For many, steering a business feels more like riding the rapids than taking a leisurely trip across a still, blue ocean. VUCA is an ugly acronym, but it’s become embedded in the management lexicon; the notion that markets are increasingly volatile, uncertain, complex and ambiguous. A recent survey of *CEO’s suggested that globally, just 18% of leaders are ‘fully capable’ of dealing with all four VUCA challenges. Of the four, the challenge they find most difficult is volatility. The main driver of volatility is increased competitor disruption, which is becoming more frequent, more intense and sustained. Few if any industries, sectors or businesses have proved themselves immune.

So what capabilities do leaders need to win in volatile environments? The Global CEO Study cited Strategic Thinking and Adaptability as the most critical capabilities. Businesses need strategists to be flexible, opportunistic and reactive to the challenging competitive context of the modern economy. This is why Competitive Strategy and War Gaming is becoming an increasingly important business tool, yet if executed incorrectly can be a complete waste of time for those involved.

We've found 3 critical rules for initiating war gaming that actually works:

1. Only use war gaming when there is a burning platform, a critical competitor threat or disruptive strategic issue that needs a specific plan

All too often war gaming is used as a general exploration of the market, competition, or as an exec bonding exercise. This tends to result in general output, little tangible action and a string of bad innovation ideas. War-gaming focused on a real and specific issue can result in:

  • Deep competitor insight
  • Specific strategic actions and plans
  • Faster response and reaction
  • Greater leadership confidence and commitment

If war gaming is an option for your team, challenge yourself to focus on the most important competitive issue or competitor. Greater focus will result in more impactful output.

2. Profound insight is fundamental in order to explore the bigger issues

The right insight is critical to making war gaming work. In order to make new discoveries and avoid trapping teams with flawed assumptions, it must be extracted from a variety of data sources and taken to a deeper level. Done correctly, it’s amazing what you can do. You can build clear views on many opaque issues like:

  • Robust competitor P&Ls
  • Manufacturing capacity and strategy
  • Route to market plans
  • Pricing strategies
  • Team profiles and structure

Challenge your approach to competitor insight gathering. Don’t do war gaming unless you can bring new, robust insight to the table.

3. Force your team to genuinely think like your competitor

It’s not easy to genuinely think like a competitor. We usually bring years of baggage and assumptions to the table. To make it work, you have to change people’s perspectives. There are a range of methods and tools to jolt leadership teams into another reality without casting your own organisation’s shadow onto it.

One approach we have pioneered with clients is a profiling methodology that helps identify how the competitor thinks and behaves. From there, it’s possible to profile your own team and identify those most likely to think and behave like the competitor, using those insights to challenge the team’s potentially biased behaviours and assumptions.

Make sure you do everything you can to help your teams walk in the shoes of your competitor. Go beyond lazy assumptions and bias.

An effective war gaming programme can help you understand the competitor at a deeper level. A powerful combination of focused insight and disruptive techniques can truly help businesses better prepare for competitive attacks. It helps build more robust, adaptable and ultimately successful strategies.

*PWC Global CEO study 2015