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“Execution excellence through disciplined rehearsal”


  DR. PAUL A. ROMAN, CD, PhD, P.Eng   LCOL (Retd) FRED M. AUBIN, CD, MCGI




© SRTC & QSB 2013
….and if this is what you were expecting today,




                    …. you are about to be sorely disappointed
© SRTC & QSB 2013
IN OUR JOURNEY FROM HERE….                      ….TO HERE



                    “What military
                    skills, procedures, doctrine
                    s, methodologies and
                    disciplines from the
                    profession of arms have
                    the most traction in the
                    commercial world”?




                    “More importantly, which
                    ones would fill unique
                    capability gaps in the
                    commercial world” ?



© SRTC & QSB 2013
…because everyone knows the military are experts at strategy!




© SRTC & QSB 2013
                                                                     4
Despite this historic anomaly, the possibilities were endless:

                          Strategic Competitive Intelligence
        Strategic                                                  Strategic
       Competitive                                                 Mission
        Targeting                                                  Analysis


                                                                 Corporate
                                                                 Centres of
                                                                  Gravity


                                                       Contingencies, Branc
     Strategic Plan Development
                                                        h Plans & Sequels
         & Campaign Design


                    Strategic Execution, Management & Refinement

© SRTC & QSB 2013
                                                                               5
The Strategic Execution Challenge


      If you are in an adversarial and
      competitive business
      environment, how do you
      evaluate the various courses
      of action open to you?




                                         How do you know whether
                                         your strategy is truly
                                         comprehensive, integrated, ad
                                         aptive and networked?


© SRTC & QSB 2013
                                                                         6
The Strategic Execution Challenge



     How do you test your plans
     before you execute them?




                                  How do you test your decision
                                  support structures?

                                  How do you put your plan
                                  under realistic stress before
                                  execution?


© SRTC & QSB 2013
                                                                  7
The Strategic Execution Challenge

         How do you establish, align and
         integrate your corporate
         authorities, responsibilities and
         accountabilities?

         Are they aligned with the actual
         decisions that need to be made?



                                       Who plays the role of your
                                       adversary, your competition, or
                                       your clients?

                                       Who is your BAD GUY?


© SRTC & QSB 2013
                                                                         8
The Strategic Execution Challenge



      How is the feedback
      presented to your executive
      leadership prior to
      execution?




                                    What separates a great plan
                                    from a self-fulfilling prophecy,

                                    or…..

                                    a self-licking ice-cream cone?


© SRTC & QSB 2013
                                                                       9
The Military Challenge versus The Business Challenge




                               How are your requirements for
                               Disciplined
                               Testing, Refinement, Rehearsal
                               & Execution different than
                               those of the military?




                                    Short Answer: they’re not.




© SRTC & QSB 2013
                                                                 10
The Military Challenge versus The Business Challenge
      In business, as in
      battle, INTELLIGENCE, STRATE
      GY, PLANNING, DECISION
      MAKING and EXECUTION, are
      HUMAN ACTIVITIES and the
      truest test of those things can
      only be accomplished with
      human beings in the loop.




                                        Tracing a Gantt Chart or
                                        doing the Six Sigma street
                                        dance is a poor substitute.

© SRTC & QSB 2013
                                                                      11
The Military Challenge versus The Business Challenge




                                         The best way to rehearse is
                                         if the players that are testing
                                         the plan are the very people
                                         that will eventually have to
                                         make critical decisions in the
                                         execution of the plan.



   ….and do it in a way that ensures your decision support SIMULATION
                       ……. promotes decision support STIMULATION


© SRTC & QSB 2013
                                                                           12
How did we do it in the military?


     Simply, we wargamed
     every course of action
     before committing to a
     preferred strategy or
     plan.




© SRTC & QSB 2013
                                         13
How did we do it in the military?

                                  We rehearsed by
                                  wargaming any and all
                                  commanders that had to
                                  make decisions in the
                                  execution, or
                                  synchronization of that
                                  plan.




© SRTC & QSB 2013
                                                            14
How did we do it in the military?

      We rehearsed by
      wargaming the actions
      of a realistic adversary in
      a realistic operational
      environment.




© SRTC & QSB 2013
                                         15
How did we do it in the military?

                                   We wargamed in a
                                   cooperative leadership and
                                   learning environment that
                                   believed that sweat and tears
                                   in a wargame were preferable
                                   to blood and tears on the
                                   battlefield.




