several different cross-functional teams, where each team represents a specific market participant or stakeholder:
- A market team that is responsible for playing the role of customers and representing their interests. The market team plays a vital role that is often overlooked.
- A competitor team, which role plays the actions of your most significant competitors. There may be up to three competitor teams in a war game. Teams role-playing competitors simulate rival companies' actions to test strategies. Playing competitors is crucial for gaining insight into their likely moves and understanding competitive dynamics.
- A company team, which is responsible for playing the role of the business;
- A control team, which is responsible for recording and interpreting the results of the game;
- A referee oversees the game and ensures that all participants follow the rules.
War games can also help build team morale by allowing employees to work together towards a common goal. This type of activity can help strengthen relationships between senior managers and their team members, as well as encourage increased communication among team members.
The insights gained from a business war game can help you make better decisions about your company’s future and stay ahead of the competition.
The next step is to implement the insights gleaned from the wargaming exercise. This may involve changes to business processes, policies, or even the overall strategy.
Everyone involved in the wargame must understand the actions that need to be taken based on the results, so they can continue implementing them after the game is over.
Business wargaming is a powerful tool for evaluating business situations and enhancing decision-making.
It enables managers to test their assumptions about how their business operates and identify potential issues before they become actual problems.
This isn’t always easy, though; change can be difficult for organizations of any size. However, if you want your company to stay ahead of the competition, you must continually seek new ways to improve. And what better way to do that than by using insights from a business wargame?
Overcoming Challenges in Business Wargaming
While business wargaming offers significant benefits for strategic planning, it’s not without its challenges. One of the most common hurdles is ensuring that the game scenarios are both realistic and tailored to the company’s unique situation. Involving senior executives and key stakeholders in the planning phase is crucial, as their insights help shape scenarios that reflect real business conditions. Leveraging up-to-date data and research further grounds the game in reality.
Another challenge is encouraging participants to break free from the status quo and think creatively. Business wargaming thrives on imagination and innovation, so techniques like role playing and scenario planning are essential for pushing teams beyond familiar patterns. By assigning participants to play the roles of competitors or even customers, companies can spark new perspectives and uncover hidden opportunities.
Resource constraints can also pose difficulties, as designing and running a comprehensive business wargame can be a time-consuming process. To address this, companies are increasingly turning to computer simulations and digital tools to streamline the process, making it more efficient and scalable. By anticipating these challenges and planning accordingly, businesses can maximize the value of their wargaming efforts and ensure meaningful outcomes.
What are the benefits of business wargaming?
There are numerous benefits to utilizing business war gaming as a strategic thinking tool. Some of the key benefits include:
- improved decision-making
- a better understanding of the competition
- increased team morale and cooperation
- insights that can help improve business processes, policies, and strategy.
Strategy is often a core competency of companies, but wargames are not commonly used. A war game can be a real game-changer for a company that needs to evaluate its competitive setting and anticipate the potential outcomes of various actions. Business wargaming enables companies to develop strategies aimed at increasing or defending their market share by simulating competitive moves and analyzing their impact.
Measuring Success in Business Wargaming
Determining the effectiveness of business wargaming requires a thoughtful approach to measurement. Success can be evaluated in several ways, depending on the objectives set at the outset of the game. One practical method is to track the implementation of recommendations and strategies developed during the wargame and monitor their impact on business performance over time.
Participant feedback is another valuable metric. Conducting surveys or debrief sessions after the game can reveal how engaged participants felt, whether they gained new insights, and how the experience influenced their strategic thinking. Companies can also use quantitative measures such as return on investment (ROI) and return on expectations (ROE) to assess the value delivered by the wargaming exercise.
Importantly, business wargaming is designed to uncover blind spots in a company’s strategy. The extent to which the game helps identify and address these blind spots—by mitigating risks and seizing new opportunities—serves as a key indicator of its success. By combining these qualitative and quantitative measures, companies can ensure their business wargaming initiatives drive real strategic improvement.
Best Practices for Business Wargaming
To fully realize the benefits of business wargaming, companies should follow a set of best practices that ensure each game is impactful and aligned with strategic goals. First, it’s essential to align the wargame with the company’s overall strategy and clearly defined objectives. This focus ensures that the scenarios explored are relevant and actionable.
Involving a diverse group of participants from across the organization—such as marketing, operations, finance, and even external experts—brings a range of perspectives and expertise to the table. This diversity enriches the game, leading to more robust strategies.
Utilizing a combination of techniques, including scenario planning, role-playing, and computer simulations, can stimulate creativity and innovation among participants. Having a structured process for designing, executing, and debriefing the game is also critical, as it helps capture valuable insights and ensures follow-through on recommendations.
Finally, companies may benefit from engaging external facilitators or consultants with experience in business wargaming. These experts can provide objective guidance, help avoid common pitfalls, and ensure the game delivers maximum value. By adhering to these best practices, organizations can create a sustainable and effective business wargaming program that drives ongoing strategic success.
