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Corporate war games could be the best way of testing business strategy.
Eila Rana, CFO Europe Magazine
February 4, 2008
What's the best way to test a business strategy? Bring in someone from outside to try to stop it, says Ken Charman, CEO of Simulstrat, a corporate war-gaming company spun off from London's King's College last year. Armies have tested their battle plans this way for years. Why shouldn't companies do the same with business plans?
War-gaming isn't new, but it remains far from widespread. Gartner, a consultancy, says such games — or "business simulations" — have failed to take off for two reasons: they're often too complex and of limited relevance. Yet it reckons that as offerings improve, war-gaming will soon become "a routine planning capability."
While Charman concedes that generic corporate war games often fail to deliver, he says that his company's programmes — which typically cost at least £250,000 (€335,000) — are meticulously researched and prepared over several months to reflect a client's real-world environment as much as possible. What's more, these games involve not only the employees from the client company, but also suppliers and other external stakeholders.
Later this year, Simulstrat will host a war game on behalf of the Bioscience Futures Forum (BFF), a UK biotechnology industry body. Designed to explore why the UK has failed to produce a major biotech company like America's Amgen, the war game will pit fictional UK and US biotech start-ups against each other. "By running it as a simulation, we will be able to produce comparative data and throw light on the problem," says Charman.
Gill Samuels, chairwoman of the BFF, has taken part in Simulstrat's war games before. "The magic of a simulation is that it produces a more realistic understanding among stakeholders of the complexity of the problem, and it allows all those separate forces in an environment to interact," she says. "It's experiential learning and it's devoted to problem-solving."
Another war-gaming offering is from the Conference Board. For €3,200 (€4,500 for non-members), its Waterloo Leadership Event takes executives to the fields of the 1815 battle to re-examine in person some of the decisions commanders faced in the heat of the fighting. The Conference Board says the point isn't necessarily for executives to apply lessons learned from deploying cavalry and infantry back at the office. Rather it's a chance for executives to build critical thinking so that in the next boardroom battle they're sure to be on the winning side.