© SRTC & QSB 2013
                                                                   16
How did we do it in the military?


                                   So, what’s the equivalent
                                   of blood, sweat and tears
                                   on your corporate
                                   battlefield?




© SRTC & QSB 2013
                                                               17
The Strategic Competitive Advantage

                                Wargame Hindsight
                                     becomes
                                Business Foresight




© SRTC & QSB 2013
                                                     18
What is Wargaming?

      Wargames are real-
      time, action-reaction, role-
      playing workshops that pit your
      key real-life decision makers
      and managers (Blue Team) …



                                        ….against real-time competitive
                                        adversaries (Red Team)….




          …and disciplined by an
          executive level White team.

© SRTC & QSB 2013
                                                                          19
It’s a game in name only.
     Wargaming is a methodological discipline to test your plans that is
     also designed to promote:

                                        • risk mitigation,

                                        • innovation,

                                        • mechanisms of discovery for
                                          leadership,

                                        • mechanisms of voice for your
                                          teams

                                        • real-time organizational learning
                                          for all.

© SRTC & QSB 2013
                                                                              20
It’s a game in name only.

                                     The aim of wargaming is to
                                     ensure continuous
                                     improvement in your ability to
                                     compete and win on your
                                     corporate battlefield.




     The most important element of
     Wargaming is not the tool
     used, but the people who
     participate.

© SRTC & QSB 2013
                                                                      21
It’s a game in name only.

     Wargaming is a conscious attempt to
     visualize the flow of business
     operations, given joint
     strengths, weaknesses, dispositions, c
     apabilities and possible courses of
     actions available to business actors in
     a given business sector and
     environment.



                                          ……and it’s the best way of
                                          getting into your competitor’s
                                          head, their decision cycle, their
                                          OODA loop.



© SRTC & QSB 2013
                                                                              22
Its action – reaction - counteraction
    Wargaming is a disciplined role
    playing activity where key actors
    react to critical events using an
    action / reaction / counteraction
    method of friendly and competitor
    interaction.

    Each step in the execution of
    the plan or strategy is examined
    in the following detail:
         • Action
         • Reaction
         • Counteraction
         • Observations
         • Record
         • Review
         • Learning
© SRTC & QSB 2013
                                             23
Wargame preparation is a LEADERSHIP activity!
      Your corporate leadership, strategy, plan and business
      environment are the foundations to preparing, designing and
      executing your Wargame.

                                   Mission
                                   Analysis


                                     Constraints

 Vision                               Restraints


                                                       If there’s a problem with any
                                                       of these, the wargame will
                                         Assumptions
                                                       show it.




© SRTC & QSB 2013
                                                                                   24
Wargame conduct is a LEADERSHIP activity!
      Every event is tested against a competitive reality.



  Action
   Reaction
                      Action
     Counteraction
                       Reaction
       Observations                       Action
                         Counteraction
         Record                            Reaction
                           Observations
           Review                            Counteraction    Action
                             Record
             Learning                          Observations    Reaction
                               Review
                                                 Record          Counteraction
                                 Learning
                                                   Review          Observations
                                                     Learning        Record
                                                                       Review
                                                                         Learning




© SRTC & QSB 2013
                                                                                    25
Wargame lessons are a LEADERSHIP activity!

      After Action Reviews (AARs) are a LEADERSHIP responsibility
      and are conducted by your corporate leadership, facilitated by the
      White Team Lead and supported by the Blue and Red Leads.

      • They are inclusive but
        disciplined.

      • Must be constructive
        and detailed.

      • Egos are left at the
        door.

      • Lever innovation by
        posing “what if”
        questions.

© SRTC & QSB 2013
                                                                           26
The only restriction is LEADERSHIP’s imagination!


                               • Scale?



                               • Scope?



                               • Focus?



                               • Method?


  Wargaming is a HUMAN activity – the SIMULATION must provide STIMULATION
© SRTC & QSB 2013
                                                                            27
What type of Wargame suits you best?

     There are 3 fundamental types of Wargames:


     • The Course of Action (COA) Wargame




     • The Rehearsal Wargame




     • The Red Team Exercise




© SRTC & QSB 2013
                                                  28
Course of Action Wargaming

     • These are a series of two of more
       sequential and comparable
       wargames involving the same
       conditions, actors and weighting
       criteria to determine the most
       viable options available in terms
       of risk, execution, pay off, etc.