Competitive Intelligence in Business Wargaming
Competitive intelligence is a cornerstone of practical business wargaming. It involves gathering and analyzing information about competitors, market trends, and industry dynamics to inform strategic decision-making. In a business wargame, competitor teams rely on competitive intelligence to craft realistic strategies and anticipate potential counter moves from rivals. This enables teams to simulate authentic competitive scenarios and test how their tactics might play out in the real market.
The market team also leverages competitive intelligence to assess the strengths and weaknesses of each company’s offerings, providing valuable feedback that helps refine strategies. By integrating competitive intelligence into the wargaming process, organizations can develop an in-depth understanding of their competitive landscape and identify opportunities or threats that might otherwise go unnoticed.
According to the Harvard Business Review, the use of competitive intelligence in business wargaming is essential for gaining a competitive edge. It empowers companies to make more informed decisions, develop effective tactics, and stay ahead of industry trends. By embedding competitive intelligence into every stage of the wargame, businesses can ensure their strategies are grounded in real-world data and are better prepared to respond to the ever-changing market environment.
Cross-Functional Collaboration in Business Wargaming
Cross-functional collaboration is at the heart of successful business wargaming. By bringing together teams from various departments—such as marketing, sales, operations, finance, and product development—organizations can leverage a diverse range of expertise and perspectives. In a business wargame, teams role-playing competitors work closely to develop and execute strategies, while the market team and control team provide critical feedback and oversight.
This collaborative approach breaks down organizational silos and encourages open communication, allowing participants to share knowledge and insights that might otherwise remain isolated within individual departments. Senior executives play a pivotal role in facilitating this collaboration, ensuring that the wargame aligns with the organization’s overall strategy and objectives.
Through cross-functional collaboration, business wargaming enables teams to develop a more comprehensive understanding of the competitive environment, ensuring that strategic plans are both realistic and actionable. By working together to play out competitive scenarios and test different tactics, teams can create more effective plans, foster buy-in across the organization, and drive successful execution of business strategies. This integrated approach not only strengthens the final strategic plan but also builds a culture of teamwork and innovation throughout the company.
Business Wargaming for Crisis Management
In today’s unpredictable business environment, being prepared for crises is more important than ever. Business wargaming is a powerful tool for crisis management, enabling companies to simulate potential disruptions and develop robust response strategies. Through scenario planning, organizations can identify vulnerabilities in their operations and test how different tactics might play out in real-life crises.
By engaging in business wargaming, companies can develop and refine crisis management plans, ensuring that teams are ready to act quickly and effectively when challenges arise. This process not only helps to mitigate risks but also fosters a culture of resilience and adaptability throughout the organization.
Moreover, business wargaming enables companies to practice their responses to unforeseen circumstances, identify gaps in their current plans, and implement improvements before a real crisis occurs. By proactively preparing for the unexpected, businesses can mitigate the impact of disruptions and recover more quickly, thereby safeguarding their reputation and long-term success.
Business Wargaming and Innovation
Business wargaming isn’t just about defending against threats—it’s also a catalyst for innovation. By simulating new ideas, business models, and competitive scenarios in a controlled environment, companies can experiment with creative strategies without real-world risk. Techniques such as role-playing and scenario planning encourage participants to think outside the box, challenge assumptions, and generate new insights.
This approach helps organizations identify and overcome barriers to innovation, whether they’re cultural, structural, or strategic. Business wargaming offers a safe space to test and refine new concepts, enabling companies to assess the performance of innovative ideas in the marketplace before committing significant resources.
By integrating business wargaming into their planning processes, companies can stay ahead of the competition, adapt to changing market conditions, and create new growth opportunities. Ultimately, business wargaming empowers organizations to turn imagination into action, driving continuous improvement and long-term success.
How can I get started?
Several different software packages allow you to run business war games. The most popular ones are:
Each package has strengths and weaknesses; some are better suited for specific industries depending on their unique needs, so you must decide which is right for you. You can also find some business wargaming templates online that you can use as a starting point for your simulations.
However, one of the best ways to benefit from a business war game is to engage a consulting agency like Asymmetric with experience in this field. They can help you set up a wargaming workshop, run it, and analyze the results.
Business wargame resources
If you want to run a war game for your organization, there are a few resources you can use to get started.
Wargames can play a major role in company leadership development. The Harvard Business Review wrote an excellent article titled “Wargaming Is More than a Rehearsal“ that examined the role of war games in the military.
Daniel F. Oriesek, a Principal with A.T. Kearney in Switzerland, wrote an excellent primer on business wargaming titled “Business Wargaming—Securing Corporate Value.”
If you’re looking for something more hands-on, some companies offer training in business wargaming. These courses equip participants with the skills and knowledge to run a successful war game, providing an in-depth understanding of business wargaming methodologies.
So, whether you’re just getting started or looking for more advanced resources, there’s something out there for everyone interested in business wargaming.
