Why business war games are NOT for you
Updated: Jun 6, 2021
Eyal (Allan) Weiss / May 2021
“You” refers to executives and decision makers in medium and large companies. Sure, hundreds of companies across the world use business war games for priceless strategic insights, but YOU probably don’t need them.
Let’s benchmark terminology
Just to make sure we’re on the same page, let’s focus on the “product”: there are several types of business war games (BWGs); some are computer based (good for any company operating in a virtual universe), others are based on market equilibrium models, aka zero sum games (good for any company still working in the 1970’s, or in a static industry), but I’m talking about BWGs that are based on Competitive Intelligence (CI), solid strategic planning tools, and proven methodologies that simulate real world results, realistic market responses, real time assessments of your competitors and clients, Etc. These BWGs are essentially reality-based simulations, that dry test your strategy against what your market will most probably do (“market” includes competitors, trends, regulators, the whole package). The facilitators of BWGs don’t build or edit your strategy, nor bring their own agenda to the process. They provide a toolbox to leverage YOUR knowledge, expertise and your goals, so that you can adjust your strategy, gain better results and get cross-organizational support.
Based on a strict methodology and adherence to real-life data, these BWGs are incredibly accurate, readily accessible, surprisingly affordable, and their execution even verges on fun.
Wait, what? A strategic planning super-tool that’s NOT over-priced and might be fun? Certainly not everybody’s choice!
But - one serious notion should be clear: A BWG facilitator does not consult or change your strategy, not does he bring his own agenda to the boardroom. The very process of a BWG enables you and your management members to use and leverage your own knowledge, experience and skills. Its still your thing, your inhouse Tour de force. So everything you read from here on, reflects on how you and your team can see things by yourselves, and make better decisions inhouse.
So, chances are this BWG thing isn’t for you, for a few solid reasons;
1. Because you already know your business and your market extremely well.
I don’t doubt that, and surely that’s really the case. But that’s also the case with your competitors, who are just as savvy and professional. But the real point is, business history is full of cases where the best, most prominent leaders have failed to see, a-hmm, well, the totally expected. I always use the analogy that “a fish in the water doesn’t see the water”. Examples are plenty. Motorola, originally a communication tech giant, practically created the cellular phone industry, and dominated it almost exclusively from the early 80’s till the late 90’s. A serious stretch of time. Surely nobody knew the market better than Motorola. Certainly not some cellular newbies from Finland, who took the market by storm within 2 years. By 1998 Nokia was the new industry leader. Yet as history goes, they too had the most knowledgeable executives and engineers in the years to come. Where's Nokia today?
So what does “knowing your market” really mean? It means you know its factors, trends, opportunities, and risks. But sometimes, and more often these days, the next big thing in your market isn’t even on the radar, because it’s now being built in a garage in Ukraine, or as a spin-off with a non-competitor, safe under your radar while your competitors are already bidding to acquire that next big thing.
In the CI business, we call this 'early warnings'. Starting to see the picture?
2. Because your executives and R&D teams have solid experience, thorough industry understanding, and they are unbiased, dedicated professionals.
This is almost always true, and surely also the case with your company. Consider for example the R&D teams at industry giant Kodak. Driven by the company’s innovation ecosystem, Kodak’s engineer Steve Sasson developed the first digital camera in the mid 1970’s, inhouse. But Kodak’s core business was film, and developing digital photography would hurt sales, so they put it aside. A logical, professional decision, right?
By 2007 the original patent expired. 5 years later this global leader filed for bankruptcy.
Another wild thought on dedication – what if the best brains on your team leave and join a competitor? These things happen all the time, everywhere. It’s not the money that keeps them somewhere or lures them elsewhere. It’s challenge. Just something to think about.
3. Because you already set your strategy, and you have amazing strategic consultants. Possibly global giants like [ fill your trusted consulting firm here ].
I’ll pass this one. Really. Just google some articles on the actual success rate of the worlds’ strategy mega stars (‘cough’ around 30%, ‘cough’).
4. Because you’re doing great, and you faced similar decisions in the past with great success.
A client once told me he knows they have an amazing company and technology, because over the past decade they’ve tripled their revenues, in a highly competitive market. Being polite, I didn’t ask why they didn’t tenfold it, or provide examples of other companies who did. But actually, in this case the point is quite different, and crucial. Being great has a cost. We call it “the success trap”. Both companies and entrepreneurs who’ve had amazing success to this point, rely on that experience and their decision-making skills for future cases. That’s entirely natural, human and understandable. But industries, technologies and companies constantly change, adapt, and innovate. We hear of ‘disruptive technologies’ more often than not, and that’s exactly what they mean – that all the tools and frameworks that worked for you before – will no longer be relevant. Maybe they will, but if they don’t, can you afford a strategic mistake that’s based on confidence? You can trace this ‘success trap’ in past decisions of IBM, Nokia, JCPenney, Blackberry, Hitachi, Myspace, Toys R Us, and the list is endless, skipping over thousands of smaller and local companies, each with their own success record. Until it isn’t.
To summarize, with no sarcasm whatsoever – your company can be an amazing organization, with dedicated leadership and solid success and forward-looking strategies. As fluent and confident as a fish in the water. Does your memory cache kick in now?
A fish in the water – doesn’t see the water.
A BWG might be just the thing you need to step outside your water tank, and take a realistic look into your tank, seeing all the other fish for what they are, seeing the overall landscape, and the things that hide in the corners. It will forever change your look on everything.
But if you dominate your market, and all is good – it’s natural to think you don’t need to challenge your strategy, or your team, or those things you know to be real and solid.
You don’t need to run Business War Games.
* Note on examples – yes, I’ve given “ancient” examples, from the previous century, when executives had to dodge roaming dinosaurs in subway stations. The aim was not to discuss recent examples and annoy any given operating company, but just as history repeats itself (excluding dinosaurs), so does business history. Repeatedly, and even more frequently and acutely today. Just read the business obituaries.