War Games for planning your strategy in a VUCA world
Posted by | Michael Ratcliffe
The one thing that few people would disagree with is that the business world has become more dynamic, more disruptive and more uncertain.
Fuld & Co is being contacted by clients who have realized too late that some new entrant has slipped into their market and is successfully eating away at their market share. Sometimes they do not even know who this intruder is, they just see their market share going down. Other times they know only too well who it is, but realize it too late. They have not been paying enough attention to their competitive environment. Lastly, they find that some new upstart has taken full advantage of their failure to be on the lookout for new competitors.
The threat of new entrants and increasing competition
The classic strategy of these new entrants is to target a segment of the market that has been underserved. An entrepreneur from within the market sees this opportunity, gets funding and bingo, launches a new highly targeted service. This is often done at a very competitive price and at a high value to customers. To make matters worse, increasing the funding is increasing the venture capital. This means that the upstart has not just the backing of a very aggressive financial organization but also has ready access to entrepreneurial advisors to help refine their attack strategy and business plan.
Fuld & Co’s recommendation to a client faced with such a situation is a two-stage program. Firstly, a deep dive into the new entrant to understand them, their history, their current tactics and their future strategy. With this at hand, the second step is to run a War Game analyzing the strategy of one or more of the client’s key competitors. Led by Fuld & Co, the client scrutinizes the findings of this deep-dive and builds their strategies for what future actions they should take. This includes analysis of the competitors during the workshop.
Why hold a War Game?
The need for War Games is not always because a client is faced with a major competitive attack from a new entrant. A client might see that some major market disruption is likely to happen. For example – a long-time competitor launching a major new product or service. Or, the Government planning to pass some critically important legislation. It can also be that the senior management team needs to test their company’s reaction to different future disruptive scenarios. These can be a major cyber-attack or an act of God.
The goal of the War Game is generally three-fold:
- A detailed analysis of the current situation or a future scenario by the client team
- Alignment of the problem and the agreed solution by the whole team
- Agree on a set of prioritized actions
Planning for a successful outcome
For the workshop to be a success, it needs a good, well-researched and well-written Briefing Book that gets all participants up to speed in advance. This can be used as a key reference during the workshop. A deep dive into a key competitor, carried out before the War Game, is ideal as the basis for the Briefing Book, as are interviews with experts within the client organization.
The structure of the War Game is simple. Participants are broken up into teams with several rounds during which the teams analyze the situation and then share their findings. This allows the members of other teams to discuss and comment. It is critical that custom templates are built for each workshop. The reason is that the different teams can make similar analyses of the situation and the readouts are directly comparable. These templates could be designed to identify key strengths and weaknesses, strategies, or products and services of the competitors.
Fuld & Co’s War Games for clients include between 20 to 30 participants from the client who analyze 1 to 5 competitors in workshops. Participants are then split into a minimum of two teams, with at least one team for each of the targeted competitors. There is always pressure to try to run the workshop in less rather than more time and Fuld & Co tries to keep it to one day. However, where more than 3 target competitors are to be analyzed, one day is not enough to deliver a high-value workshop with meaningful results. But instead should be expanded to one and a half or two days.
A powerful tool for strategic planning
The right workshop, with the right research, at the right time, can be very powerful. It can level-set a client, enable them to understand key competitors’ strengths and weaknesses. Ultimately, they can build effective defensive and aggressive strategies.
All too often, key managers become siloed and don’t have a holistic view of their competitive environment. War Games allow them to stand back and look at the market anew. They can deliver a high-value overview of the market in an intensive, one or two-day workshop. This allows them to review and, if necessary, redesign their corporate or key product strategy.
The value of such an outcome is huge and the need for such a team reset is constantly increasing. The reason behind this is that the external market is becoming ever more VUCA – volatile, uncertain, complex, and ambiguous.