                                   • This is a decision support tool for
                                     senior executives to recommend a
                                     distinct plan of action to corporate
                                     leadership.


     • Red & Blue players are normally drawn from the extant pool of
       executives normally involved in your company’s strategic and
       operational planning process.
© SRTC & QSB 2013
                                                                            29
Course of Action Wargaming Example: Problem

        Situation: Cadbury Schweppes Purchase of Adams for $4.2 Billion

        Problem: Stagnant Adams share price and bleeding market share.

        Mission: Demonstrate strong commercial and financial success
        quickly to restore share price.

                 Adams                                        Wrigley
         Global #2 Chewing gum                        Global #1 Chewing gum




                          Business War Games, Ben Gilad, 2009
© SRTC & QSB 2013
Course of Action Wargaming Example: Conduct


       • Three day Course of Action War Game

       • Involved 50-60 primarily internal business leaders



                 Adams                                      Wrigley
         Global #2 Chewing gum                      Global #1 Chewing gum




                        Business War Games, Ben Gilad, 2009
© SRTC & QSB 2013
Course of Action Wargaming Example: Results
  •         Cadbury recovered costs a year early
                                                         • “From my perspective, these
                                                           accomplishments reflect the focus
  •         Adams core brands grew by more than            and effort of a great team of people
            7% and margins returned to 19%                 across multiple fronts and informed by
                                                           an outstanding “war games” process
                                                           of business and financial self-
                                                           analysis…”
  •         Trident (Adams) sales doubled making it
            the top brand in the world                   • Todd Stitzer
                                                         • CEO Cadbury
                                                         • March 2008
  •         Adam’s gum share in the US grew from
            25% - 34%. Wrigley’s remained flat at
            34%

  •         Globally Adams went from 7% - 27 %
            while Wrigley’s remained flat at 34%

  •         Share revenue averaged more than 20%
            driven by a share price that quickly
            recovered the 30% initial loss and moved
            on to new heights.
                                 Business War Games, Ben Gilad, 2009
© SRTC & QSB 2013
Rehearsal Wargaming

      • A Rehearsal Wargame is a
        comprehensive exercise to
        test a single accepted plan
        prior to its execution.




                                      • The BLUE TEAM involves all
                                        senior executives who must
                                        make decisions and manage
                                        activities in the execution of that
                                        plan and confined to their
                                        accepted decision support roles.


        • The RED TEAM is drawn from corporate leadership team
          or subject matter experts.
© SRTC & QSB 2013
Rehearsal Wargaming Example: Objective




       • Situation: Biogen new drug for MS– Fall 1995

       • Task: Validate Pricing and Market Strategies
         for New Product Launch

       • Focus: Premium pricing strategy based upon a
         quality guarantee – full refund if condition
         deteriorates




                       Wargaming for Leaders. Herman, Frost & Kurtz, 2009
© SRTC & QSB 2013
Rehearsal Wargaming Example: Conduct

 • Three move game

 • Primarily internal role players (approximately 20)

 • 4 competitive teams and a market team

 • Move 1 – early success but confusion over the
   guarantee resulting in regulated requirement for
   a reserve fund – stock price drops

 • Move 2 – guarantee adjustments made and
   prices are discounted. Incumbent also discounts
   and improves delivery mechanism

 • Move 3 – new drugs on the market
                    Wargaming for Leaders. Herman, Frost & Kurtz, 2009
© SRTC & QSB 2013
Rehearsal Wargaming Foresights Generated:

   • The need to convince Medicare of the drug’s
     advantages, otherwise customers would have
     difficulty getting the drug covered

   • The need to field a deluge of questions from
     patients wanting details about the guarantee




© SRTC & QSB 2013
                    Wargaming for Leaders. Herman, Frost & Kurtz, 2009
Rehearsal Wargaming Example: Results
   For the actual launch:
    • price was competitive
    • guarantee softened.

   As of 2003, Biogen claimed their MS
   drug to be the market leader in the
   US.

   Being bold in marketing a new product
   can pay big dividends, but the need
   for caution in highly regulated
   industries became readily apparent in
   the game.




© SRTC & QSB 2013
                    Wargaming for Leaders. Herman, Frost & Kurtz, 2009
RED TEAMING

   • A Red Team Exercise is similar to a
     rehearsal Wargame with the
     exception that none of the Red Team
     players are drawn from company’s
     decision support stakeholders.



