HANNAH BATES: Welcome to HBR On Technique—case research and conversations with the world’s high enterprise and administration specialists, hand-selected that will help you unlock new methods of doing enterprise.
For those who actually need to compete in your business, you need to suppose like your rivals. How would possibly they reply to your subsequent transfer? What occurs in the event that they outmaneuver you? What’s your plan then?
That is referred to as company wargaming, or aggressive simulating. And based on Southern Methodist College adjunct professor Arjan Singh, this disciplined strategy to state of affairs planning helps corporations take a look at how their methods and ways maintain up available in the market. The train additionally helps them keep away from blind spots. He talked to host Alison Beard on HBR IdeaCast in 2024 about how corporations can get began.
ALISON BEARD: Now, I do need to be delicate about this time period battle video games as a result of, as we all know, many individuals on the planet from Ukraine to Israel and Palestine are coping with precise battle proper now. However, clarify for us why you employ it and what precisely it means.
ARJAN SINGH: Struggle video games are basically gown rehearsals for corporations to actually take a look at and stress take a look at their methods earlier than they deploy them into {the marketplace}. Wargaming could be very common within the army. It crossed over into the enterprise world about 40, 50 years in the past. The terminology has caught on since then. It’s also known as aggressive simulations.
Many of the functions of wargaming within the enterprise surroundings construct on the ideas from the army so there’s numerous similarities. Clearly, the subjects are very, very completely different. It follows a really related construction by way of understanding your key aggressive panorama, your surroundings, who the important thing gamers are, what typical conditions might emerge as you’re entering into the battlefield. So very related within the army world, and it crosses over into the enterprise world very, very seamlessly.
ALISON BEARD: And the way does it differ from conventional state of affairs planning?
ARJAN SINGH: So conventional state of affairs planning, the notion there may be actually round considering by means of completely different outcomes that will occur in a aggressive surroundings. You hope for one of the best, however you put together for the worst, and you’re employed out methods constructed on these various worlds which can be there.
Wargaming takes situations to a different ingredient. So it’s not nearly what’s attainable sooner or later, however then the wargaming provides layers on by way of the probably actions of key rivals and stakeholders within the market. After which, the actions that an organization ought to absorb response to that, as effectively. So, it actually drives house the actionability and shifting it past an mental train to actually pragmatic subsequent steps for organizations to actually convey them to life.
ALISON BEARD: So, give me an instance of a battle recreation train that you simply would possibly give your college students.
ARJAN SINGH: So, the one which we’re working presently at SMU is The Battle for Mobility. And so, the entire notion there and the central theme there may be round, “Who’s going to manage mobility sooner or later?” And so, we’ve bought six completely different groups which can be represented there. We’ve bought a number of conventional automakers like GM, Volkswagen, Toyota. Now we have next-generation suppliers like Tesla. We’ve bought Uber, in addition to Waymo, represented there. And, the entire notion there may be round, “Who’s going to win on this battle, the battle for mobility? What is going to mobility appear like sooner or later? And what if the world evolves to a scenario the place there’s nonownership of automobiles, applied sciences, AI? How would that have an effect on how individuals commute and use transportation sooner or later?”
ALISON BEARD: So, that concept of “the battle for” is perhaps how corporations or groups must be occupied with it, the battle for this specific market or this group of shoppers?
ARJAN SINGH: Yeah. Precisely. It’s actually across the battles. But additionally, round defining what that battle is and the way do you outline your business and the battle place and who you’re competing in opposition to?
So, I’ll provide you with an instance. Once we went into the COVID scenario, everybody was at house and bought acquainted with on-line collaboration toolkits. And once we bought again into the submit pandemic world, enterprise journey got here again with an enormous pressure. And so while you take a look at conventional rivals, you might see the airways are competing with different airways and different transportation suppliers.
However then on this new actuality, there have been numerous different competitors. So it was American Airways, Zoom, Microsoft Groups, the digital world versus the precise necessity to have the ability to go journey. And so, definition is admittedly, actually vital by way of what that aggressive set seems like. Corporations that outline it too narrowly can find yourself in conditions the place they might be blindsided by new rivals coming in. And so, that definition’s actually, actually vital by way of what that battle will likely be.
ALISON BEARD: What are the main kinds of video games or situations that you simply educate your college students and you employ with purchasers?
ARJAN SINGH: So while you take a look at wargaming, it actually suits into three completely different ranges. There’s strategic battle video games, which is admittedly anchored round long-term technique, how core macroeconomic tendencies are altering the aggressive surroundings. And so they’re basically answering the query, “What is going to the sport be sooner or later?” That tends to be far more senior stage executives that may become involved in strategic video games.
The following stage down is operational video games. And while you’ve bought an outlined area, you’ve bought outlined rivals. And it’s actually considering by means of the place to play, “What areas does an organization must be competing in?”
And then you definitely get down into the executional kind of video games, that are the tactical video games. So, these are typically a lot shorter time period. This tends to be centered in on promoting and normally has a one to 2 12 months time horizon. The core query there may be actually round, “Tips on how to win, how will we promote extra product within the market, how will we message in opposition to our competitors, and the way will we in the end find yourself successful in that area?”
ALISON BEARD: Yeah. After which, how do you give you the precise situations?
ARJAN SINGH: So, situations is an space which… It’s been very effectively documented and written about within the enterprise world. There’s alternative ways of situations. Situations may be quite simple. So, it might be so simple as having the group that’s in a battle recreation brainstorm a set of key issues that will have an effect on the surroundings. After which, voting on it and prioritizing which of them they want to handle. At its most straightforward kind, it’s a really fast train. It may possibly take a couple of minutes.
The standards for situations is admittedly round impactful conditions. So, issues that may impact a competitor surroundings and actually considering of it from an impression perspective, not chance, since you actually need to play out the situations that would be the most impactful.
ALISON BEARD: So while you’re promoting this proposition of wargaming to your college students and to purchasers, what particular alternatives do you level to that it will yield versus different kinds of strategic planning? After which, what particular issues or dangers do you see it serving to corporations overcome?
ARJAN SINGH: Yeah. The chance a part of wargaming is admittedly round serving to corporations keep away from blind spots. This tends to occur loads with incumbent gamers which have giant market shares. The perspective tends to be, “That is how the business is. We’re skilled on this area and we all know it effectively, therefore our success. And, we count on this to proceed.” There’s numerous enterprise college examples and case research of how that’s led to the downfall of numerous corporations, together with numerous iconic names which can be there. So, it helps-
ALISON BEARD: Kodak, Blockbuster, all of these.
ARJAN SINGH: Precisely. And so, this can be a discussion board for having these conversations. And, it’s significantly vital when the conversations are going to be uncomfortable. It’s going to problem the established order. It’s going to make a company suppose otherwise.
And that’s one of many actual advantages which can be there as a result of in a battle recreation, you may have completely different corporations which can be represented. You break up the group into these completely different teams and inform them, “Assume by means of it like that firm. Take into consideration, ‘What does successful imply for this group, and the way are you going to assault our group? And, what are you considering?’”
You begin getting actually deep into that thought course of, and it generates numerous insights. Doing this evaluation inside out, actually entering into the heads of the competitors and searching on the market from their vantage level, is immensely worthwhile.
ALISON BEARD: Why do you suppose that numerous organizations battle to have interaction in that form of in-depth occupied with completely different potential futures and the place their assumptions is perhaps incorrect?
ARJAN SINGH: Lots of occasions, it’s only a perform of assets and time. ? As a result of companies are busy. They’re busy by way of executing. There’s all the time issues to do. And, numerous occasions I get pushback when corporations discuss doing battle video games they usually say, “Oh, can we do that in two hours?” And the reply is, “Nicely, you might, but it surely’s most likely not going to be excellent. To do a well-thought-out recreation, you want between a each day and a half.
And so, then there’s logistics round getting individuals collectively, particularly for those who’re doing a strategic recreation and there’s senior administration concerned. Their calendars are very guarded and arduous to get onto, not to mention asking for eight to 12 hours of their time for this. So, time and assets tends to be a part of it. And, the opposite half is cultural. Some organizations usually are not comfy having their assumptions challenged. There’s numerous construction hierarchy that comes into play. And for those who’re questioning among the senior individuals and their considering, it’s not taken the suitable approach. So, culturally it may be a difficulty, as effectively.
ALISON BEARD: What data do individuals want or ought to they be given earlier than they begin?
ARJAN SINGH: So usually for a recreation, it is best to have a briefing doc that’s bought sufficient background for everybody to be educated in an space. And one of many key distinctions is, for corporations which can be in a specific space they usually’re doing a recreation with that area that they know very well, so your pre-briefing paperwork tends to be loads lighter as a result of it’s an space that individuals are acquainted with.
For areas that corporations want to get into or construct data in a short time, video games even have a good way of doing that very, in a short time. And in these cases, the briefing paperwork could be much more complete.
Typically talking, the briefings are based mostly on market data, aggressive intelligence that you simply might need. After which, actually deep diving into the businesses and never solely the cores of apparent metrics, however actually delving deeper into earlier battles, what they’ve executed in earlier cases, different classes from historical past that may be utilized right here.
ALISON BEARD: And so, then what occurs within the precise recreation?
ARJAN SINGH: So, the sport is a collection of plenary periods adopted by breakout rooms, the place the groups work collectively. So in a typical recreation, you’d begin with an introduction. You’d give perspective by way of the subject, the core subject that you simply’re attempting to unravel, what actions you’re anticipating to come back out of it. It’s possible you’ll current a bit of a part of the briefing doc so that everybody is on the identical stage of information.
After which, you undergo a collection of workouts. And, the primary spherical you’ll usually say, “Okay. For the corporate that you simply characterize, construct a technique to win within the market and suppose by means of numerous levers that you simply’re going to make use of. But additionally, actually take into consideration, ‘What does successful imply for you? Shat does successful imply in your group?’”
As a result of in a market, regardless that you will have direct rivals, every firm normally has a special definition of successful. And so, it’s actually to know what that thought course of is, successful, after which the course of these strategic themes that they’re going to come back after.
You can too put in particular asks round, “How would you assault your group? How do you view the group, and what are the precise issues that you simply’re going to do to remove market share or gross sales or different metrics that you simply is perhaps ?” After which from that time onwards, the groups will put together their shows, they’ll come again, they’ll current. There’ll be panel of judges, probably, that may give suggestions. And the groups will usually return, they’ll revise their methods based mostly on suggestions, based mostly on how the competitors’s going to be attacking that. After which, you begin going by means of a collection of workouts that delve deeper and deeper and deeper into that entire subject space.
After which the video games, usually, they conclude on the finish with turning it round from the corporate’s perspective. And the core query there may be, “Based mostly on these rounds of wargaming and battles that you simply’ve gone by means of, what are the important thing insights that you simply’ve generated? The place do you suppose are the largest alternatives to your small business? The place are the largest dangers which can be there? The plan that you’ve proper now, are you ready for a few of these conditions?”
