Passage 9
War games are commonly used by the military to evaluate strategies, explore scenarios and reveal unexpected weaknesses. American ships and aircraft have just begun two weeks of war games in the Gulf, prompting protests from Iran, and last week South Korea carried out an annual computerised war-game exercise.
Might war games deserve a greater role in business? Military analogies abound in the corporate world. Plenty of bosses look to Sun Tzu, an ancient Chinese general, for management tips. And in business, as in war, outcomes depend on what others do, as well as ones own actions. Yet many firms fail to think systematically about how rivals will react to their plans and traditional planning does a poor job of taking competitors responses into account, says John McDermott, head of strategy at Xerox, an office-equipment company. Corporate war games, which simulate the interactions of multiple actors in a market, provide a better way to do so.
Such games have two chief characteristics. First, players break into teams and take on the roles of fierce competitors . Second, the games involve several turns, allowing competitors not just to draw up their own strategies but to respond to the choices of others. Their popularity is rising. Booz Allen Hamilton , a consultancy, is running 100 war games a year, up from around 50 three years ago. Open Options, a Canadian strategy consultancy, has been going since 1996 and its revenue doubled last year.
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