                                  • Each RED TEAM player is an outside
                                    subject matter expert that is not a
                                    company stakeholder and is only
                                    given a reasonable amount of
                                    information that a normal competitor
                                    would have.
    • The RED TEAM’s role is not merely to test the plan as
      adversarial players but rather to put it under extreme competitive
      stress.
© SRTC & QSB 2013
RED TEAMING EXAMPLE

 • Operation Overlord was the
   operation that launched the
   invasion of German-occupied
   western Europe during World War
   II by Allied forces. commencing
   on 6 June 1944.

 • A 12,000-plane airborne assault
   preceded an amphibious assault
   involving almost 7,000 vessels.

 • Nearly 160,000 troops crossed
   the English Channel on 6 June;
   more than three million troops
   were in France by the end of
   August




© SRTC & QSB 2013
RED TEAMING EXAMPLE

   • During the planning
     phase, a multidisciplinary
     staff of over 150 was
     created to shadow the
     OVERLORD planning team.

   • Their only mission was to
     develop reasonable
     challenges to the plan from
     a
     friendly, enemy, environment
     al and chance perspective.
     They were ordered to find
     ways to make it fail.

   • Over 4 months, they established 700 issues which were exercised
     and eventually dictated changes to the OVERLORD plan.
© SRTC & QSB 2013
RED TEAMING EXAMPLE: RESULTS
   • OVERLOAD is historically
     acknowledged as a huge
     success.

   • Nonetheless, 30% of the
     RED TEAM’s predictions still
     came to pass despite
     changes to the revised
     OVERLORD plan.

   • However, since
     commanders and staffs
     were prepared for these
     issues, branch plans and
     sequels were already
     prepared.


© SRTC & QSB 2013
RED TEAMING EXAMPLE – WHEN YOU DON’T DO IT


                    OVERLOAD    MARKET GARDEN




                    GOOD           BAD


© SRTC & QSB 2013
In summary – wargaming is all about:

   • Evaluating courses of action to recommend a
     distinct plan of action to corporate leadership;

   • Levering rehearsals as a comprehensive
     exercise under conditions of extreme
     competitive stress to test critical plans prior to
     execution;

   • Reinforcing Unity of Thought, Purpose and
     Action throughout your corporate team through
     action/reaction/counter-reaction role playing;

   • Visualizing of the flow of business
     operations, given joint
     strengths, weaknesses, dispositions, capabilitie
     s and possible courses of actions available to
     business actors in a given business sector and
     environment.
             WARGAME HINDSIGHT becomes BUSINESS FORESIGHT
© SRTC & QSB 2013
                                                            43
Want to learn more?




© SRTC & QSB 2013
                           44
Want to learn more?
                                     Conducted over 3 days of formal
                                     instruction and practical scenario-based
                                     exercises, the program will:

                                     • Illustrate how Wargaming provides a
                                       unique competitive advantage.

                                     • Utilize Wargaming techniques to develop
                                       comparative and equitable strategic
                                       courses of action.

                                     • Demonstrate Wargaming as a real-
                                       time, action-reaction, role-playing
                                       methodology that pits your real-life
                                       decision-makers and managers against
                                       real-time adversaries.

                                     • Teach Wargaming techniques as a
                      TORONTO          disciplined baseline for strategic
                                       execution rehearsal.
                    13-15 May 2013
© SRTC & QSB 2013
                                                                                 45
Food for thought?
     Dancers rehearse                          Shouldn’t You?



                         Militaries rehearse




      Actors rehearse




© SRTC & QSB 2013
                                                                46
“Execution excellence through disciplined rehearsal”


  DR. PAUL A. ROMAN, CD, PhD, P.Eng   LCOL (Retd) FRED M. AUBIN, CD, MCGI




© SRTC & QSB 2013

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Strategic Wargaming For Business Presentation to Deloitte's 50 Best Managed Companies Symposium