After which in the end, it’s actually round driving actions. And, you prioritize: “What are the core issues that must be executed proper now, proactively? What are the issues we now have to attend till they begin enjoying out within the market?” And a profitable recreation truly has names of departments or people subsequent to every of these motion objects who’re accountable and accountable for shifting that ahead.
ALISON BEARD: Yeah. That’s helpful. I feel we’ve all had the expertise of going to an off-site and brainstorming nice concepts, after which simply kind of nothing occurs after. You talked in regards to the battle for mobility that you simply did together with your college students. Are you able to give us an instance of a battle recreation that you simply’ve executed with a consumer just lately?
ARJAN SINGH: So, wargaming tends to be a quite common exercise within the pharmaceutical biotech area. I don’t suppose I do know of 1 giant pharma biotech that has not executed a battle recreation. So, all of them do it. And, a part of the rationale there may be you’re spending over a billion {dollars} to convey a drug to market. There’s vital pores and skin within the recreation. And so usually, within the pharmaceutical business, there tends to be numerous wargaming as belongings are dropped at market, finish of Part 3, finish of Part 3, Decide to File, after which as soon as they begin launching into {the marketplace}.
And so, one current recreation I’ve executed within the pharmaceutical area. And it was a possible blockbuster they’re bringing to market so their expectations are over $5 billion in income for the product. And so, the sport adopted the same construction to what I outlined. We bought into particulars. And once we began entering into situations, one of many situations that got here up within the dialogue was round, “What if the FDA doesn’t approve the product?”
And in order you possibly can think about, there was numerous opinions within the room round, “Nicely, that might by no means occur. We all know what we’re doing.” Lots of defensiveness, as effectively. And we mentioned, “Look, that is what you need to do, is to actually put together for the worst and hope for one of the best.”
And so, they went by means of the state of affairs they usually checked out, “If the FDA doesn’t approve the product, what’s going to they do?” They got here up with a playbook on what to do there. Struggle recreation was accomplished. And about lower than a 12 months later when their approval date got here up from the FDA, the product was not accredited.
And so as an alternative of panicking, as an alternative of claiming, “Oh, now what will we do?” They went and appeared on the output from the battle recreation and mentioned, “Look, we now have a playbook right here. We all know precisely what we have to do. There’s sure indicators within the information that we now have to reanalyze.” There’s these different issues that they needed to do. They form of executed on that and resubmitted it with the FDA. The product was accredited afterwards as they’d gone there.
ALISON BEARD: So it looks as if a part of the purpose is to determine the way you would possibly fail earlier than you truly do, or the way you’re going to cope with a loopy shock like COVID.
ARJAN SINGH: Precisely. The way you would possibly fail earlier than you truly do. The COVID shock was truly an attention-grabbing one. We’d executed, with the scholars in 2017, The Battle for the Traveler, which was a recreation wherein we had a few airways, American, Delta, we had the OTAs, Expedia, reserving.com. We had TripAdvisor, Marriott, which is a conventional resort chain. The entire notion is everybody’s attempting to manage the traveler and everybody’s saying, “Hey, e-book on our web site. You don’t must go some other place.” Airways now are saying, “We’ll provide you with loyalty factors for not simply flying, we’ll provide you with loyalty for bank card expenditure and eating and different components, as effectively.”
And in that recreation, apparently in 2017, we truly had the COVID state of affairs, which was the scholars had gone by means of constructing base case methods for the businesses they characterize, how they’re going to win. And, one of many issues that got here out after spherical one was each single firm that was within the room had one specific assumption that their methods had been based mostly on, which was, “The journey growth in the US is prone to proceed. And, that’s what we’ve constructed our methods on.”
And so the state of affairs we gave them, we made it very generic simply saying that, “Occasions occurred on the planet the place it’s going to have an impact of declining demand for journey by as much as 95%.” We put a remark in there from a fictional analyst saying that, “The journey growth in the US, the best way that we’ve identified it, is useless. Leisure journey’s useless, and enterprise journey goes to take about three years to get well.” So, that was basically the COVID scenario.
And the scholars’ reactions first was, “Oh, no approach. That is by no means going to occur. It’s foolish situations.” And we mentioned, “No. Undergo it.” And, each single firm needed to rework their technique and their playbook based mostly on that one assumption altering, that the market growth’s over. It’s going to be over for the following three years or so.
ALISON BEARD: So, it looks as if the output from these periods is a playbook for quite a lot of situations that then you possibly can put into motion and ensure is applied if these situations come up?
ARJAN SINGH: That’s, and that’s actually the important thing to driving actionability after a battle recreation. As you’d talked about, all of us have been to these conferences, which I name attention-grabbing, nice discussions, numerous nice thought course of that’s there. However then, it doesn’t actually result in something. Proper? And actionability, actually, from a battle recreation comes from the playbook. And, the playbook’s usually structured round, “What actions ought to a company take? What these subsequent steps are. What are the actions to take versus among the situations?”
So if state of affairs occurs, construct a playbook in response to that. Perceive the important thing insights that you simply’ve generated in your competitors, what their sizzling subjects is perhaps, what are the areas the place they’re susceptible, the place you might actually focus in on? And having all these particulars in a quite simple format, to make use of shifting ahead.
Then, the opposite profit to a playbook is that that is the output of the stakeholders within the group. So, this isn’t a 3rd celebration telling them what to do or one particular person, it’s everybody aligning as a gaggle by way of, “We perceive the core points. We perceive the place our alternatives are. We align on what our subsequent steps are going to be.” It’s a a lot faster technique to mobilize a company in the direction of a specific purpose or actions.
ALISON BEARD: Yeah. I like the purpose you made within the e-book about how consultants would possibly are available in and say, “Proper. That is what it is best to do.” After which, they’re not ever accountable for the result of what they’ve really useful. There’s an enormous distinction. And so, how usually ought to organizations repeat this course of?
ARJAN SINGH: Lots of organizations do wargaming on an annual foundation. So, among the finest at school corporations have built-in battle gaming into their planning course of, so their annual planning course of. They’ll kick that off with a battle recreation, take a look at completely different points of their aggressive surroundings, after which they get into their planning.
So, that’s form of finest observe. Relying on business, it’ll range. So for those who’re strategic points and also you’re in a conventional business, you most likely have to do one as soon as each couple of years or so. For those who’re in a fast paced space like know-how or others, you might do it annually, you might do it a number of occasions a 12 months. After which, it additionally is determined by the subject space, as effectively. So for instance, for those who’re bidding on a big contract that’s value billions of {dollars} and also you’ve bought a 18-month to 24-month gross sales cycle, I do know of corporations in these conditions, they battle recreation each week.
ALISON BEARD: Hmm. Wow.
ARJAN SINGH: Yeah. I imply, for among the massive ones, just like the Jedi contract, I do know there are some corporations that did weekly ones. When there’s $10 billion on the desk, you try to determine not solely what you’re considering, however all the important thing stakeholders, and what that battle would possibly appear like and all of the permutations and combos there, for which you’d want vital quantities of rounds of state of affairs planning and wargaming.
ALISON BEARD: Yeah. So, it sounds such as you’re saying that particular groups inside organizations may also use this course of to consider their aggressive technique on a smaller scale, like signing an enormous deal.
ARJAN SINGH: Completely. the gross sales staff can discover numerous profit from with the ability to promote extra product, meet their targets. It may possibly assist from a advertising and marketing perspective. There’ve been others, analysis and improvement, finance, technique. Lots of completely different useful areas can profit from this, however their subjects will likely be completely different. Advertising could be focused on very various things from say, R&D and others. And so, it positively has an area for various areas inside a company, in addition to for start-ups.
This isn’t only a toolkit for big organizations. The bigger organizations do spend numerous effort and time on it. This can be a quite simple toolkit that start-ups can use by way of for those who’re bootstrapped, you’re bringing a product to market, simply function play and see how the competitors’s going to react. It can save you numerous expensive errors by doing that internally earlier than you begin deploying your methods externally.
ALISON BEARD: Have you ever ever had an occasion the place a battle recreation led an organization within the incorrect route as a result of they didn’t come to the suitable conclusions?
ARJAN SINGH: There’s been a number of. Flawed route by way of optimizing belongings and prioritizing their developmental plans, it’s occurred a few occasions. And, one of many most important causes for that was round not likely having the suitable background data on the realm. It was an rising space, and they also needed to make sure assumptions on what was prone to occur.
The massive subject there was the best way that they thought of it was from their firm’s lens, not the competitors’s lens. That was a mistake that occurred, the place they ended up entering into a special route. However with monitoring and persevering with to look and having early warning indicators that you simply take a look at, you possibly can course right very, in a short time. And so in that occasion, there are specific assumptions and hypotheses that they’d in an motion plan getting out of the workshop. They began deploying it. After which in a short time, based mostly on suggestions, what they found was that they had been considering by means of it the incorrect approach, after which they course corrected pretty rapidly.
ALISON BEARD: So, you probably did discuss pushback and the truth that, particularly in rising markets, it’s arduous to foretell what’s going to occur. For these individuals who say to you, “Every thing is altering so rapidly. I have already got a lot on my plate. I feel we will develop an excellent technique with out going by means of this course of,” what do you say?
ARJAN SINGH: That’s a terrific query. That occurs numerous occasions. The time dedication and taking 15, 20, 30 individuals from work and having them in a day or two to workshop, that’s all the time a problem. And, typically it’s faster to beat it by means of simply displaying earlier examples or worth. Typically it takes time.
I had an organization that had that very same pushback. And so they didn’t do a recreation for, I feel it was nearly three years. After which lastly, they had been able to do it. As soon as they accomplished it, the primary response was, “Why didn’t we do that earlier? This might’ve saved us numerous time, effort, heartache, and assets.”
Typically corporations simply must form of undergo that entire course of to get that realization as a result of in the end it’s round blind spots and dear errors and alternatives that they may have recognized earlier. Lots of occasions the catalyst for breaking that’s if somebody within the staff’s truly been by means of a recreation. They’re the champions of speaking by means of wargaming and the advantages which can be there. That’s a course of to undergo. That’s one of many causes I wrote the e-book, was to simply educate everybody by way of the advantages of doing this and having efficient, actionable video games of their organizations.
ALISON BEARD: Arjan, thanks a lot for speaking to me at the moment.
ARJAN SINGH: Nice. Thanks.
HANNAH BATES: That was Southern Methodist College adjunct professor Arjan Singh, in dialog with Alison Beard on HBR IdeaCast. Singh is the writer of the e-book Aggressive Success: Constructing Profitable Methods with Company Struggle Video games.
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HANNAH BATES: Welcome to HBR On Technique—case research and conversations with the world’s high enterprise and administration specialists, hand-selected that will help you unlock new methods of doing enterprise.