Ultimately, business wargaming is a valuable tool for enhancing decision-making in businesses of all sizes. If you’re looking for a way to get insights you can’t find anywhere else, this is the tool for you!
The role of war games in strategy planning
War games have been used for centuries to train commanders in the art of war. But these days, businesses are using war games to help with strategy.
What is business strategy planning?
Business strategy planning defines a company’s long-term goals and develops a plan to achieve them. This includes identifying the resources needed, setting deadlines, and allocating responsibilities. Effective business strategy planning also involves identifying key customer segments to target with tailored value propositions.
Often, a strategic game can help a company illustrate the impact of various strategy options. The use of wargames can drive improvements in strategic thinking within an organization.
A war game can be a real game-changer for a company that must evaluate the competitive landscape and anticipate the potential outcomes of various actions.
A business wargame can help a company overcome existing mental models and think creatively to address highly complex situations. Cognitive barriers and conventional wisdom are often key obstacles to developing an effective strategic plan.
Next steps
Whichever route you choose, I’m sure you will find that business strategy development using war games can be an extremely valuable tool for improving your understanding of how businesses operate and making better decisions.
At the end of each business wargame, take time to reflect on the lessons learned so that you can continuously improve your strategies and outcomes.
Frequently Asked Questions (FAQ): What Is a Business Wargame?
What is a business wargame?
A business wargame is a strategic simulation in which key stakeholders participate in a scenario designed to test and challenge their business strategies. Typically, participants role-play as their own company or as competitors, exploring how different decisions impact outcomes in various competitive or market environments. The purpose is to anticipate challenges, discover new opportunities, and prepare for unexpected disruptions.
Who should participate in a business wargame?
Ideally, a mix of senior leaders, department heads, and key decision-makers from across your organization should participate. Involving diverse perspectives from marketing, sales, operations, and finance helps ensure the simulation captures the complexity of real-world business scenarios. Sometimes, even external experts or consultants are brought in to play roles as competitors or market forces.
What are the benefits of running a business wargame?
Business wargames help companies test their strategies in a low-risk environment. The main benefits include:
- Identifying weaknesses in the current strategy.
- Gaining insights into competitor behavior.
- Encouraging innovative thinking.
- Preparing for potential industry changes or disruptions.
- Strengthening internal alignment on strategic goals.
How is a business wargame different from a business simulation?
While both business wargames and simulations model potential future outcomes, a wargame focuses more on competitive dynamics, emphasizing adversarial interactions. A business simulation, by contrast, often centers on internal decision-making processes or financial performance without the same focus on direct competition or market shifts.
How long does a business wargame typically last?
The length of a business wargame can vary depending on the complexity of the scenario and the goals of the exercise. They can last anywhere from a half-day session to a multi-day workshop. Some wargames may be part of a longer-term strategic planning process, broken down into phases that span weeks or months.
Can small businesses benefit from a business wargame?
Business wargames aren't just for large corporations. Small businesses can benefit by stress-testing their strategies, especially when entering new markets, launching products, or facing increased competition. The insights gained can help small businesses make more informed, confident decisions.
What types of scenarios are used in a business wargame?
Scenarios can vary widely depending on the company's needs. Some common examples include:
- Market entry by a new competitor.
- Economic downturn or industry disruption.
- Technological advancement that changes the market landscape.
- A significant shift in customer preferences or regulatory changes.
These scenarios are designed to challenge current strategies and encourage innovative thinking.
How often should a company conduct a business wargame?
It depends on your business needs, but companies often run wargames when significant market changes are anticipated or when developing long-term strategies. For example, conducting a wargame annually as part of your strategic planning process can help keep your business adaptable and prepared for new challenges.
Ready to Test Your Strategy with a Business Wargame?
Unlock Competitive Insights: A well-executed business wargame can uncover valuable insights about your market, competitors, and strategy. Whether preparing for a new product launch, market expansion, or simply wanting to sharpen your competitive edge, a business wargame can help you stay one step ahead.
Let's Work Together: At Asymmetric Marketing, we specialize in helping businesses like yours run effective wargames that drive real strategic improvements. Let's talk about how a tailored business wargame can reveal new opportunities for growth and help you prepare for the unexpected.
- Contact us today to discuss how we can design a custom wargame tailored to your business needs. Click Here
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Take your business strategy to the next level—be prepared, strategic, and ready for anything.
About the author
Mark A. Hope is the co-founder and Partner at Asymmetric Marketing, an innovative agency dedicated to creating high-performance sales and marketing systems, campaigns, processes, and strategies tailored for small businesses. With extensive experience spanning various industries, Asymmetric Marketing excels in delivering customized solutions that drive growth and success. If you’re looking to implement the strategies discussed in this article or need expert guidance on enhancing your marketing efforts, Mark is here to help. Contact him at 608-410-4450 or via email at mark.hope@asymmetric.pro.