  • 1. “Execution excellence through disciplined rehearsal” DR. PAUL A. ROMAN, CD, PhD, P.Eng LCOL (Retd) FRED M. AUBIN, CD, MCGI © SRTC & QSB 2013
  • 2. ….and if this is what you were expecting today, …. you are about to be sorely disappointed © SRTC & QSB 2013
  • 3. IN OUR JOURNEY FROM HERE…. ….TO HERE “What military skills, procedures, doctrine s, methodologies and disciplines from the profession of arms have the most traction in the commercial world”? “More importantly, which ones would fill unique capability gaps in the commercial world” ? © SRTC & QSB 2013
  • 4. …because everyone knows the military are experts at strategy! © SRTC & QSB 2013 4
  • 5. Despite this historic anomaly, the possibilities were endless: Strategic Competitive Intelligence Strategic Strategic Competitive Mission Targeting Analysis Corporate Centres of Gravity Contingencies, Branc Strategic Plan Development h Plans & Sequels & Campaign Design Strategic Execution, Management & Refinement © SRTC & QSB 2013 5
  • 6. The Strategic Execution Challenge If you are in an adversarial and competitive business environment, how do you evaluate the various courses of action open to you? How do you know whether your strategy is truly comprehensive, integrated, ad aptive and networked? © SRTC & QSB 2013 6
  • 7. The Strategic Execution Challenge How do you test your plans before you execute them? How do you test your decision support structures? How do you put your plan under realistic stress before execution? © SRTC & QSB 2013 7
  • 8. The Strategic Execution Challenge How do you establish, align and integrate your corporate authorities, responsibilities and accountabilities? Are they aligned with the actual decisions that need to be made? Who plays the role of your adversary, your competition, or your clients? Who is your BAD GUY? © SRTC & QSB 2013 8
  • 9. The Strategic Execution Challenge How is the feedback presented to your executive leadership prior to execution? What separates a great plan from a self-fulfilling prophecy, or….. a self-licking ice-cream cone? © SRTC & QSB 2013 9
  • 10. The Military Challenge versus The Business Challenge How are your requirements for Disciplined Testing, Refinement, Rehearsal & Execution different than those of the military? Short Answer: they’re not. © SRTC & QSB 2013 10
  • 11. The Military Challenge versus The Business Challenge In business, as in battle, INTELLIGENCE, STRATE GY, PLANNING, DECISION MAKING and EXECUTION, are HUMAN ACTIVITIES and the truest test of those things can only be accomplished with human beings in the loop. Tracing a Gantt Chart or doing the Six Sigma street dance is a poor substitute. © SRTC & QSB 2013 11
  • 12. The Military Challenge versus The Business Challenge The best way to rehearse is if the players that are testing the plan are the very people that will eventually have to make critical decisions in the execution of the plan. ….and do it in a way that ensures your decision support SIMULATION ……. promotes decision support STIMULATION © SRTC & QSB 2013 12
  • 13. How did we do it in the military? Simply, we wargamed every course of action before committing to a preferred strategy or plan. © SRTC & QSB 2013 13
  • 14. How did we do it in the military? We rehearsed by wargaming any and all commanders that had to make decisions in the execution, or synchronization of that plan. © SRTC & QSB 2013 14
  • 15. How did we do it in the military? We rehearsed by wargaming the actions of a realistic adversary in a realistic operational environment. © SRTC & QSB 2013 15
  • 16. How did we do it in the military? We wargamed in a cooperative leadership and learning environment that believed that sweat and tears in a wargame were preferable to blood and tears on the battlefield. © SRTC & QSB 2013 16
  • 17. How did we do it in the military? So, what’s the equivalent of blood, sweat and tears on your corporate battlefield? © SRTC & QSB 2013 17
  • 18. The Strategic Competitive Advantage Wargame Hindsight becomes Business Foresight © SRTC & QSB 2013 18
  • 19. What is Wargaming? Wargames are real- time, action-reaction, role- playing workshops that pit your key real-life decision makers and managers (Blue Team) … ….against real-time competitive adversaries (Red Team)…. …and disciplined by an executive level White team. © SRTC & QSB 2013 19
  • 20. It’s a game in name only. Wargaming is a methodological discipline to test your plans that is also designed to promote: • risk mitigation, • innovation, • mechanisms of discovery for leadership, • mechanisms of voice for your teams • real-time organizational learning for all. © SRTC & QSB 2013 20
  • 21. It’s a game in name only. The aim of wargaming is to ensure continuous improvement in your ability to compete and win on your corporate battlefield. The most important element of Wargaming is not the tool used, but the people who participate. © SRTC & QSB 2013 21
