BAH introduces a quantitative element into its games, calculating the effect of each teams strategy on their companys profits and stockmarket value at the end of each turn. Open Options takes a further step. To help Xerox understand the market dynamics of the print and copy industry, it ran a one-day workshop in which teams from Xerox took the roles of the big companies in the market, itself included. Each team identified the things their company could do to change its strategy and drew up a list of its desired outcomes; these preference trees were shared with the other teams. The results were then pumped into Open Options proprietary software tools, which played out interactions between the companies and produced a range of possible outcomes.
Mr McDermott says the games predictive power was astonishing: one forecast, that a company would start to acquire a certain group of assets within the industry, came true within six months. By shedding light on areas where companies have different priorities, the concept of preference trees helps to highlight potential trade-offs, as well as competition. Open Options charges North American clients roughly $100,000 for an engagement.
The secret of successful war-gaming does not simply lie in mathematics, however. Interaction, not algebra, is the best way to win support for a new strategy. Game-players must be senior for the same reason although having the top boss on a team can stifle feedback. Strategies also have to capture competitors hard-to-quantify corporate cultures: when designing a game, BAH seeks out employees at its clients who have actually worked at competitors for that reason. But perhaps war games greatest value lies in the way they encourage managers to think differently about the consequences of their actions. To know your enemy, you must become your enemy, as Sun Tzu would say.
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