For those who actually need to compete in your business, you need to suppose like your rivals. How would possibly they reply to your subsequent transfer? What occurs in the event that they outmaneuver you? What’s your plan then?
That is referred to as company wargaming, or aggressive simulating. And based on Southern Methodist College adjunct professor Arjan Singh, this disciplined strategy to state of affairs planning helps corporations take a look at how their methods and ways maintain up available in the market. The train additionally helps them keep away from blind spots. He talked to host Alison Beard on HBR IdeaCast in 2024 about how corporations can get began.
ALISON BEARD: Now, I do need to be delicate about this time period battle video games as a result of, as we all know, many individuals on the planet from Ukraine to Israel and Palestine are coping with precise battle proper now. However, clarify for us why you employ it and what precisely it means.
ARJAN SINGH: Struggle video games are basically gown rehearsals for corporations to actually take a look at and stress take a look at their methods earlier than they deploy them into {the marketplace}. Wargaming could be very common within the army. It crossed over into the enterprise world about 40, 50 years in the past. The terminology has caught on since then. It’s also known as aggressive simulations.
Many of the functions of wargaming within the enterprise surroundings construct on the ideas from the army so there’s numerous similarities. Clearly, the subjects are very, very completely different. It follows a really related construction by way of understanding your key aggressive panorama, your surroundings, who the important thing gamers are, what typical conditions might emerge as you’re entering into the battlefield. So very related within the army world, and it crosses over into the enterprise world very, very seamlessly.
ALISON BEARD: And the way does it differ from conventional state of affairs planning?
ARJAN SINGH: So conventional state of affairs planning, the notion there may be actually round considering by means of completely different outcomes that will occur in a aggressive surroundings. You hope for one of the best, however you put together for the worst, and you’re employed out methods constructed on these various worlds which can be there.
Wargaming takes situations to a different ingredient. So it’s not nearly what’s attainable sooner or later, however then the wargaming provides layers on by way of the probably actions of key rivals and stakeholders within the market. After which, the actions that an organization ought to absorb response to that, as effectively. So, it actually drives house the actionability and shifting it past an mental train to actually pragmatic subsequent steps for organizations to actually convey them to life.
ALISON BEARD: So, give me an instance of a battle recreation train that you simply would possibly give your college students.
ARJAN SINGH: So, the one which we’re working presently at SMU is The Battle for Mobility. And so, the entire notion there and the central theme there may be round, “Who’s going to manage mobility sooner or later?” And so, we’ve bought six completely different groups which can be represented there. We’ve bought a number of conventional automakers like GM, Volkswagen, Toyota. Now we have next-generation suppliers like Tesla. We’ve bought Uber, in addition to Waymo, represented there. And, the entire notion there may be round, “Who’s going to win on this battle, the battle for mobility? What is going to mobility appear like sooner or later? And what if the world evolves to a scenario the place there’s nonownership of automobiles, applied sciences, AI? How would that have an effect on how individuals commute and use transportation sooner or later?”
ALISON BEARD: So, that concept of “the battle for” is perhaps how corporations or groups must be occupied with it, the battle for this specific market or this group of shoppers?
ARJAN SINGH: Yeah. Precisely. It’s actually across the battles. But additionally, round defining what that battle is and the way do you outline your business and the battle place and who you’re competing in opposition to?
So, I’ll provide you with an instance. Once we went into the COVID scenario, everybody was at house and bought acquainted with on-line collaboration toolkits. And once we bought again into the submit pandemic world, enterprise journey got here again with an enormous pressure. And so while you take a look at conventional rivals, you might see the airways are competing with different airways and different transportation suppliers.
However then on this new actuality, there have been numerous different competitors. So it was American Airways, Zoom, Microsoft Groups, the digital world versus the precise necessity to have the ability to go journey. And so, definition is admittedly, actually vital by way of what that aggressive set seems like. Corporations that outline it too narrowly can find yourself in conditions the place they might be blindsided by new rivals coming in. And so, that definition’s actually, actually vital by way of what that battle will likely be.
ALISON BEARD: What are the main kinds of video games or situations that you simply educate your college students and you employ with purchasers?
ARJAN SINGH: So while you take a look at wargaming, it actually suits into three completely different ranges. There’s strategic battle video games, which is admittedly anchored round long-term technique, how core macroeconomic tendencies are altering the aggressive surroundings. And so they’re basically answering the query, “What is going to the sport be sooner or later?” That tends to be far more senior stage executives that may become involved in strategic video games.
The following stage down is operational video games. And while you’ve bought an outlined area, you’ve bought outlined rivals. And it’s actually considering by means of the place to play, “What areas does an organization must be competing in?”
And then you definitely get down into the executional kind of video games, that are the tactical video games. So, these are typically a lot shorter time period. This tends to be centered in on promoting and normally has a one to 2 12 months time horizon. The core query there may be actually round, “Tips on how to win, how will we promote extra product within the market, how will we message in opposition to our competitors, and the way will we in the end find yourself successful in that area?”
ALISON BEARD: Yeah. After which, how do you give you the precise situations?
ARJAN SINGH: So, situations is an space which… It’s been very effectively documented and written about within the enterprise world. There’s alternative ways of situations. Situations may be quite simple. So, it might be so simple as having the group that’s in a battle recreation brainstorm a set of key issues that will have an effect on the surroundings. After which, voting on it and prioritizing which of them they want to handle. At its most straightforward kind, it’s a really fast train. It may possibly take a couple of minutes.
The standards for situations is admittedly round impactful conditions. So, issues that may impact a competitor surroundings and actually considering of it from an impression perspective, not chance, since you actually need to play out the situations that would be the most impactful.
ALISON BEARD: So while you’re promoting this proposition of wargaming to your college students and to purchasers, what particular alternatives do you level to that it will yield versus different kinds of strategic planning? After which, what particular issues or dangers do you see it serving to corporations overcome?
ARJAN SINGH: Yeah. The chance a part of wargaming is admittedly round serving to corporations keep away from blind spots. This tends to occur loads with incumbent gamers which have giant market shares. The perspective tends to be, “That is how the business is. We’re skilled on this area and we all know it effectively, therefore our success. And, we count on this to proceed.” There’s numerous enterprise college examples and case research of how that’s led to the downfall of numerous corporations, together with numerous iconic names which can be there. So, it helps-
ALISON BEARD: Kodak, Blockbuster, all of these.
ARJAN SINGH: Precisely. And so, this can be a discussion board for having these conversations. And, it’s significantly vital when the conversations are going to be uncomfortable. It’s going to problem the established order. It’s going to make a company suppose otherwise.
And that’s one of many actual advantages which can be there as a result of in a battle recreation, you may have completely different corporations which can be represented. You break up the group into these completely different teams and inform them, “Assume by means of it like that firm. Take into consideration, ‘What does successful imply for this group, and the way are you going to assault our group? And, what are you considering?’”
You begin getting actually deep into that thought course of, and it generates numerous insights. Doing this evaluation inside out, actually entering into the heads of the competitors and searching on the market from their vantage level, is immensely worthwhile.
ALISON BEARD: Why do you suppose that numerous organizations battle to have interaction in that form of in-depth occupied with completely different potential futures and the place their assumptions is perhaps incorrect?
ARJAN SINGH: Lots of occasions, it’s only a perform of assets and time. ? As a result of companies are busy. They’re busy by way of executing. There’s all the time issues to do. And, numerous occasions I get pushback when corporations discuss doing battle video games they usually say, “Oh, can we do that in two hours?” And the reply is, “Nicely, you might, but it surely’s most likely not going to be excellent. To do a well-thought-out recreation, you want between a each day and a half.
And so, then there’s logistics round getting individuals collectively, particularly for those who’re doing a strategic recreation and there’s senior administration concerned. Their calendars are very guarded and arduous to get onto, not to mention asking for eight to 12 hours of their time for this. So, time and assets tends to be a part of it. And, the opposite half is cultural. Some organizations usually are not comfy having their assumptions challenged. There’s numerous construction hierarchy that comes into play. And for those who’re questioning among the senior individuals and their considering, it’s not taken the suitable approach. So, culturally it may be a difficulty, as effectively.
ALISON BEARD: What data do individuals want or ought to they be given earlier than they begin?
ARJAN SINGH: So usually for a recreation, it is best to have a briefing doc that’s bought sufficient background for everybody to be educated in an space. And one of many key distinctions is, for corporations which can be in a specific space they usually’re doing a recreation with that area that they know very well, so your pre-briefing paperwork tends to be loads lighter as a result of it’s an space that individuals are acquainted with.
For areas that corporations want to get into or construct data in a short time, video games even have a good way of doing that very, in a short time. And in these cases, the briefing paperwork could be much more complete.
Typically talking, the briefings are based mostly on market data, aggressive intelligence that you simply might need. After which, actually deep diving into the businesses and never solely the cores of apparent metrics, however actually delving deeper into earlier battles, what they’ve executed in earlier cases, different classes from historical past that may be utilized right here.
ALISON BEARD: And so, then what occurs within the precise recreation?
ARJAN SINGH: So, the sport is a collection of plenary periods adopted by breakout rooms, the place the groups work collectively. So in a typical recreation, you’d begin with an introduction. You’d give perspective by way of the subject, the core subject that you simply’re attempting to unravel, what actions you’re anticipating to come back out of it. It’s possible you’ll current a bit of a part of the briefing doc so that everybody is on the identical stage of information.
After which, you undergo a collection of workouts. And, the primary spherical you’ll usually say, “Okay. For the corporate that you simply characterize, construct a technique to win within the market and suppose by means of numerous levers that you simply’re going to make use of. But additionally, actually take into consideration, ‘What does successful imply for you? Shat does successful imply in your group?’”
As a result of in a market, regardless that you will have direct rivals, every firm normally has a special definition of successful. And so, it’s actually to know what that thought course of is, successful, after which the course of these strategic themes that they’re going to come back after.
You can too put in particular asks round, “How would you assault your group? How do you view the group, and what are the precise issues that you simply’re going to do to remove market share or gross sales or different metrics that you simply is perhaps ?” After which from that time onwards, the groups will put together their shows, they’ll come again, they’ll current. There’ll be panel of judges, probably, that may give suggestions. And the groups will usually return, they’ll revise their methods based mostly on suggestions, based mostly on how the competitors’s going to be attacking that. After which, you begin going by means of a collection of workouts that delve deeper and deeper and deeper into that entire subject space.
After which the video games, usually, they conclude on the finish with turning it round from the corporate’s perspective. And the core query there may be, “Based mostly on these rounds of wargaming and battles that you simply’ve gone by means of, what are the important thing insights that you simply’ve generated? The place do you suppose are the largest alternatives to your small business? The place are the largest dangers which can be there? The plan that you’ve proper now, are you ready for a few of these conditions?”
