DiscoverHBR IdeaCastWhy You Need to Stress Test Your Strategies (and Tactics)
Why You Need to Stress Test Your Strategies (and Tactics)

Why You Need to Stress Test Your Strategies (and Tactics)

Update: 2024-06-042
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Arjun Singh, an adjunct professor at Southern Methodist University and consultant, advocates for the use of corporate war gaming as a powerful tool for strategic planning and innovation. He argues that while many organizations engage in scenario planning, they often lack the discipline and thoroughness to truly push beyond their current realities. War gaming, he believes, provides a structured and rigorous framework for testing and stress-testing strategies before deployment. Singh emphasizes that war gaming is not simply about predicting future outcomes but also about understanding the likely actions of key competitors and stakeholders, and developing actionable responses. He highlights the importance of defining the competitive landscape and identifying the key battles that companies need to win. Singh provides examples of war gaming exercises he conducts with students and clients, including the "Battle for Mobility" and a recent game with a pharmaceutical company that helped them navigate an FDA approval challenge. He emphasizes the importance of playbooks, which outline specific actions to be taken in response to various scenarios, and the need for organizations to regularly engage in war gaming, ideally on an annual basis. Singh also discusses the benefits of war gaming for individuals, suggesting that it can be used to de-risk career choices and develop a clear path towards achieving personal goals. He acknowledges the challenges of implementing war gaming, including time constraints and cultural resistance, but argues that the potential benefits outweigh the costs. Singh's insights provide a compelling case for organizations and individuals to embrace war gaming as a valuable tool for strategic thinking and success.

Outlines

00:00:00
Introduction

This Chapter introduces the topic of corporate war gaming and the guest, Arjun Singh, an adjunct professor at Southern Methodist University and consultant who has helped hundreds of companies use this process to de-risk their strategies and find new ways to innovate.

00:00:17
Corporate War Gaming: A Disciplined Approach to Scenario Planning

This Chapter explores the concept of corporate war gaming, emphasizing its importance in pushing organizations beyond their current realities and testing strategies rigorously. It contrasts war gaming with traditional scenario planning, highlighting the former's focus on understanding competitor actions and developing actionable responses.

00:05:35
Types of War Games and Scenario Development

This Chapter delves into the different levels of war gaming, including strategic, operational, and tactical games. It explains how scenarios are developed, emphasizing the importance of focusing on impactful situations rather than likelihood.

00:07:43
Benefits and Challenges of Corporate War Gaming

This Chapter discusses the opportunities and risks associated with corporate war gaming. It highlights its ability to help companies avoid blind spots, challenge assumptions, and develop playbooks for various scenarios. It also acknowledges the challenges of time constraints, cultural resistance, and the need for accurate background information.

Keywords

Corporate War Gaming
Corporate war gaming is a strategic planning process that involves simulating competitive scenarios to test and stress-test business strategies. It is a disciplined and thorough approach to scenario planning that borrows from military war games. The goal of corporate war gaming is to identify potential risks and opportunities, develop actionable responses, and de-risk strategies before deployment. It involves understanding the likely actions of key competitors and stakeholders, and developing playbooks for various scenarios. Corporate war gaming is particularly valuable for organizations operating in dynamic and uncertain environments.

Scenario Planning
Scenario planning is a strategic planning technique that involves developing multiple possible future scenarios to explore potential outcomes and develop contingency plans. It helps organizations to anticipate and prepare for uncertainty and change. Scenario planning typically involves identifying key drivers of change, developing plausible scenarios, and analyzing the implications of each scenario for the organization's strategy. It is a valuable tool for organizations operating in complex and uncertain environments.

Competitive Landscape
The competitive landscape refers to the environment in which a company operates, including its competitors, customers, suppliers, and other stakeholders. It is a key factor in strategic planning, as it helps organizations to understand their competitive position, identify opportunities and threats, and develop strategies to achieve competitive advantage. The competitive landscape is constantly evolving, so organizations need to monitor it closely and adapt their strategies accordingly.

Playbook
A playbook is a document that outlines specific actions to be taken in response to various scenarios. It is a valuable tool for organizations that need to respond quickly and effectively to unexpected events. Playbooks typically include a clear description of the scenario, the actions to be taken, the roles and responsibilities of team members, and the communication plan. They are often used in crisis management, sales, and marketing.

Arjun Singh
Arjun Singh is an adjunct professor at Southern Methodist University and a consultant who specializes in corporate war gaming. He is the author of the book "Competitive Success: Building Winning Strategies with Corporate War Games." Singh has helped hundreds of companies use war gaming to de-risk their strategies and find new ways to innovate. He is a leading expert in the field of strategic planning and scenario analysis.

