War Games: A New Type of Competitive Analytical Tool

Steve McDonnell
Spotfire Blogging Team

Steve McDonnell
Spotfire Blogging Team

Data analytics plays a key role in corporate strategy development. With any new strategy, executives will analyze, forecast and predict future outcomes before adopting and implementing a strategy. But it’s not always possible to incorporate every strategic move a competitor might make into an analysis and it can be easy for executives to be influenced by beliefs that may no longer be entirely true. To combat this, some companies are using war games to help executives see their blind spots, anticipate competitor attacks or responses to strategy and create plans to address them if they happen.

An article in the March/April 2011 issue of Analytics Magazine describes the benefits and best practices of using war games in business. In a one-day war game focused on competitive analysis, a company would typically create teams – one for the company and several others representing competitors. Teams conduct research on the competitor they represent prior to game day. The teams are given a basic set of assumptions, a shared understanding of the situation, some standard rules for interacting. Then they battle it out by creating a better understanding of competitor perspectives of the market, predicting the most likely competitor moves and testing options of how to deal with competitor reactions. While war games have their origin in advanced analytics such as operations research and organizational modeling, game day analytics are more qualitative than quantitative. Post-battle analytics often bring quantitative analysis into the mix.

The article describes several key components for success when using war games as an analytical tool in a business setting:

• Develop scenarios that force participants to address all the issues so that they will recommend actions that might not have previously been thought of.
• Select a group of participants who can come up with new ideas and are willing to voice and defend those ideas.
• Don’t place your most senior people on the “home” team — place them on competitor teams instead.
• Include a “troublemaker” on each team who will challenge everyone with unconventional ideas and approaches.
• Include more than just senior decision-makers, especially if they share a common point of view, to ensure that new ideas are generated and considered.
• Accept all ideas unless there is very strong evidence that an idea simply would not work.
• As you play, pay attention to indicators or warnings that might alert you to threats that are occurring or are about to occur.
• Conduct a review session and discuss the lessons learned from the game. Explore unanswered questions or scenarios in a future war game.

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