After which in the end, it’s actually round driving actions. And, you prioritize: “What are the core issues that must be executed proper now, proactively? What are the issues we now have to attend till they begin enjoying out within the market?” And a profitable recreation truly has names of departments or people subsequent to every of these motion objects who’re accountable and accountable for shifting that ahead.
ALISON BEARD: Yeah. That’s helpful. I feel we’ve all had the expertise of going to an off-site and brainstorming nice concepts, after which simply kind of nothing occurs after. You talked in regards to the battle for mobility that you simply did together with your college students. Are you able to give us an instance of a battle recreation that you simply’ve executed with a consumer just lately?
ARJAN SINGH: So, wargaming tends to be a quite common exercise within the pharmaceutical biotech area. I don’t suppose I do know of 1 giant pharma biotech that has not executed a battle recreation. So, all of them do it. And, a part of the rationale there may be you’re spending over a billion {dollars} to convey a drug to market. There’s vital pores and skin within the recreation. And so usually, within the pharmaceutical business, there tends to be numerous wargaming as belongings are dropped at market, finish of Part 3, finish of Part 3, Decide to File, after which as soon as they begin launching into {the marketplace}.
And so, one current recreation I’ve executed within the pharmaceutical area. And it was a possible blockbuster they’re bringing to market so their expectations are over $5 billion in income for the product. And so, the sport adopted the same construction to what I outlined. We bought into particulars. And once we began entering into situations, one of many situations that got here up within the dialogue was round, “What if the FDA doesn’t approve the product?”
And in order you possibly can think about, there was numerous opinions within the room round, “Nicely, that might by no means occur. We all know what we’re doing.” Lots of defensiveness, as effectively. And we mentioned, “Look, that is what you need to do, is to actually put together for the worst and hope for one of the best.”
And so, they went by means of the state of affairs they usually checked out, “If the FDA doesn’t approve the product, what’s going to they do?” They got here up with a playbook on what to do there. Struggle recreation was accomplished. And about lower than a 12 months later when their approval date got here up from the FDA, the product was not accredited.
And so as an alternative of panicking, as an alternative of claiming, “Oh, now what will we do?” They went and appeared on the output from the battle recreation and mentioned, “Look, we now have a playbook right here. We all know precisely what we have to do. There’s sure indicators within the information that we now have to reanalyze.” There’s these different issues that they needed to do. They form of executed on that and resubmitted it with the FDA. The product was accredited afterwards as they’d gone there.
ALISON BEARD: So it looks as if a part of the purpose is to determine the way you would possibly fail earlier than you truly do, or the way you’re going to cope with a loopy shock like COVID.
ARJAN SINGH: Precisely. The way you would possibly fail earlier than you truly do. The COVID shock was truly an attention-grabbing one. We’d executed, with the scholars in 2017, The Battle for the Traveler, which was a recreation wherein we had a few airways, American, Delta, we had the OTAs, Expedia, reserving.com. We had TripAdvisor, Marriott, which is a conventional resort chain. The entire notion is everybody’s attempting to manage the traveler and everybody’s saying, “Hey, e-book on our web site. You don’t must go some other place.” Airways now are saying, “We’ll provide you with loyalty factors for not simply flying, we’ll provide you with loyalty for bank card expenditure and eating and different components, as effectively.”
And in that recreation, apparently in 2017, we truly had the COVID state of affairs, which was the scholars had gone by means of constructing base case methods for the businesses they characterize, how they’re going to win. And, one of many issues that got here out after spherical one was each single firm that was within the room had one specific assumption that their methods had been based mostly on, which was, “The journey growth in the US is prone to proceed. And, that’s what we’ve constructed our methods on.”
And so the state of affairs we gave them, we made it very generic simply saying that, “Occasions occurred on the planet the place it’s going to have an impact of declining demand for journey by as much as 95%.” We put a remark in there from a fictional analyst saying that, “The journey growth in the US, the best way that we’ve identified it, is useless. Leisure journey’s useless, and enterprise journey goes to take about three years to get well.” So, that was basically the COVID scenario.
And the scholars’ reactions first was, “Oh, no approach. That is by no means going to occur. It’s foolish situations.” And we mentioned, “No. Undergo it.” And, each single firm needed to rework their technique and their playbook based mostly on that one assumption altering, that the market growth’s over. It’s going to be over for the following three years or so.
ALISON BEARD: So, it looks as if the output from these periods is a playbook for quite a lot of situations that then you possibly can put into motion and ensure is applied if these situations come up?
ARJAN SINGH: That’s, and that’s actually the important thing to driving actionability after a battle recreation. As you’d talked about, all of us have been to these conferences, which I name attention-grabbing, nice discussions, numerous nice thought course of that’s there. However then, it doesn’t actually result in something. Proper? And actionability, actually, from a battle recreation comes from the playbook. And, the playbook’s usually structured round, “What actions ought to a company take? What these subsequent steps are. What are the actions to take versus among the situations?”
So if state of affairs occurs, construct a playbook in response to that. Perceive the important thing insights that you simply’ve generated in your competitors, what their sizzling subjects is perhaps, what are the areas the place they’re susceptible, the place you might actually focus in on? And having all these particulars in a quite simple format, to make use of shifting ahead.
Then, the opposite profit to a playbook is that that is the output of the stakeholders within the group. So, this isn’t a 3rd celebration telling them what to do or one particular person, it’s everybody aligning as a gaggle by way of, “We perceive the core points. We perceive the place our alternatives are. We align on what our subsequent steps are going to be.” It’s a a lot faster technique to mobilize a company in the direction of a specific purpose or actions.
ALISON BEARD: Yeah. I like the purpose you made within the e-book about how consultants would possibly are available in and say, “Proper. That is what it is best to do.” After which, they’re not ever accountable for the result of what they’ve really useful. There’s an enormous distinction. And so, how usually ought to organizations repeat this course of?
ARJAN SINGH: Lots of organizations do wargaming on an annual foundation. So, among the finest at school corporations have built-in battle gaming into their planning course of, so their annual planning course of. They’ll kick that off with a battle recreation, take a look at completely different points of their aggressive surroundings, after which they get into their planning.
So, that’s form of finest observe. Relying on business, it’ll range. So for those who’re strategic points and also you’re in a conventional business, you most likely have to do one as soon as each couple of years or so. For those who’re in a fast paced space like know-how or others, you might do it annually, you might do it a number of occasions a 12 months. After which, it additionally is determined by the subject space, as effectively. So for instance, for those who’re bidding on a big contract that’s value billions of {dollars} and also you’ve bought a 18-month to 24-month gross sales cycle, I do know of corporations in these conditions, they battle recreation each week.
ALISON BEARD: Hmm. Wow.
ARJAN SINGH: Yeah. I imply, for among the massive ones, just like the Jedi contract, I do know there are some corporations that did weekly ones. When there’s $10 billion on the desk, you try to determine not solely what you’re considering, however all the important thing stakeholders, and what that battle would possibly appear like and all of the permutations and combos there, for which you’d want vital quantities of rounds of state of affairs planning and wargaming.
ALISON BEARD: Yeah. So, it sounds such as you’re saying that particular groups inside organizations may also use this course of to consider their aggressive technique on a smaller scale, like signing an enormous deal.
ARJAN SINGH: Completely. the gross sales staff can discover numerous profit from with the ability to promote extra product, meet their targets. It may possibly assist from a advertising and marketing perspective. There’ve been others, analysis and improvement, finance, technique. Lots of completely different useful areas can profit from this, however their subjects will likely be completely different. Advertising could be focused on very various things from say, R&D and others. And so, it positively has an area for various areas inside a company, in addition to for start-ups.
This isn’t only a toolkit for big organizations. The bigger organizations do spend numerous effort and time on it. This can be a quite simple toolkit that start-ups can use by way of for those who’re bootstrapped, you’re bringing a product to market, simply function play and see how the competitors’s going to react. It can save you numerous expensive errors by doing that internally earlier than you begin deploying your methods externally.
ALISON BEARD: Have you ever ever had an occasion the place a battle recreation led an organization within the incorrect route as a result of they didn’t come to the suitable conclusions?
ARJAN SINGH: There’s been a number of. Flawed route by way of optimizing belongings and prioritizing their developmental plans, it’s occurred a few occasions. And, one of many most important causes for that was round not likely having the suitable background data on the realm. It was an rising space, and they also needed to make sure assumptions on what was prone to occur.
The massive subject there was the best way that they thought of it was from their firm’s lens, not the competitors’s lens. That was a mistake that occurred, the place they ended up entering into a special route. However with monitoring and persevering with to look and having early warning indicators that you simply take a look at, you possibly can course right very, in a short time. And so in that occasion, there are specific assumptions and hypotheses that they’d in an motion plan getting out of the workshop. They began deploying it. After which in a short time, based mostly on suggestions, what they found was that they had been considering by means of it the incorrect approach, after which they course corrected pretty rapidly.
ALISON BEARD: So, you probably did discuss pushback and the truth that, particularly in rising markets, it’s arduous to foretell what’s going to occur. For these individuals who say to you, “Every thing is altering so rapidly. I have already got a lot on my plate. I feel we will develop an excellent technique with out going by means of this course of,” what do you say?
ARJAN SINGH: That’s a terrific query. That occurs numerous occasions. The time dedication and taking 15, 20, 30 individuals from work and having them in a day or two to workshop, that’s all the time a problem. And, typically it’s faster to beat it by means of simply displaying earlier examples or worth. Typically it takes time.
I had an organization that had that very same pushback. And so they didn’t do a recreation for, I feel it was nearly three years. After which lastly, they had been able to do it. As soon as they accomplished it, the primary response was, “Why didn’t we do that earlier? This might’ve saved us numerous time, effort, heartache, and assets.”
Typically corporations simply must form of undergo that entire course of to get that realization as a result of in the end it’s round blind spots and dear errors and alternatives that they may have recognized earlier. Lots of occasions the catalyst for breaking that’s if somebody within the staff’s truly been by means of a recreation. They’re the champions of speaking by means of wargaming and the advantages which can be there. That’s a course of to undergo. That’s one of many causes I wrote the e-book, was to simply educate everybody by way of the advantages of doing this and having efficient, actionable video games of their organizations.
ALISON BEARD: Arjan, thanks a lot for speaking to me at the moment.
ARJAN SINGH: Nice. Thanks.
HANNAH BATES: That was Southern Methodist College adjunct professor Arjan Singh, in dialog with Alison Beard on HBR IdeaCast. Singh is the writer of the e-book Aggressive Success: Constructing Profitable Methods with Company Struggle Video games.
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This episode was produced by Mary Dooe and me, Hannah Bates. Curt Nickisch is our editor. Particular because of Ian Fox, Maureen Hoch, Erica Truxler, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and also you – our listener. See you subsequent week.
