Battle stations

War games are an essential tool that can, and should, be used to aid company decision-making. The term 'war game' is often used to describe a variety of multi-functional, interactive events that actually have more specific definitions, such as scenario planning, alternative futures, strategy workshops and brainstorming.

However, a war game is actually a specific process and event that set out to 'pressure test' a company's, or a product's, competitive position and to define the key activities and priorities required to maintain or enhance it. In the pharmaceutical industry, for example, a war game could be used to help a product team develop key claims for launch and the clinical activities necessary.

In a war game, teams from within a company each represent a key competitor, and 'compete' against each other with a view to learning about the opposition and anticipating its behaviour in order to drive strategic activities or action plans.

Application
War games can be used at almost any stage of the product life cycle, but are most useful relatively late in the process, when both product attributes and strategy are fairly well defined and when it is important to really understand the product competitiveness.

Ideally, the war game will be built into the overall product or company strategy development process and will have time dedicated to it.
The two key decision points are while defining the phase III programme and just prior to launch.

For marketed products, a war game should be considered when there is a particular threat from a competitor or new competitive entry, or some discontinuity in the market.

Analytical depth
The extent of the research, competitive intelligence gathering and analysis conducted to support the war game depends on the objectives, what issues are to be addressed, the level of detail required, the number of major competitors, as well as important practical constraints, such as budget, timing and urgency. Participants need enough facts to enable them to enact a realistic debate with realistic outcomes and cannot rely simply on their own judgments and fantasy.

Minimum requirements to support a typical war game are:

1.   A clear understanding of the dynamics and trends in the market - a good market situational analysis, with some degree of future vision and forecasts
2.   A good understanding of key competitors and some knowledge of what their broad portfolio and strategies might be
3.   A basic view of the competitive product strengths and weaknesses, their degree of differentiation and possible competitive advantage or disadvantage
4.   An honest and, if possible, independent external appraisal of the company or product capabilities.

Much of this may exist in the company already. However, some research may have to be commissioned externally. The more thorough the research and analysis, the more effective the conclusions, but this will affect the timing of the exercise.

Briefing
At the heart of the war game is the principle that small groups are formed to represent each of the competitors. Members must be briefed so that they fully understand the competitor that they represent to enable them to think and act like them.
Each competitor team should comprise no more than eight people; five or six is ideal. It is best to limit numbers so that there are just two or three key competitors.

The 'home' product team should consist of the core of the real life company product team. However, it is useful to seed-in non-core team members to challenge and to think outside the box.

The other competitor teams should be made up of a range of people who can contribute to the debate and action plan. All the usual rules of group dynamics apply; individuals should have the appropriate experience, but not necessarily experience of the specific product, should come from a range of functions in the company, should be able to work in the group, but not dominate, and to think creatively.

Each team should have the event explained two or three weeks beforehand, when it should have been given a pack containing the situational analysis and company briefs.

The event
Depending on availability of key people, the event should last between one and three days. A good format is mid-day on day one to the end of day two.

It can be broken into four segments:

1.   Introduction and briefing - 3 hours
2.   War Game round 1 - half day
3.   War Game round 2 - half day
4.   Action planning/de-briefing - 1 hour.

Following the introduction and briefing in plenary, each competitor team should be in a position to be able to write a realistic strategy for its company or product.

Round 1
At the beginning of the second half-day session, each competitor team must write up its company or product strategy in succinct, bulleted format. For example, this could comprise:

•   The market opportunity
•   The 'product'
•   The differential advantage offered
•   Resources required to achieve this
•   Teams are given about an hour to complete the task, in syndicates
•   Then each team presents its company strategy to the plenary, representing the marketplace
•   Clarification, debate and discussion take place throughout.

Round 2
In the third session, teams go back into syndicates and rewrite their strategies in the light of what they have just learned. They should ask themselves what they would do now, based on the new knowledge and insight. What changes must they make and what issues need to be addressed?

Again, teams come back and present their renewed strategies in plenary session, with further debate and discussion. At this point, the internal company team should be looking for help from the competitive teams on the probability of particular things happening, of particular competitive threats, so that the appropriate course of action can be assessed.

Action plan
At the end of the event, it is essential that time is allotted to ensure key issues are captured and an 8-10 point action plan of strategic activities is written up. This plan should form the basis of subsequent meetings and activities in the product team.

The most important benefit provided by the war game is the testing of the product and strategy in a robust and systematic way to really understand its competitiveness in the marketplace before launch, and identifying actions that need to be taken to improve it. If the war game is set up properly and the teams are fully briefed, this can be an alarmingly realistic experience.

Conflict of interest
Second, the war game can uncover potential conflicts between the multiple objectives and individual views in a complex multi-functional company. This often has implications on resources and priorities.

Third, it can reveal holes in the company's assumptions about the market, about its competitors' intent and capabilities and about the company's own capabilities.

Last, there are also benefits in team building and preparing individuals for their real roles on the product team through supplying a better general understanding of the importance of the competition in the marketplace and the specific competitive issues.

Facilitation
Running a successful war game requires good planning and organisation, with great attention to detail. Exceptional facilitation is an essential part of this. Individuals from the company can be trained to do this, and can be effective, as they have a great advantage in that they know the company, people and issues.

However, an experienced external facilitator can bring a level of expertise not found in a company individual, plus independence and an external perspective that aids the whole process.

The Author
Neil Rogers is managing director at Stratagem 37.

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