Southern Methodist University (SMU)
Southern Methodist University (SMU) is a private research university located in Dallas, Texas. It is known for its strong business school, which offers a variety of programs in areas such as finance, marketing, and management. SMU is also home to the Cox School of Business, which is ranked among the top business schools in the United States.

FDA
The Food and Drug Administration (FDA) is a federal agency responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, food supply, cosmetics, and radiation-emitting products. The FDA's approval process for new drugs is rigorous and involves multiple phases of clinical trials to ensure the safety and efficacy of the drug. The FDA's approval is essential for a drug to be marketed in the United States.

Mobility
Mobility refers to the ability to move freely and easily. In the context of transportation, mobility encompasses various modes of transportation, including cars, buses, trains, and bicycles. The future of mobility is being shaped by technological advancements, such as autonomous vehicles, ride-sharing services, and electric vehicles. The battle for mobility is a competition among various players, including traditional automakers, technology companies, and transportation providers, to control the future of transportation.

COVID-19
COVID-19 is a respiratory illness caused by the SARS-CoV-2 virus. It was first identified in Wuhan, China, in December 2019, and has since spread worldwide, causing a global pandemic. COVID-19 has had a significant impact on businesses, economies, and societies, leading to widespread lockdowns, travel restrictions, and disruptions to supply chains. The pandemic has also accelerated the adoption of digital technologies, such as remote work and online shopping.

Q&A

  • What is corporate war gaming and how does it differ from traditional scenario planning?

    Corporate war gaming is a disciplined and thorough approach to scenario planning that involves simulating competitive scenarios to test and stress-test business strategies. It goes beyond simply predicting future outcomes by focusing on understanding the likely actions of key competitors and stakeholders, and developing actionable responses. Traditional scenario planning, on the other hand, focuses on exploring different possible future outcomes and developing strategies based on those alternatives.

  • What are the different levels of war gaming and how are scenarios developed?

    War gaming can be categorized into three levels: strategic, operational, and tactical. Strategic war games focus on long-term strategy and how macroeconomic trends are changing the competitive environment. Operational games focus on specific competitive spaces and how to compete within them. Tactical games are shorter-term and focus on selling and marketing strategies. Scenarios are developed by identifying impactful situations that will have a significant effect on the competitive environment, rather than focusing on likelihood.

  • What are the benefits and challenges of corporate war gaming?

    Corporate war gaming can help companies avoid blind spots, challenge assumptions, and develop playbooks for various scenarios. It can also help to align stakeholders and drive actionability. However, it can be time-consuming and challenging to implement, especially in organizations with strong hierarchies and a resistance to change.

  • How often should organizations engage in war gaming?

    The frequency of war gaming depends on the industry, the topic area, and the organization's specific needs. Best practice suggests annual war gaming, but organizations in fast-moving industries or those facing significant strategic challenges may need to engage in war gaming more frequently. For example, companies bidding on large contracts may wargame weekly.

  • Can individuals use war gaming to plan their careers?

    Yes, individuals can use war gaming to de-risk their career choices and develop a clear path towards achieving their goals. This involves understanding their competitive landscape, identifying their desired career path, and developing a plan to achieve it. It also involves considering the trade-offs involved in different career choices and developing contingency plans for unexpected events.

  • What should organizations do if they face pushback from employees who believe they can develop a good strategy without war gaming?

    Organizations facing pushback should emphasize the potential benefits of war gaming, such as avoiding blind spots, identifying opportunities, and developing actionable plans. They can also share examples of companies that have successfully used war gaming to achieve strategic goals. Ultimately, it may take time and experience for organizations to fully appreciate the value of war gaming.

  • What are some examples of war gaming exercises that can be used in different industries?

    Arjun Singh provides examples of war gaming exercises he conducts with students and clients, including the "Battle for Mobility" in the transportation industry and a recent game with a pharmaceutical company that helped them navigate an FDA approval challenge. These examples demonstrate the versatility of war gaming and its applicability to a wide range of industries.

  • What are the key takeaways from this podcast episode?

    The key takeaways from this podcast episode are that corporate war gaming is a valuable tool for strategic planning and innovation, it can help organizations to de-risk their strategies and find new ways to innovate, and it can be used by both organizations and individuals to achieve their goals. The episode also highlights the importance of playbooks, the challenges of implementing war gaming, and the potential benefits of engaging in this process.

Show Notes

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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Why You Need to Stress Test Your Strategies (and Tactics)

Why You Need to Stress Test Your Strategies (and Tactics)