HANNAH BATES: Welcome to HBR On Technique—case research and conversations with the world’s high enterprise and administration specialists, hand-selected that will help you unlock new methods of doing enterprise.
For those who actually need to compete in your business, you need to suppose like your rivals. How would possibly they reply to your subsequent transfer? What occurs in the event that they outmaneuver you? What’s your plan then?
That is referred to as company wargaming, or aggressive simulating. And based on Southern Methodist College adjunct professor Arjan Singh, this disciplined strategy to state of affairs planning helps corporations take a look at how their methods and ways maintain up available in the market. The train additionally helps them keep away from blind spots. He talked to host Alison Beard on HBR IdeaCast in 2024 about how corporations can get began.
ALISON BEARD: Now, I do need to be delicate about this time period battle video games as a result of, as we all know, many individuals on the planet from Ukraine to Israel and Palestine are coping with precise battle proper now. However, clarify for us why you employ it and what precisely it means.
ARJAN SINGH: Struggle video games are basically gown rehearsals for corporations to actually take a look at and stress take a look at their methods earlier than they deploy them into {the marketplace}. Wargaming could be very common within the army. It crossed over into the enterprise world about 40, 50 years in the past. The terminology has caught on since then. It’s also known as aggressive simulations.
Many of the functions of wargaming within the enterprise surroundings construct on the ideas from the army so there’s numerous similarities. Clearly, the subjects are very, very completely different. It follows a really related construction by way of understanding your key aggressive panorama, your surroundings, who the important thing gamers are, what typical conditions might emerge as you’re entering into the battlefield. So very related within the army world, and it crosses over into the enterprise world very, very seamlessly.
ALISON BEARD: And the way does it differ from conventional state of affairs planning?
ARJAN SINGH: So conventional state of affairs planning, the notion there may be actually round considering by means of completely different outcomes that will occur in a aggressive surroundings. You hope for one of the best, however you put together for the worst, and you’re employed out methods constructed on these various worlds which can be there.
Wargaming takes situations to a different ingredient. So it’s not nearly what’s attainable sooner or later, however then the wargaming provides layers on by way of the probably actions of key rivals and stakeholders within the market. After which, the actions that an organization ought to absorb response to that, as effectively. So, it actually drives house the actionability and shifting it past an mental train to actually pragmatic subsequent steps for organizations to actually convey them to life.
ALISON BEARD: So, give me an instance of a battle recreation train that you simply would possibly give your college students.
ARJAN SINGH: So, the one which we’re working presently at SMU is The Battle for Mobility. And so, the entire notion there and the central theme there may be round, “Who’s going to manage mobility sooner or later?” And so, we’ve bought six completely different groups which can be represented there. We’ve bought a number of conventional automakers like GM, Volkswagen, Toyota. Now we have next-generation suppliers like Tesla. We’ve bought Uber, in addition to Waymo, represented there. And, the entire notion there may be round, “Who’s going to win on this battle, the battle for mobility? What is going to mobility appear like sooner or later? And what if the world evolves to a scenario the place there’s nonownership of automobiles, applied sciences, AI? How would that have an effect on how individuals commute and use transportation sooner or later?”
ALISON BEARD: So, that concept of “the battle for” is perhaps how corporations or groups must be occupied with it, the battle for this specific market or this group of shoppers?
ARJAN SINGH: Yeah. Precisely. It’s actually across the battles. But additionally, round defining what that battle is and the way do you outline your business and the battle place and who you’re competing in opposition to?
So, I’ll provide you with an instance. Once we went into the COVID scenario, everybody was at house and bought acquainted with on-line collaboration toolkits. And once we bought again into the submit pandemic world, enterprise journey got here again with an enormous pressure. And so while you take a look at conventional rivals, you might see the airways are competing with different airways and different transportation suppliers.
However then on this new actuality, there have been numerous different competitors. So it was American Airways, Zoom, Microsoft Groups, the digital world versus the precise necessity to have the ability to go journey. And so, definition is admittedly, actually vital by way of what that aggressive set seems like. Corporations that outline it too narrowly can find yourself in conditions the place they might be blindsided by new rivals coming in. And so, that definition’s actually, actually vital by way of what that battle will likely be.
ALISON BEARD: What are the main kinds of video games or situations that you simply educate your college students and you employ with purchasers?
ARJAN SINGH: So while you take a look at wargaming, it actually suits into three completely different ranges. There’s strategic battle video games, which is admittedly anchored round long-term technique, how core macroeconomic tendencies are altering the aggressive surroundings. And so they’re basically answering the query, “What is going to the sport be sooner or later?” That tends to be far more senior stage executives that may become involved in strategic video games.
The following stage down is operational video games. And while you’ve bought an outlined area, you’ve bought outlined rivals. And it’s actually considering by means of the place to play, “What areas does an organization must be competing in?”
And then you definitely get down into the executional kind of video games, that are the tactical video games. So, these are typically a lot shorter time period. This tends to be centered in on promoting and normally has a one to 2 12 months time horizon. The core query there may be actually round, “Tips on how to win, how will we promote extra product within the market, how will we message in opposition to our competitors, and the way will we in the end find yourself successful in that area?”
ALISON BEARD: Yeah. After which, how do you give you the precise situations?
ARJAN SINGH: So, situations is an space which… It’s been very effectively documented and written about within the enterprise world. There’s alternative ways of situations. Situations may be quite simple. So, it might be so simple as having the group that’s in a battle recreation brainstorm a set of key issues that will have an effect on the surroundings. After which, voting on it and prioritizing which of them they want to handle. At its most straightforward kind, it’s a really fast train. It may possibly take a couple of minutes.
The standards for situations is admittedly round impactful conditions. So, issues that may impact a competitor surroundings and actually considering of it from an impression perspective, not chance, since you actually need to play out the situations that would be the most impactful.
ALISON BEARD: So while you’re promoting this proposition of wargaming to your college students and to purchasers, what particular alternatives do you level to that it will yield versus different kinds of strategic planning? After which, what particular issues or dangers do you see it serving to corporations overcome?
ARJAN SINGH: Yeah. The chance a part of wargaming is admittedly round serving to corporations keep away from blind spots. This tends to occur loads with incumbent gamers which have giant market shares. The perspective tends to be, “That is how the business is. We’re skilled on this area and we all know it effectively, therefore our success. And, we count on this to proceed.” There’s numerous enterprise college examples and case research of how that’s led to the downfall of numerous corporations, together with numerous iconic names which can be there. So, it helps-
ALISON BEARD: Kodak, Blockbuster, all of these.
ARJAN SINGH: Precisely. And so, this can be a discussion board for having these conversations. And, it’s significantly vital when the conversations are going to be uncomfortable. It’s going to problem the established order. It’s going to make a company suppose otherwise.
And that’s one of many actual advantages which can be there as a result of in a battle recreation, you may have completely different corporations which can be represented. You break up the group into these completely different teams and inform them, “Assume by means of it like that firm. Take into consideration, ‘What does successful imply for this group, and the way are you going to assault our group? And, what are you considering?’”
You begin getting actually deep into that thought course of, and it generates numerous insights. Doing this evaluation inside out, actually entering into the heads of the competitors and searching on the market from their vantage level, is immensely worthwhile.
ALISON BEARD: Why do you suppose that numerous organizations battle to have interaction in that form of in-depth occupied with completely different potential futures and the place their assumptions is perhaps incorrect?
ARJAN SINGH: Lots of occasions, it’s only a perform of assets and time. ? As a result of companies are busy. They’re busy by way of executing. There’s all the time issues to do. And, numerous occasions I get pushback when corporations discuss doing battle video games they usually say, “Oh, can we do that in two hours?” And the reply is, “Nicely, you might, but it surely’s most likely not going to be excellent. To do a well-thought-out recreation, you want between a each day and a half.
And so, then there’s logistics round getting individuals collectively, particularly for those who’re doing a strategic recreation and there’s senior administration concerned. Their calendars are very guarded and arduous to get onto, not to mention asking for eight to 12 hours of their time for this. So, time and assets tends to be a part of it. And, the opposite half is cultural. Some organizations usually are not comfy having their assumptions challenged. There’s numerous construction hierarchy that comes into play. And for those who’re questioning among the senior individuals and their considering, it’s not taken the suitable approach. So, culturally it may be a difficulty, as effectively.
ALISON BEARD: What data do individuals want or ought to they be given earlier than they begin?
ARJAN SINGH: So usually for a recreation, it is best to have a briefing doc that’s bought sufficient background for everybody to be educated in an space. And one of many key distinctions is, for corporations which can be in a specific space they usually’re doing a recreation with that area that they know very well, so your pre-briefing paperwork tends to be loads lighter as a result of it’s an space that individuals are acquainted with.
For areas that corporations want to get into or construct data in a short time, video games even have a good way of doing that very, in a short time. And in these cases, the briefing paperwork could be much more complete.
Typically talking, the briefings are based mostly on market data, aggressive intelligence that you simply might need. After which, actually deep diving into the businesses and never solely the cores of apparent metrics, however actually delving deeper into earlier battles, what they’ve executed in earlier cases, different classes from historical past that may be utilized right here.
ALISON BEARD: And so, then what occurs within the precise recreation?
ARJAN SINGH: So, the sport is a collection of plenary periods adopted by breakout rooms, the place the groups work collectively. So in a typical recreation, you’d begin with an introduction. You’d give perspective by way of the subject, the core subject that you simply’re attempting to unravel, what actions you’re anticipating to come back out of it. It’s possible you’ll current a bit of a part of the briefing doc so that everybody is on the identical stage of information.
After which, you undergo a collection of workouts. And, the primary spherical you’ll usually say, “Okay. For the corporate that you simply characterize, construct a technique to win within the market and suppose by means of numerous levers that you simply’re going to make use of. But additionally, actually take into consideration, ‘What does successful imply for you? Shat does successful imply in your group?’”
As a result of in a market, regardless that you will have direct rivals, every firm normally has a special definition of successful. And so, it’s actually to know what that thought course of is, successful, after which the course of these strategic themes that they’re going to come back after.
You can too put in particular asks round, “How would you assault your group? How do you view the group, and what are the precise issues that you simply’re going to do to remove market share or gross sales or different metrics that you simply is perhaps ?” After which from that time onwards, the groups will put together their shows, they’ll come again, they’ll current. There’ll be panel of judges, probably, that may give suggestions. And the groups will usually return, they’ll revise their methods based mostly on suggestions, based mostly on how the competitors’s going to be attacking that. After which, you begin going by means of a collection of workouts that delve deeper and deeper and deeper into that entire subject space.
After which the video games, usually, they conclude on the finish with turning it round from the corporate’s perspective. And the core query there may be, “Based mostly on these rounds of wargaming and battles that you simply’ve gone by means of, what are the important thing insights that you simply’ve generated? The place do you suppose are the largest alternatives to your small business? The place are the largest dangers which can be there? The plan that you’ve proper now, are you ready for a few of these conditions?”