  • 22. It’s a game in name only. Wargaming is a conscious attempt to visualize the flow of business operations, given joint strengths, weaknesses, dispositions, c apabilities and possible courses of actions available to business actors in a given business sector and environment. ……and it’s the best way of getting into your competitor’s head, their decision cycle, their OODA loop. © SRTC & QSB 2013 22
  • 23. Its action – reaction - counteraction Wargaming is a disciplined role playing activity where key actors react to critical events using an action / reaction / counteraction method of friendly and competitor interaction. Each step in the execution of the plan or strategy is examined in the following detail: • Action • Reaction • Counteraction • Observations • Record • Review • Learning © SRTC & QSB 2013 23
  • 24. Wargame preparation is a LEADERSHIP activity! Your corporate leadership, strategy, plan and business environment are the foundations to preparing, designing and executing your Wargame. Mission Analysis Constraints Vision Restraints If there’s a problem with any of these, the wargame will Assumptions show it. © SRTC & QSB 2013 24
  • 25. Wargame conduct is a LEADERSHIP activity! Every event is tested against a competitive reality. Action Reaction Action Counteraction Reaction Observations Action Counteraction Record Reaction Observations Review Counteraction Action Record Learning Observations Reaction Review Record Counteraction Learning Review Observations Learning Record Review Learning © SRTC & QSB 2013 25
  • 26. Wargame lessons are a LEADERSHIP activity! After Action Reviews (AARs) are a LEADERSHIP responsibility and are conducted by your corporate leadership, facilitated by the White Team Lead and supported by the Blue and Red Leads. • They are inclusive but disciplined. • Must be constructive and detailed. • Egos are left at the door. • Lever innovation by posing “what if” questions. © SRTC & QSB 2013 26
  • 27. The only restriction is LEADERSHIP’s imagination! • Scale? • Scope? • Focus? • Method? Wargaming is a HUMAN activity – the SIMULATION must provide STIMULATION © SRTC & QSB 2013 27
  • 28. What type of Wargame suits you best? There are 3 fundamental types of Wargames: • The Course of Action (COA) Wargame • The Rehearsal Wargame • The Red Team Exercise © SRTC & QSB 2013 28
  • 29. Course of Action Wargaming • These are a series of two of more sequential and comparable wargames involving the same conditions, actors and weighting criteria to determine the most viable options available in terms of risk, execution, pay off, etc. • This is a decision support tool for senior executives to recommend a distinct plan of action to corporate leadership. • Red & Blue players are normally drawn from the extant pool of executives normally involved in your company’s strategic and operational planning process. © SRTC & QSB 2013 29
  • 30. Course of Action Wargaming Example: Problem Situation: Cadbury Schweppes Purchase of Adams for $4.2 Billion Problem: Stagnant Adams share price and bleeding market share. Mission: Demonstrate strong commercial and financial success quickly to restore share price. Adams Wrigley Global #2 Chewing gum Global #1 Chewing gum Business War Games, Ben Gilad, 2009 © SRTC & QSB 2013
  • 31. Course of Action Wargaming Example: Conduct • Three day Course of Action War Game • Involved 50-60 primarily internal business leaders Adams Wrigley Global #2 Chewing gum Global #1 Chewing gum Business War Games, Ben Gilad, 2009 © SRTC & QSB 2013
  • 32. Course of Action Wargaming Example: Results • Cadbury recovered costs a year early • “From my perspective, these accomplishments reflect the focus • Adams core brands grew by more than and effort of a great team of people 7% and margins returned to 19% across multiple fronts and informed by an outstanding “war games” process of business and financial self- analysis…” • Trident (Adams) sales doubled making it the top brand in the world • Todd Stitzer • CEO Cadbury • March 2008 • Adam’s gum share in the US grew from 25% - 34%. Wrigley’s remained flat at 34% • Globally Adams went from 7% - 27 % while Wrigley’s remained flat at 34% • Share revenue averaged more than 20% driven by a share price that quickly recovered the 30% initial loss and moved on to new heights. Business War Games, Ben Gilad, 2009 © SRTC & QSB 2013
  • 33. Rehearsal Wargaming • A Rehearsal Wargame is a comprehensive exercise to test a single accepted plan prior to its execution. • The BLUE TEAM involves all senior executives who must make decisions and manage activities in the execution of that plan and confined to their accepted decision support roles. • The RED TEAM is drawn from corporate leadership team or subject matter experts. © SRTC & QSB 2013
