In late April 1999, US Central Command conducted a series of war games to figure out the likely outcome of invading Iraq to topple Saddam Hussein. Collectively, the picture they painted was as about ugly as it gets. CENTCOM concluded any effort to unseat Hussein could unleash unmanageable levels of violence, would create a major security void and would require at least 400,000 troops. As we all know, the coalition of the willing ignored the warnings and went ahead anyway, sending a mere 130,000 troops instead. Proving just how well war games can work, the result has been every bit as predictable as predicted.
Of course in normal circumstances a military commander or politician who tried to justify failure on the basis that the enemy had done something unexpected would be railroaded out of town. Providing the means to anticipate the opposition is, after all, why they invented war games. Yet some business leaders - ignoring their own primary responsibility to anticipate the competitor enemy and to put plans in place to thwart them - seem to expect the world to find such excuses perfectly reasonable.
Never base your plans on what you believe the enemy will do. Base them on what he could do
These business leaders should instead have a good look at war gaming as a predictor and planning tool. Business war gaming, used correctly (and when the results aren't wilfully ignored) can be one of the most powerful weapons in the competitive intelligence armoury. The Academy of Competitive Intelligence says its clients consider war gaming the most effective planning tool of the 2000s.
Unfortunately, war gaming isn't used all that frequently, and is even more rarely used effectively, particularly in Australia.
"A war game is neither a war nor a game," wrote Dr Ben Gilad, founder of the Academy of Competitive Intelligence and co-founder of the Fuld-Gilad-Herring Academy of Competitive Intelligence in an article for the Society for Competitive Intelligence (SCIP). "It is a rigorously structured, analytical role- play of selected players in one's industry, aimed at creating a strategy based on expected moves and countermoves of these players.
"Every business war game is played against a backdrop of the industry's underlying structure and the change drivers that are going to shift it - so-called industry evolution."
Gilad, who teaches war gaming methodology at the Fuld-Gilad-Herring Academy of Competitive Intelligence and has been running his so-called "blind spots" war games extensively for more than 15 years, is a war-game evangelist in the truest sense of the word. War games, he says, can perform miracles. "A war game can be crucial and powerful to the career of the competitive intelligence [CI] manager. If done properly, a war game is the one and only occasion in which the CI manager comes out of the passive information-provider role and steps right into the limelight as an active member of the strategy formation team.
"Befitting the new mentality, which distances business war games from their violent military cousins, Chevron renewed the use of war games in 2006, with a trained competitive intelligence professional leading the way. Of course, its war games are neither wars nor games. Perhaps a more apt name should be Competitor Appreciation Day (CAD)."
Even so, Gilad says, a war game is primarily about the host company, and competitors are just the background. Competitors won't change an industry structure or cause great hardship to your company. The real threats, he says, come from your own executives, turf wars and "layers of redundant vice presidents pursuing undisciplined opportunities and blocking good strategic moves".
"Successful war games are about your own company, about refocusing, about finding the direction that has been lost after decades of success and the resulting strategy 'decadence'. That is especially and painfully true at large, leading companies," Gilad says.
Pity then, that so few Australian organizations use war games at all, and so many that purport to use them misunderstand their purpose.