After which in the end, it’s actually round driving actions. And, you prioritize: “What are the core issues that must be executed proper now, proactively? What are the issues we now have to attend till they begin enjoying out within the market?” And a profitable recreation truly has names of departments or people subsequent to every of these motion objects who’re accountable and accountable for shifting that ahead.
ALISON BEARD: Yeah. That’s helpful. I feel we’ve all had the expertise of going to an off-site and brainstorming nice concepts, after which simply kind of nothing occurs after. You talked in regards to the battle for mobility that you simply did together with your college students. Are you able to give us an instance of a battle recreation that you simply’ve executed with a consumer just lately?
ARJAN SINGH: So, wargaming tends to be a quite common exercise within the pharmaceutical biotech area. I don’t suppose I do know of 1 giant pharma biotech that has not executed a battle recreation. So, all of them do it. And, a part of the rationale there may be you’re spending over a billion {dollars} to convey a drug to market. There’s vital pores and skin within the recreation. And so usually, within the pharmaceutical business, there tends to be numerous wargaming as belongings are dropped at market, finish of Part 3, finish of Part 3, Decide to File, after which as soon as they begin launching into {the marketplace}.
And so, one current recreation I’ve executed within the pharmaceutical area. And it was a possible blockbuster they’re bringing to market so their expectations are over $5 billion in income for the product. And so, the sport adopted the same construction to what I outlined. We bought into particulars. And once we began entering into situations, one of many situations that got here up within the dialogue was round, “What if the FDA doesn’t approve the product?”
And in order you possibly can think about, there was numerous opinions within the room round, “Nicely, that might by no means occur. We all know what we’re doing.” Lots of defensiveness, as effectively. And we mentioned, “Look, that is what you need to do, is to actually put together for the worst and hope for one of the best.”
And so, they went by means of the state of affairs they usually checked out, “If the FDA doesn’t approve the product, what’s going to they do?” They got here up with a playbook on what to do there. Struggle recreation was accomplished. And about lower than a 12 months later when their approval date got here up from the FDA, the product was not accredited.
And so as an alternative of panicking, as an alternative of claiming, “Oh, now what will we do?” They went and appeared on the output from the battle recreation and mentioned, “Look, we now have a playbook right here. We all know precisely what we have to do. There’s sure indicators within the information that we now have to reanalyze.” There’s these different issues that they needed to do. They form of executed on that and resubmitted it with the FDA. The product was accredited afterwards as they’d gone there.
ALISON BEARD: So it looks as if a part of the purpose is to determine the way you would possibly fail earlier than you truly do, or the way you’re going to cope with a loopy shock like COVID.
ARJAN SINGH: Precisely. The way you would possibly fail earlier than you truly do. The COVID shock was truly an attention-grabbing one. We’d executed, with the scholars in 2017, The Battle for the Traveler, which was a recreation wherein we had a few airways, American, Delta, we had the OTAs, Expedia, reserving.com. We had TripAdvisor, Marriott, which is a conventional resort chain. The entire notion is everybody’s attempting to manage the traveler and everybody’s saying, “Hey, e-book on our web site. You don’t must go some other place.” Airways now are saying, “We’ll provide you with loyalty factors for not simply flying, we’ll provide you with loyalty for bank card expenditure and eating and different components, as effectively.”
And in that recreation, apparently in 2017, we truly had the COVID state of affairs, which was the scholars had gone by means of constructing base case methods for the businesses they characterize, how they’re going to win. And, one of many issues that got here out after spherical one was each single firm that was within the room had one specific assumption that their methods had been based mostly on, which was, “The journey growth in the US is prone to proceed. And, that’s what we’ve constructed our methods on.”
And so the state of affairs we gave them, we made it very generic simply saying that, “Occasions occurred on the planet the place it’s going to have an impact of declining demand for journey by as much as 95%.” We put a remark in there from a fictional analyst saying that, “The journey growth in the US, the best way that we’ve identified it, is useless. Leisure journey’s useless, and enterprise journey goes to take about three years to get well.” So, that was basically the COVID scenario.
And the scholars’ reactions first was, “Oh, no approach. That is by no means going to occur. It’s foolish situations.” And we mentioned, “No. Undergo it.” And, each single firm needed to rework their technique and their playbook based mostly on that one assumption altering, that the market growth’s over. It’s going to be over for the following three years or so.
ALISON BEARD: So, it looks as if the output from these periods is a playbook for quite a lot of situations that then you possibly can put into motion and ensure is applied if these situations come up?
ARJAN SINGH: That’s, and that’s actually the important thing to driving actionability after a battle recreation. As you’d talked about, all of us have been to these conferences, which I name attention-grabbing, nice discussions, numerous nice thought course of that’s there. However then, it doesn’t actually result in something. Proper? And actionability, actually, from a battle recreation comes from the playbook. And, the playbook’s usually structured round, “What actions ought to a company take? What these subsequent steps are. What are the actions to take versus among the situations?”
So if state of affairs occurs, construct a playbook in response to that. Perceive the important thing insights that you simply’ve generated in your competitors, what their sizzling subjects is perhaps, what are the areas the place they’re susceptible, the place you might actually focus in on? And having all these particulars in a quite simple format, to make use of shifting ahead.
Then, the opposite profit to a playbook is that that is the output of the stakeholders within the group. So, this isn’t a 3rd celebration telling them what to do or one particular person, it’s everybody aligning as a gaggle by way of, “We perceive the core points. We perceive the place our alternatives are. We align on what our subsequent steps are going to be.” It’s a a lot faster technique to mobilize a company in the direction of a specific purpose or actions.
ALISON BEARD: Yeah. I like the purpose you made within the e-book about how consultants would possibly are available in and say, “Proper. That is what it is best to do.” After which, they’re not ever accountable for the result of what they’ve really useful. There’s an enormous distinction. And so, how usually ought to organizations repeat this course of?
ARJAN SINGH: Lots of organizations do wargaming on an annual foundation. So, among the finest at school corporations have built-in battle gaming into their planning course of, so their annual planning course of. They’ll kick that off with a battle recreation, take a look at completely different points of their aggressive surroundings, after which they get into their planning.
So, that’s form of finest observe. Relying on business, it’ll range. So for those who’re strategic points and also you’re in a conventional business, you most likely have to do one as soon as each couple of years or so. For those who’re in a fast paced space like know-how or others, you might do it annually, you might do it a number of occasions a 12 months. After which, it additionally is determined by the subject space, as effectively. So for instance, for those who’re bidding on a big contract that’s value billions of {dollars} and also you’ve bought a 18-month to 24-month gross sales cycle, I do know of corporations in these conditions, they battle recreation each week.
ALISON BEARD: Hmm. Wow.
ARJAN SINGH: Yeah. I imply, for among the massive ones, just like the Jedi contract, I do know there are some corporations that did weekly ones. When there’s $10 billion on the desk, you try to determine not solely what you’re considering, however all the important thing stakeholders, and what that battle would possibly appear like and all of the permutations and combos there, for which you’d want vital quantities of rounds of state of affairs planning and wargaming.
ALISON BEARD: Yeah. So, it sounds such as you’re saying that particular groups inside organizations may also use this course of to consider their aggressive technique on a smaller scale, like signing an enormous deal.
ARJAN SINGH: Completely. the gross sales staff can discover numerous profit from with the ability to promote extra product, meet their targets. It may possibly assist from a advertising and marketing perspective. There’ve been others, analysis and improvement, finance, technique. Lots of completely different useful areas can profit from this, however their subjects will likely be completely different. Advertising could be focused on very various things from say, R&D and others. And so, it positively has an area for various areas inside a company, in addition to for start-ups.
This isn’t only a toolkit for big organizations. The bigger organizations do spend numerous effort and time on it. This can be a quite simple toolkit that start-ups can use by way of for those who’re bootstrapped, you’re bringing a product to market, simply function play and see how the competitors’s going to react. It can save you numerous expensive errors by doing that internally earlier than you begin deploying your methods externally.
ALISON BEARD: Have you ever ever had an occasion the place a battle recreation led an organization within the incorrect route as a result of they didn’t come to the suitable conclusions?
ARJAN SINGH: There’s been a number of. Flawed route by way of optimizing belongings and prioritizing their developmental plans, it’s occurred a few occasions. And, one of many most important causes for that was round not likely having the suitable background data on the realm. It was an rising space, and they also needed to make sure assumptions on what was prone to occur.
The massive subject there was the best way that they thought of it was from their firm’s lens, not the competitors’s lens. That was a mistake that occurred, the place they ended up entering into a special route. However with monitoring and persevering with to look and having early warning indicators that you simply take a look at, you possibly can course right very, in a short time. And so in that occasion, there are specific assumptions and hypotheses that they’d in an motion plan getting out of the workshop. They began deploying it. After which in a short time, based mostly on suggestions, what they found was that they had been considering by means of it the incorrect approach, after which they course corrected pretty rapidly.
ALISON BEARD: So, you probably did discuss pushback and the truth that, particularly in rising markets, it’s arduous to foretell what’s going to occur. For these individuals who say to you, “Every thing is altering so rapidly. I have already got a lot on my plate. I feel we will develop an excellent technique with out going by means of this course of,” what do you say?
ARJAN SINGH: That’s a terrific query. That occurs numerous occasions. The time dedication and taking 15, 20, 30 individuals from work and having them in a day or two to workshop, that’s all the time a problem. And, typically it’s faster to beat it by means of simply displaying earlier examples or worth. Typically it takes time.
I had an organization that had that very same pushback. And so they didn’t do a recreation for, I feel it was nearly three years. After which lastly, they had been able to do it. As soon as they accomplished it, the primary response was, “Why didn’t we do that earlier? This might’ve saved us numerous time, effort, heartache, and assets.”
Typically corporations simply must form of undergo that entire course of to get that realization as a result of in the end it’s round blind spots and dear errors and alternatives that they may have recognized earlier. Lots of occasions the catalyst for breaking that’s if somebody within the staff’s truly been by means of a recreation. They’re the champions of speaking by means of wargaming and the advantages which can be there. That’s a course of to undergo. That’s one of many causes I wrote the e-book, was to simply educate everybody by way of the advantages of doing this and having efficient, actionable video games of their organizations.
ALISON BEARD: Arjan, thanks a lot for speaking to me at the moment.
ARJAN SINGH: Nice. Thanks.
HANNAH BATES: That was Southern Methodist College adjunct professor Arjan Singh, in dialog with Alison Beard on HBR IdeaCast. Singh is the writer of the e-book Aggressive Success: Constructing Profitable Methods with Company Struggle Video games.
