Business Wargaming This page intentionally left blank Business Wargaming Securing Corporate Value DANIEL F. ORIESEK and JAN OLIVER SCHWARZ © Daniel F. Oriesek and Jan Oliver Schwarz 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Published by Gower Publishing Limited Gower House Croft Road Aldershot Hampshire GU11 3HR England Ashgate Publishing Company Suite 420 101 Cherry Street Burlington, VT 05401-4405 USA Daniel F. Oriesek and Jan Oliver Schwarz have asserted their moral right under the Copyright, Designs and Patents Act, 1988, to be identified as the authors of this work. www.gowerpublishing.com British Library Cataloguing in Publication Data Oriesek, Daniel F. Business wargaming : securing corporate value 1. Strategic planning 2. Business planning I. Title II. Schwarz, Jan Oliver 658.4’012 ISBN: 978-0-566-08837-7 Library of Congress Cataloging-in-Publication Data Oriesek, Daniel F. Business wargaming : securing corporate value / by Daniel Oriesek and Jan Oliver Schwarz. p. cm. Includes bibliographical references and index. ISBN 978-0-566-08837-7 1. Management games. 2. Strategic planning--Simulation games. 3. War games. I. Schwarz, Jan Oliver. II. Title. HD30.26.O75 2008 658.4’012--dc22 2008010608 Contents List of Figures ix List of Abbreviations xi Foreword by Paul Bracken xiii Introduction 1 Part I Background to Business Wargaming 5 Chapter 1 The History of Wargaming 7 Wei-Hai and Go in Ancient China 8 From Chaturanga in India to Chess 8 Chess and Further Developments 8 Games for Military Use 10 Non-military Wargaming and Recent Developments 16 The Evolution of Business Wargaming 18 Chapter 2 Business Wargaming Methodology 21 What is Business Wargaming? 21 How Does Business Wargaming Work?—Teams 23 How does Business Wargaming Work?—Interaction 25 How does Business Wargaming Work?—Moves 26 Chapter 3 The Relevance of Business Wargaming in Strategy 29 Strategy and Tactics: A Military Point of View 29 The Relevance of Strategic Planning and Scenario Planning 32 The Advantages of Business Wargaming 33 Part II Applications of Business Wargaming 37 Introduction 39 vi BUSINESS WARGAMING Chapter 4 Strategy Testing 41 Why Strategy Testing? 41 Case Study: Alliance Strategy for Airlines 43 Case Study: 3G Mobile Data Market Entry 48 In a Nutshell: Business Wargaming in the Swiss General Staff College 54 Chapter 5 Crisis Response Preparation 57 Implications of Business Wargames for Crises Management 57 Case Study: Financial Information Provider 59 Case Study: HIV/AIDS 61 Case Study: Bioterrorism 67 Chapter 6 Developing Foresight 73 Developing Foresight in Business Wargaming 73 The Future of Asset Management Distribution 74 Wargames in the Public Sector 78 Chapter 7 Change Management 81 Change Management and Business Wargaming 81 Case Study: Changing the Game 82 Chapter 8 Education and Recruitment 85 Business Wargaming in Education and Recruiting 85 Practical Applications 86 Applying Business Wargaming in a University Context 88 Case Study: The Booz Allen CEO Challenge 91 Chapter 9 Further Applications of Business Wargaming 99 Strategic Early Warning Systems 99 Corporate Reputation Management: Stakeholder Wargame 101 Chapter 10 An Alternative Approach to Designing a Business Wargame: Wargaming in the Automotive Industry 105 The Situation 105 Goals of the Wargame 105 The Wargame 109 Lessons Learned 113 Results 113 CONTENTS vii Part III Business Wargaming in Practice 115 Chapter 11 Design and Execution 117 Design Phase 118 Preparation 120 Execution 122 Debriefing and Documentation 123 Summary 124 Bibliography 127 Index 131 This page intentionally left blank List of Figures 2.1 Elements of business wargaming 24 2.2 Example of an actual timeframe simulated over three game moves 26 2.3 Overview of activities on a typical game day 27 3.1 Strategy as a bridge 30 3.2 A typical strategic planning process 32 4.1 Team structure overview 45 5.1 Team structure overview 64 5.2 Team structure overview 69 8.1 Team structure overview 89 9.1 The process of a strategic early warning system 101 10.1 The process of the wargame 108 10.2 General types of eventual strategies 111 11.1 Process of designing and executing a business wargame 117