The Strategy Skills Podcast: Strategy | Leadership | Critical Thinking | Problem-Solving

575: Ex McKinsey Expert on War Games, John Horn: How to Read Your Competitors (Strategy Skills classics)

Aug 6, 2025

John Horn, a professor at Washington University's Olin Business School and ex-McKinsey strategist, shares his insights on understanding competitive behavior through game theory. He debunks the myth of irrational competitors, emphasizing that their actions often have logical motives. Horn introduces a four-step framework for effective competitor analysis, highlighting the importance of empathy in strategic decision-making. He also discusses how entrepreneurs can leverage these strategies and the role of structured simulations in anticipating competitor moves.

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INSIGHT

Competitors Are Usually Rational

Competitors are rarely irrational; they are simply pursuing different objectives based on their unique resources and market position.
Understanding their viewpoint reveals rationality and helps anticipate their actions accurately.

ADVICE

Four-Step Competitor Analysis Framework

Use a four-step framework: observe competitors' actions, assess their resources, identify decision-maker profiles, and make written short-term predictions.
Revisit predictions regularly to refine insights and improve strategic decisions.

ADVICE

War Gaming For Entrepreneurs

Entrepreneurs should leverage insider knowledge from former firms and focus quickly on competitors' public signals.
Spend around 1.5–2 hours reviewing competitor capabilities with your leadership team to shape competitive strategies.

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John Horn, professor of economics at Washington University's Olin Business School and former McKinsey strategist, shares a disciplined framework for understanding competitive behavior by applying game theory and structured simulations. In this episode, he explains how companies can elevate competitor analysis from basic intelligence gathering to actionable strategic insight.

Horn begins by debunking the common misconception that many competitors behave irrationally. As he puts it:

“Every single time a client said the competitor is irrational, I could ask them... two, three questions which would explain... why the company was being rational in what they were doing.”

He outlines a four-step framework leaders can use to model likely competitive behavior:

Observe what competitors say and do, including press releases, earnings calls, and other public data.
Assess their assets, resources, and capabilities, and imagine what you'd do in their position.
Identify the decision-maker and their background to infer how they think:

“If you grew up as a marketer and you became a CEO, you’re going to look at the world from a marketing perspective.”

Make a short-term prediction, write it down, and revisit it:

“It becomes a virtuous cycle of getting a better insight into how that competitor thinks.”

Horn emphasizes that many firms fall short because they stop at step one or lack mechanisms to feed deeper insights into decision-making. He also stresses the role of empathy—not sympathy—in strategy:

“I do have to empathize, understand why they’re making the choices they make.”

War gaming, in Horn's view, is a powerful simulation tool, not theater.

“It’s a chance to practice business choices in a risk-free way... and just a much more realistic discussion.”

For entrepreneurs or under-resourced teams, Horn offers a lighter-weight version called "War Gaming Lite," which enables rapid, structured thinking about competitive responses using only internal knowledge and role-playing.

He also discusses how human biases, short-term incentives, and lack of time make both your firm and your rivals more predictable than you might think:

“People really are predictable... It’s not rocket science—it’s about being disciplined.”

Whether you're a startup founder or a Fortune 500 executive, this episode offers practical steps to improve your strategic foresight and competitive positioning, grounded in empathy, behavioral realism, and iterative prediction.

Get John’s book here: https://shorturl.at/6DOyh

Inside the Competitor's Mindset: How to Predict Their Next Move and Position Yourself for Success.

Here are some free gifts for you:

Overall Approach Used in Well-Managed Strategy Studies free download: www.firmsconsulting.com/OverallApproach

McKinsey & BCG winning resume free download: www.firmsconsulting.com/resumepdf

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