Why You Need to Stress Test Your Strategies (and Tactics)
Jun 4, 2024
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Consultant and adjunct professor Arjan Singh discusses the importance of stress testing strategies through corporate war games. He highlights the benefits of disciplined scenario planning to identify risks, innovate, and enhance strategic thinking. Singh's approach helps leaders navigate competitors, market dynamics, and unexpected events by testing how their strategies hold up.
Corporate war gaming helps stress test strategies by simulating competitive scenarios and competitor actions.
War gaming at different organizational levels aids in market positioning, competitive advantage, and decision-making.
Deep dives
The Concept of Corporate War Gaming
Corporate war gaming is a strategic planning technique borrowed from the military that allows companies to stress test their strategies by simulating competitive scenarios. Unlike traditional scenario planning, war gaming involves considering not only possible outcomes but also the likely actions of competitors and stakeholders. By delving deeper into competitor actions and responses, companies can move beyond theoretical exercises to develop actionable strategies that reflect real-world competitive dynamics.
Application of War Gaming in Different Business Levels
War gaming can be applied at different levels within organizations, including strategic, operational, and tactical games. Strategic games focus on long-term strategy and macroeconomic trends, while operational games help in determining where to compete. Tactical games concentrate on short-term selling strategies and typically have a one to two-year time horizon. Each level of war gaming enables organizations to answer critical questions related to market positioning, competitive advantage, and effective decision-making.
Benefits and Implementation of War Gaming
The benefits of war gaming include helping companies avoid blind spots and challenging assumptions that can lead to complacency and overlooking competitive threats. By engaging in war gaming exercises, organizations can identify opportunities and risks, accelerate decision-making, and mobilize teams towards common goals. Implementing war gaming requires sufficient time and resources, as well as a willingness to challenge existing assumptions and hierarchies within organizations. The process involves creating briefing documents, conducting plenary sessions and breakout exercises, and developing actionable playbooks to guide future strategies.
While many teams and organizations engage in scenario planning, most don't go far enough. Arjan Singh, consultant and adjunct professor at Southern Methodist University, says a more disciplined approach, borrowed from the military, can help leaders truly test how their strategies, operations, and tactics hold up against competitors, shifting market dynamics, and unexpected events. He's helped hundreds of companies identify risks and find new ways to innovate by leading them through corporate war games, and he explains his process and results. Singh is the author of the book Competitive Success: Building Winning Strategies with Corporate War Games.
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