  • 34. Rehearsal Wargaming Example: Objective • Situation: Biogen new drug for MS– Fall 1995 • Task: Validate Pricing and Market Strategies for New Product Launch • Focus: Premium pricing strategy based upon a quality guarantee – full refund if condition deteriorates Wargaming for Leaders. Herman, Frost & Kurtz, 2009 © SRTC & QSB 2013
  • 35. Rehearsal Wargaming Example: Conduct • Three move game • Primarily internal role players (approximately 20) • 4 competitive teams and a market team • Move 1 – early success but confusion over the guarantee resulting in regulated requirement for a reserve fund – stock price drops • Move 2 – guarantee adjustments made and prices are discounted. Incumbent also discounts and improves delivery mechanism • Move 3 – new drugs on the market Wargaming for Leaders. Herman, Frost & Kurtz, 2009 © SRTC & QSB 2013
  • 36. Rehearsal Wargaming Foresights Generated: • The need to convince Medicare of the drug’s advantages, otherwise customers would have difficulty getting the drug covered • The need to field a deluge of questions from patients wanting details about the guarantee © SRTC & QSB 2013 Wargaming for Leaders. Herman, Frost & Kurtz, 2009
  • 37. Rehearsal Wargaming Example: Results For the actual launch: • price was competitive • guarantee softened. As of 2003, Biogen claimed their MS drug to be the market leader in the US. Being bold in marketing a new product can pay big dividends, but the need for caution in highly regulated industries became readily apparent in the game. © SRTC & QSB 2013 Wargaming for Leaders. Herman, Frost & Kurtz, 2009
  • 38. RED TEAMING • A Red Team Exercise is similar to a rehearsal Wargame with the exception that none of the Red Team players are drawn from company’s decision support stakeholders. • Each RED TEAM player is an outside subject matter expert that is not a company stakeholder and is only given a reasonable amount of information that a normal competitor would have. • The RED TEAM’s role is not merely to test the plan as adversarial players but rather to put it under extreme competitive stress. © SRTC & QSB 2013
  • 39. RED TEAMING EXAMPLE • Operation Overlord was the operation that launched the invasion of German-occupied western Europe during World War II by Allied forces. commencing on 6 June 1944. • A 12,000-plane airborne assault preceded an amphibious assault involving almost 7,000 vessels. • Nearly 160,000 troops crossed the English Channel on 6 June; more than three million troops were in France by the end of August © SRTC & QSB 2013
  • 40. RED TEAMING EXAMPLE • During the planning phase, a multidisciplinary staff of over 150 was created to shadow the OVERLORD planning team. • Their only mission was to develop reasonable challenges to the plan from a friendly, enemy, environment al and chance perspective. They were ordered to find ways to make it fail. • Over 4 months, they established 700 issues which were exercised and eventually dictated changes to the OVERLORD plan. © SRTC & QSB 2013
  • 41. RED TEAMING EXAMPLE: RESULTS • OVERLOAD is historically acknowledged as a huge success. • Nonetheless, 30% of the RED TEAM’s predictions still came to pass despite changes to the revised OVERLORD plan. • However, since commanders and staffs were prepared for these issues, branch plans and sequels were already prepared. © SRTC & QSB 2013
  • 42. RED TEAMING EXAMPLE – WHEN YOU DON’T DO IT OVERLOAD MARKET GARDEN GOOD BAD © SRTC & QSB 2013
  • 43. In summary – wargaming is all about: • Evaluating courses of action to recommend a distinct plan of action to corporate leadership; • Levering rehearsals as a comprehensive exercise under conditions of extreme competitive stress to test critical plans prior to execution; • Reinforcing Unity of Thought, Purpose and Action throughout your corporate team through action/reaction/counter-reaction role playing; • Visualizing of the flow of business operations, given joint strengths, weaknesses, dispositions, capabilitie s and possible courses of actions available to business actors in a given business sector and environment. WARGAME HINDSIGHT becomes BUSINESS FORESIGHT © SRTC & QSB 2013 43
  • 44. Want to learn more? © SRTC & QSB 2013 44
  • 45. Want to learn more? Conducted over 3 days of formal instruction and practical scenario-based exercises, the program will: • Illustrate how Wargaming provides a unique competitive advantage. • Utilize Wargaming techniques to develop comparative and equitable strategic courses of action. • Demonstrate Wargaming as a real- time, action-reaction, role-playing methodology that pits your real-life decision-makers and managers against real-time adversaries. • Teach Wargaming techniques as a TORONTO disciplined baseline for strategic execution rehearsal. 13-15 May 2013 © SRTC & QSB 2013 45
  • 46. Food for thought? Dancers rehearse Shouldn’t You? Militaries rehearse Actors rehearse © SRTC & QSB 2013 46
  • 47. “Execution excellence through disciplined rehearsal” DR. PAUL A. ROMAN, CD, PhD, P.Eng LCOL (Retd) FRED M. AUBIN, CD, MCGI © SRTC & QSB 2013

