Business As War

In move two as the fog of war began to thicken, the simulation accelerated. The newsletters detailed further changes in the regulatory environment, major technological developments, acquisition opportunities, and juicy rumors about competitors. The consequences of strategic choices were already becoming clear. Now the teams had only four hours to work up the detailed decisions that could decisively determine the outcome of the game.

The next day the two teams received the results of their second moves and met to prepare move three. Here two new developments kicked in. First, the teams were given less time to make their moves, picking up the pace even more. Second - perhaps as a direct consequence of the faster pace - teamwork emerged as the critical feature of the exercise.

Two different styles of teamwork emerged. The blue team worked as one group to develop its arena-by-arena decisions. The green team broke into smaller groups, each of which focused on different sets of choices. One team was reflective and contemplative in its work style; the other was boisterous and aggressive.

By the end of move three, all the substantive and strategic issues were on the table. At this point, the teams were testing themselves - and being tested - on whether they had developed a consistent and coherent view of the world. Had they, in fact, fashioned a strategy that could fit rapidly changing circumstances? Had they consistently executed it? Could they convert informed choice into timely action?

At the end of the game, the two teams came together to learn the results and reflect on the experience. In fact, the outcome of the simulation confirmed the larger point of the exercise: the value of competitive simulation is not in the computer's output but in the players' input. There was no clear winner. The teams had settled on vastly different strategic directions. The green team had developed a shrewd strategy for working with competitors who were also valued customers. The blue team had focused on heavy investments in new technologies and future growth opportunities. The results: the green team won based on stock price, the blue team won based on other financial measurements. Neither strategy was ultimately "more right" than the other.

The investment in the simulation produced a fluid, dynamic, credible process backed by sophisticated, powerful technology. But the real lessons of the war game were only partly - and least significantly - quantitative. The real value was interpersonal and organizational: the simulation exposed the company politics and undiscussable human issues that exist in every large-scale organization. The players learned much about strategy; they learned even more about teamwork.

The Lessons of War

Top executives need a chance to experience change. They need to practice, to rehearse. Simulation provides just that opportunity. The players in the war game get to try their hand at a realistic, interactive demonstration. And when competitive reality asserts itself in the game results, they learn the consequences of different strategic choices. It is practice in the best sense: learning by doing.

Just as important, a simulation exercise reveals a list of action items that the team needs to focus on after the simulation, and the barriers that can keep those items from being accomplished. Both the list and the barriers need to be preserved. The list of action items can become the transition to action following the simulation. But the barriers can become the more important list - they are the obstacles that need to be cleared for significant change to occur.

But the real lesson of the game, like the real lesson of war, is about teamwork. The dirty little secret in most companies is that senior executives lack what the military calls "unit cohesion." With strong unit cohesion, an outfit has a high degree of battle readiness; without it, even the best-equipped outfit is unprepared for combat.

In most companies, executive teams are stretched thin; their lives are fragmented and compartmentalized. Team members may not even see each other that often. So they never learn to trust each other; in fact, they often view each other as internal competitors. When they do get together to make a decision, they bring great ignorance and distraction, and little urgency or trust.

Competitive simulation builds teamwork. Just as it practices strategic integration, it practices human integration. This is the final, most important connection between the art of waging war and the work of doing business.

After World War II, the US military commissioned S.L.A. Marshall, a Harvard historian, to do a remarkable study. The question he was asked to research was, literally, why are men willing to die in war? Marshall was allowed to advance and test a variety of explanations. Patriotism - people would die for their country. Or family - men would fight and die to protect their wives and children. The answer that finally emerged was small-group integrity. In a group of people where each is truly committed to the others, no one will be the first to run. So they all stand and fight together.