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This episode was produced by Mary Dooe and me, Hannah Bates. Curt Nickisch is our editor. Particular because of Ian Fox, Maureen Hoch, Erica Truxler, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and also you – our listener. See you subsequent week.
HANNAH BATES: Welcome to HBR On Technique—case research and conversations with the world’s high enterprise and administration specialists, hand-selected that will help you unlock new methods of doing enterprise.
For those who actually need to compete in your business, you need to suppose like your rivals. How would possibly they reply to your subsequent transfer? What occurs in the event that they outmaneuver you? What’s your plan then?
That is referred to as company wargaming, or aggressive simulating. And based on Southern Methodist College adjunct professor Arjan Singh, this disciplined strategy to state of affairs planning helps corporations take a look at how their methods and ways maintain up available in the market. The train additionally helps them keep away from blind spots. He talked to host Alison Beard on HBR IdeaCast in 2024 about how corporations can get began.
ALISON BEARD: Now, I do need to be delicate about this time period battle video games as a result of, as we all know, many individuals on the planet from Ukraine to Israel and Palestine are coping with precise battle proper now. However, clarify for us why you employ it and what precisely it means.
ARJAN SINGH: Struggle video games are basically gown rehearsals for corporations to actually take a look at and stress take a look at their methods earlier than they deploy them into {the marketplace}. Wargaming could be very common within the army. It crossed over into the enterprise world about 40, 50 years in the past. The terminology has caught on since then. It’s also known as aggressive simulations.
Many of the functions of wargaming within the enterprise surroundings construct on the ideas from the army so there’s numerous similarities. Clearly, the subjects are very, very completely different. It follows a really related construction by way of understanding your key aggressive panorama, your surroundings, who the important thing gamers are, what typical conditions might emerge as you’re entering into the battlefield. So very related within the army world, and it crosses over into the enterprise world very, very seamlessly.
ALISON BEARD: And the way does it differ from conventional state of affairs planning?
ARJAN SINGH: So conventional state of affairs planning, the notion there may be actually round considering by means of completely different outcomes that will occur in a aggressive surroundings. You hope for one of the best, however you put together for the worst, and you’re employed out methods constructed on these various worlds which can be there.
Wargaming takes situations to a different ingredient. So it’s not nearly what’s attainable sooner or later, however then the wargaming provides layers on by way of the probably actions of key rivals and stakeholders within the market. After which, the actions that an organization ought to absorb response to that, as effectively. So, it actually drives house the actionability and shifting it past an mental train to actually pragmatic subsequent steps for organizations to actually convey them to life.
ALISON BEARD: So, give me an instance of a battle recreation train that you simply would possibly give your college students.
ARJAN SINGH: So, the one which we’re working presently at SMU is The Battle for Mobility. And so, the entire notion there and the central theme there may be round, “Who’s going to manage mobility sooner or later?” And so, we’ve bought six completely different groups which can be represented there. We’ve bought a number of conventional automakers like GM, Volkswagen, Toyota. Now we have next-generation suppliers like Tesla. We’ve bought Uber, in addition to Waymo, represented there. And, the entire notion there may be round, “Who’s going to win on this battle, the battle for mobility? What is going to mobility appear like sooner or later? And what if the world evolves to a scenario the place there’s nonownership of automobiles, applied sciences, AI? How would that have an effect on how individuals commute and use transportation sooner or later?”
ALISON BEARD: So, that concept of “the battle for” is perhaps how corporations or groups must be occupied with it, the battle for this specific market or this group of shoppers?
ARJAN SINGH: Yeah. Precisely. It’s actually across the battles. But additionally, round defining what that battle is and the way do you outline your business and the battle place and who you’re competing in opposition to?
So, I’ll provide you with an instance. Once we went into the COVID scenario, everybody was at house and bought acquainted with on-line collaboration toolkits. And once we bought again into the submit pandemic world, enterprise journey got here again with an enormous pressure. And so while you take a look at conventional rivals, you might see the airways are competing with different airways and different transportation suppliers.
However then on this new actuality, there have been numerous different competitors. So it was American Airways, Zoom, Microsoft Groups, the digital world versus the precise necessity to have the ability to go journey. And so, definition is admittedly, actually vital by way of what that aggressive set seems like. Corporations that outline it too narrowly can find yourself in conditions the place they might be blindsided by new rivals coming in. And so, that definition’s actually, actually vital by way of what that battle will likely be.
ALISON BEARD: What are the main kinds of video games or situations that you simply educate your college students and you employ with purchasers?
ARJAN SINGH: So while you take a look at wargaming, it actually suits into three completely different ranges. There’s strategic battle video games, which is admittedly anchored round long-term technique, how core macroeconomic tendencies are altering the aggressive surroundings. And so they’re basically answering the query, “What is going to the sport be sooner or later?” That tends to be far more senior stage executives that may become involved in strategic video games.
The following stage down is operational video games. And while you’ve bought an outlined area, you’ve bought outlined rivals. And it’s actually considering by means of the place to play, “What areas does an organization must be competing in?”
And then you definitely get down into the executional kind of video games, that are the tactical video games. So, these are typically a lot shorter time period. This tends to be centered in on promoting and normally has a one to 2 12 months time horizon. The core query there may be actually round, “Tips on how to win, how will we promote extra product within the market, how will we message in opposition to our competitors, and the way will we in the end find yourself successful in that area?”
ALISON BEARD: Yeah. After which, how do you give you the precise situations?
ARJAN SINGH: So, situations is an space which… It’s been very effectively documented and written about within the enterprise world. There’s alternative ways of situations. Situations may be quite simple. So, it might be so simple as having the group that’s in a battle recreation brainstorm a set of key issues that will have an effect on the surroundings. After which, voting on it and prioritizing which of them they want to handle. At its most straightforward kind, it’s a really fast train. It may possibly take a couple of minutes.
The standards for situations is admittedly round impactful conditions. So, issues that may impact a competitor surroundings and actually considering of it from an impression perspective, not chance, since you actually need to play out the situations that would be the most impactful.
ALISON BEARD: So while you’re promoting this proposition of wargaming to your college students and to purchasers, what particular alternatives do you level to that it will yield versus different kinds of strategic planning? After which, what particular issues or dangers do you see it serving to corporations overcome?
ARJAN SINGH: Yeah. The chance a part of wargaming is admittedly round serving to corporations keep away from blind spots. This tends to occur loads with incumbent gamers which have giant market shares. The perspective tends to be, “That is how the business is. We’re skilled on this area and we all know it effectively, therefore our success. And, we count on this to proceed.” There’s numerous enterprise college examples and case research of how that’s led to the downfall of numerous corporations, together with numerous iconic names which can be there. So, it helps-
ALISON BEARD: Kodak, Blockbuster, all of these.
ARJAN SINGH: Precisely. And so, this can be a discussion board for having these conversations. And, it’s significantly vital when the conversations are going to be uncomfortable. It’s going to problem the established order. It’s going to make a company suppose otherwise.
And that’s one of many actual advantages which can be there as a result of in a battle recreation, you may have completely different corporations which can be represented. You break up the group into these completely different teams and inform them, “Assume by means of it like that firm. Take into consideration, ‘What does successful imply for this group, and the way are you going to assault our group? And, what are you considering?’”
You begin getting actually deep into that thought course of, and it generates numerous insights. Doing this evaluation inside out, actually entering into the heads of the competitors and searching on the market from their vantage level, is immensely worthwhile.
ALISON BEARD: Why do you suppose that numerous organizations battle to have interaction in that form of in-depth occupied with completely different potential futures and the place their assumptions is perhaps incorrect?
ARJAN SINGH: Lots of occasions, it’s only a perform of assets and time. ? As a result of companies are busy. They’re busy by way of executing. There’s all the time issues to do. And, numerous occasions I get pushback when corporations discuss doing battle video games they usually say, “Oh, can we do that in two hours?” And the reply is, “Nicely, you might, but it surely’s most likely not going to be excellent. To do a well-thought-out recreation, you want between a each day and a half.
And so, then there’s logistics round getting individuals collectively, particularly for those who’re doing a strategic recreation and there’s senior administration concerned. Their calendars are very guarded and arduous to get onto, not to mention asking for eight to 12 hours of their time for this. So, time and assets tends to be a part of it. And, the opposite half is cultural. Some organizations usually are not comfy having their assumptions challenged. There’s numerous construction hierarchy that comes into play. And for those who’re questioning among the senior individuals and their considering, it’s not taken the suitable approach. So, culturally it may be a difficulty, as effectively.
ALISON BEARD: What data do individuals want or ought to they be given earlier than they begin?
ARJAN SINGH: So usually for a recreation, it is best to have a briefing doc that’s bought sufficient background for everybody to be educated in an space. And one of many key distinctions is, for corporations which can be in a specific space they usually’re doing a recreation with that area that they know very well, so your pre-briefing paperwork tends to be loads lighter as a result of it’s an space that individuals are acquainted with.
For areas that corporations want to get into or construct data in a short time, video games even have a good way of doing that very, in a short time. And in these cases, the briefing paperwork could be much more complete.
Typically talking, the briefings are based mostly on market data, aggressive intelligence that you simply might need. After which, actually deep diving into the businesses and never solely the cores of apparent metrics, however actually delving deeper into earlier battles, what they’ve executed in earlier cases, different classes from historical past that may be utilized right here.
ALISON BEARD: And so, then what occurs within the precise recreation?
ARJAN SINGH: So, the sport is a collection of plenary periods adopted by breakout rooms, the place the groups work collectively. So in a typical recreation, you’d begin with an introduction. You’d give perspective by way of the subject, the core subject that you simply’re attempting to unravel, what actions you’re anticipating to come back out of it. It’s possible you’ll current a bit of a part of the briefing doc so that everybody is on the identical stage of information.
After which, you undergo a collection of workouts. And, the primary spherical you’ll usually say, “Okay. For the corporate that you simply characterize, construct a technique to win within the market and suppose by means of numerous levers that you simply’re going to make use of. But additionally, actually take into consideration, ‘What does successful imply for you? Shat does successful imply in your group?’”
As a result of in a market, regardless that you will have direct rivals, every firm normally has a special definition of successful. And so, it’s actually to know what that thought course of is, successful, after which the course of these strategic themes that they’re going to come back after.
You can too put in particular asks round, “How would you assault your group? How do you view the group, and what are the precise issues that you simply’re going to do to remove market share or gross sales or different metrics that you simply is perhaps ?” After which from that time onwards, the groups will put together their shows, they’ll come again, they’ll current. There’ll be panel of judges, probably, that may give suggestions. And the groups will usually return, they’ll revise their methods based mostly on suggestions, based mostly on how the competitors’s going to be attacking that. After which, you begin going by means of a collection of workouts that delve deeper and deeper and deeper into that entire subject space.
After which the video games, usually, they conclude on the finish with turning it round from the corporate’s perspective. And the core query there may be, “Based mostly on these rounds of wargaming and battles that you simply’ve gone by means of, what are the important thing insights that you simply’ve generated? The place do you suppose are the largest alternatives to your small business? The place are the largest dangers which can be there? The plan that you’ve proper now, are you ready for a few of these conditions?”
After which in the end, it’s actually round driving actions. And, you prioritize: “What are the core issues that must be executed proper now, proactively? What are the issues we now have to attend till they begin enjoying out within the market?” And a profitable recreation truly has names of departments or people subsequent to every of these motion objects who’re accountable and accountable for shifting that ahead.
ALISON BEARD: Yeah. That’s helpful. I feel we’ve all had the expertise of going to an off-site and brainstorming nice concepts, after which simply kind of nothing occurs after. You talked in regards to the battle for mobility that you simply did together with your college students. Are you able to give us an instance of a battle recreation that you simply’ve executed with a consumer just lately?
ARJAN SINGH: So, wargaming tends to be a quite common exercise within the pharmaceutical biotech area. I don’t suppose I do know of 1 giant pharma biotech that has not executed a battle recreation. So, all of them do it. And, a part of the rationale there may be you’re spending over a billion {dollars} to convey a drug to market. There’s vital pores and skin within the recreation. And so usually, within the pharmaceutical business, there tends to be numerous wargaming as belongings are dropped at market, finish of Part 3, finish of Part 3, Decide to File, after which as soon as they begin launching into {the marketplace}.
And so, one current recreation I’ve executed within the pharmaceutical area. And it was a possible blockbuster they’re bringing to market so their expectations are over $5 billion in income for the product. And so, the sport adopted the same construction to what I outlined. We bought into particulars. And once we began entering into situations, one of many situations that got here up within the dialogue was round, “What if the FDA doesn’t approve the product?”
And in order you possibly can think about, there was numerous opinions within the room round, “Nicely, that might by no means occur. We all know what we’re doing.” Lots of defensiveness, as effectively. And we mentioned, “Look, that is what you need to do, is to actually put together for the worst and hope for one of the best.”
And so, they went by means of the state of affairs they usually checked out, “If the FDA doesn’t approve the product, what’s going to they do?” They got here up with a playbook on what to do there. Struggle recreation was accomplished. And about lower than a 12 months later when their approval date got here up from the FDA, the product was not accredited.
And so as an alternative of panicking, as an alternative of claiming, “Oh, now what will we do?” They went and appeared on the output from the battle recreation and mentioned, “Look, we now have a playbook right here. We all know precisely what we have to do. There’s sure indicators within the information that we now have to reanalyze.” There’s these different issues that they needed to do. They form of executed on that and resubmitted it with the FDA. The product was accredited afterwards as they’d gone there.
ALISON BEARD: So it looks as if a part of the purpose is to determine the way you would possibly fail earlier than you truly do, or the way you’re going to cope with a loopy shock like COVID.
ARJAN SINGH: Precisely. The way you would possibly fail earlier than you truly do. The COVID shock was truly an attention-grabbing one. We’d executed, with the scholars in 2017, The Battle for the Traveler, which was a recreation wherein we had a few airways, American, Delta, we had the OTAs, Expedia, reserving.com. We had TripAdvisor, Marriott, which is a conventional resort chain. The entire notion is everybody’s attempting to manage the traveler and everybody’s saying, “Hey, e-book on our web site. You don’t must go some other place.” Airways now are saying, “We’ll provide you with loyalty factors for not simply flying, we’ll provide you with loyalty for bank card expenditure and eating and different components, as effectively.”
And in that recreation, apparently in 2017, we truly had the COVID state of affairs, which was the scholars had gone by means of constructing base case methods for the businesses they characterize, how they’re going to win. And, one of many issues that got here out after spherical one was each single firm that was within the room had one specific assumption that their methods had been based mostly on, which was, “The journey growth in the US is prone to proceed. And, that’s what we’ve constructed our methods on.”
And so the state of affairs we gave them, we made it very generic simply saying that, “Occasions occurred on the planet the place it’s going to have an impact of declining demand for journey by as much as 95%.” We put a remark in there from a fictional analyst saying that, “The journey growth in the US, the best way that we’ve identified it, is useless. Leisure journey’s useless, and enterprise journey goes to take about three years to get well.” So, that was basically the COVID scenario.
And the scholars’ reactions first was, “Oh, no approach. That is by no means going to occur. It’s foolish situations.” And we mentioned, “No. Undergo it.” And, each single firm needed to rework their technique and their playbook based mostly on that one assumption altering, that the market growth’s over. It’s going to be over for the following three years or so.
ALISON BEARD: So, it looks as if the output from these periods is a playbook for quite a lot of situations that then you possibly can put into motion and ensure is applied if these situations come up?
ARJAN SINGH: That’s, and that’s actually the important thing to driving actionability after a battle recreation. As you’d talked about, all of us have been to these conferences, which I name attention-grabbing, nice discussions, numerous nice thought course of that’s there. However then, it doesn’t actually result in something. Proper? And actionability, actually, from a battle recreation comes from the playbook. And, the playbook’s usually structured round, “What actions ought to a company take? What these subsequent steps are. What are the actions to take versus among the situations?”
So if state of affairs occurs, construct a playbook in response to that. Perceive the important thing insights that you simply’ve generated in your competitors, what their sizzling subjects is perhaps, what are the areas the place they’re susceptible, the place you might actually focus in on? And having all these particulars in a quite simple format, to make use of shifting ahead.
Then, the opposite profit to a playbook is that that is the output of the stakeholders within the group. So, this isn’t a 3rd celebration telling them what to do or one particular person, it’s everybody aligning as a gaggle by way of, “We perceive the core points. We perceive the place our alternatives are. We align on what our subsequent steps are going to be.” It’s a a lot faster technique to mobilize a company in the direction of a specific purpose or actions.
ALISON BEARD: Yeah. I like the purpose you made within the e-book about how consultants would possibly are available in and say, “Proper. That is what it is best to do.” After which, they’re not ever accountable for the result of what they’ve really useful. There’s an enormous distinction. And so, how usually ought to organizations repeat this course of?
ARJAN SINGH: Lots of organizations do wargaming on an annual foundation. So, among the finest at school corporations have built-in battle gaming into their planning course of, so their annual planning course of. They’ll kick that off with a battle recreation, take a look at completely different points of their aggressive surroundings, after which they get into their planning.
So, that’s form of finest observe. Relying on business, it’ll range. So for those who’re strategic points and also you’re in a conventional business, you most likely have to do one as soon as each couple of years or so. For those who’re in a fast paced space like know-how or others, you might do it annually, you might do it a number of occasions a 12 months. After which, it additionally is determined by the subject space, as effectively. So for instance, for those who’re bidding on a big contract that’s value billions of {dollars} and also you’ve bought a 18-month to 24-month gross sales cycle, I do know of corporations in these conditions, they battle recreation each week.
ALISON BEARD: Hmm. Wow.
ARJAN SINGH: Yeah. I imply, for among the massive ones, just like the Jedi contract, I do know there are some corporations that did weekly ones. When there’s $10 billion on the desk, you try to determine not solely what you’re considering, however all the important thing stakeholders, and what that battle would possibly appear like and all of the permutations and combos there, for which you’d want vital quantities of rounds of state of affairs planning and wargaming.
ALISON BEARD: Yeah. So, it sounds such as you’re saying that particular groups inside organizations may also use this course of to consider their aggressive technique on a smaller scale, like signing an enormous deal.
ARJAN SINGH: Completely. the gross sales staff can discover numerous profit from with the ability to promote extra product, meet their targets. It may possibly assist from a advertising and marketing perspective. There’ve been others, analysis and improvement, finance, technique. Lots of completely different useful areas can profit from this, however their subjects will likely be completely different. Advertising could be focused on very various things from say, R&D and others. And so, it positively has an area for various areas inside a company, in addition to for start-ups.
This isn’t only a toolkit for big organizations. The bigger organizations do spend numerous effort and time on it. This can be a quite simple toolkit that start-ups can use by way of for those who’re bootstrapped, you’re bringing a product to market, simply function play and see how the competitors’s going to react. It can save you numerous expensive errors by doing that internally earlier than you begin deploying your methods externally.
ALISON BEARD: Have you ever ever had an occasion the place a battle recreation led an organization within the incorrect route as a result of they didn’t come to the suitable conclusions?
ARJAN SINGH: There’s been a number of. Flawed route by way of optimizing belongings and prioritizing their developmental plans, it’s occurred a few occasions. And, one of many most important causes for that was round not likely having the suitable background data on the realm. It was an rising space, and they also needed to make sure assumptions on what was prone to occur.
The massive subject there was the best way that they thought of it was from their firm’s lens, not the competitors’s lens. That was a mistake that occurred, the place they ended up entering into a special route. However with monitoring and persevering with to look and having early warning indicators that you simply take a look at, you possibly can course right very, in a short time. And so in that occasion, there are specific assumptions and hypotheses that they’d in an motion plan getting out of the workshop. They began deploying it. After which in a short time, based mostly on suggestions, what they found was that they had been considering by means of it the incorrect approach, after which they course corrected pretty rapidly.
ALISON BEARD: So, you probably did discuss pushback and the truth that, particularly in rising markets, it’s arduous to foretell what’s going to occur. For these individuals who say to you, “Every thing is altering so rapidly. I have already got a lot on my plate. I feel we will develop an excellent technique with out going by means of this course of,” what do you say?
ARJAN SINGH: That’s a terrific query. That occurs numerous occasions. The time dedication and taking 15, 20, 30 individuals from work and having them in a day or two to workshop, that’s all the time a problem. And, typically it’s faster to beat it by means of simply displaying earlier examples or worth. Typically it takes time.
I had an organization that had that very same pushback. And so they didn’t do a recreation for, I feel it was nearly three years. After which lastly, they had been able to do it. As soon as they accomplished it, the primary response was, “Why didn’t we do that earlier? This might’ve saved us numerous time, effort, heartache, and assets.”
Typically corporations simply must form of undergo that entire course of to get that realization as a result of in the end it’s round blind spots and dear errors and alternatives that they may have recognized earlier. Lots of occasions the catalyst for breaking that’s if somebody within the staff’s truly been by means of a recreation. They’re the champions of speaking by means of wargaming and the advantages which can be there. That’s a course of to undergo. That’s one of many causes I wrote the e-book, was to simply educate everybody by way of the advantages of doing this and having efficient, actionable video games of their organizations.
ALISON BEARD: Arjan, thanks a lot for speaking to me at the moment.
ARJAN SINGH: Nice. Thanks.
HANNAH BATES: That was Southern Methodist College adjunct professor Arjan Singh, in dialog with Alison Beard on HBR IdeaCast. Singh is the writer of the e-book Aggressive Success: Constructing Profitable Methods with Company Struggle Video games.
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