Notas do Editor

  1. Wargaming is a LEADERSHIP activity. Get direction from corporate leadership on:Defining the problem space.Establish CEO’s criteria for success.Discuss Wargaming methods and options.Agree on whether this is a test of the plan, a rehearsal for execution, or both.Agree on organizational learning requirements.Agree on business targets and objectives to be put at risk / tested.
  2. The wargaming process can be as simple as a detailed narrative or master events list (as dictated by your plan or course of action) that describes:actions, probable reactions, counteractions, assets, and resources to be utilized.
  3. Validation of corporate strategic assumptionsShared Situational Awareness amongst leadershipConfirmation or refinement of strategic centres of gravity and factorsConfirmation or refinement of your critical competitive, commercial, business or market intelligence requirementsImproved synchronization and alignment of business objectives and activitiesConfirmation or refinement of the comparative pros / cons / strength / weaknesses of particular plans and courses of action (COAs)Confirmation or refinement of your mission analysisConfirmation or refinement of your corporate decision support requirementsDetermination and confirmation of your strategic high value targets…. and those of your competitorsConfirmation or refinement of business targets and markets, clients, products and R&DConfirmation or refinement of your corporate structure and identification of organizational orphans and “enfantsterribles”Identification of branch plans, sequels, new markets and focused opportunitiesRefined performance measuresImproved corporate communication through disciplined and balanced feedback
  4. Scalability: Wargames can be utilized at all levels from strategic to tactical level and can also be progressively nested as such. Focus: They can be used to comprehensively test a particular strategy or campaign options or they can be focused to test a singular discreet high risk business initiative or activity. Wargames can test the integration and alignment of an entire spectrum of business activities or discreet activities and initiatives such as: Change Management, Cultural Resistance to Change, Institutional Inertia, Corporate Unity, Commercial Intelligence, Information Security, Brand Protection, etc. The wargaming process can be as simple as a detailed narrative or master events list (as dictated by your plan or course of action) that describes:event, assets, and resources to be utilized. A more comprehensive version adds operational sketches, your business execution graphics and notes to the narrative process in order to gain a clearer picture of how the plan will be executed within a particular business environment. The most sophisticated and perhaps most complex form of Wargaming is modern, computer-aided modeling and simulation.There’s a dangerous seduction here though .....fancier may not always be better.
  5. March 2003: Cadbury Scwepps under the leadership of Todd Scwitzer purchase Adams from Pfizer.Adams Brands: Trident, Dentyne, Chiclets, Clorets, Halls and Certs.Adams revenue was flat, margins had dropped from 19 to 12% and was bleeding market share to Wrigley globally and in the USThe purchase cost Cadbury Schweppes dearly as financial markets perceived the Adams acquisition as expensive and complex with at that time, and inexperienced leader! The Cadbury Schweppes share price fell by almost 30 percent.Mission: Demonstrate strong commercial and financial success quickly to restore share price.Target: 7% revenue growth and a return to high teen margins for the Adams businessChallenge: Where to best deploy innovation and commercial resources againts markets and competitors to the greatest effect:In Summary – The wargame was intended to allow Adams to figure out - “where to Play and How to Win
  6. Cadbury covered the cost of capital for the Adams acquisition a year earlyAdams core brands grew by more than 7% and margins returned to 19%Trident sales doubled making it the top brand in the worldAdam’s gum share in the US grew from 25% - 34%Wrigley’s remained flat at 34%Globally Adams went from 7% - 27 % while Wrigley’s remained flat at 34%TSR averaged more than 20% driven by a share price that quickly recovered the 30% initial loss and moved on to new heights.
  7. Battlefield analogy – Marketshare.Fall 1995, Biogen an innovation R&D drug company after 20 years is ready to launch their own first product – Avonex.BioGen – Fall 1995. New Drug for MSUS FDA approval was imminent and competition was fierce.Perceived competitive advantage was in delivery mechanism: a single injection once per week as opposed to multiple injections every week. Core strength had been R&D and now was entering directly into competition with many of their former clients who were bigger and far more experienced.Objective – Test pricing and market strategies in the US and Western Europe.Four competitor teams: Biogen, Schering/Berlex, Teva and Serono. – All public companies!Fewer than 20 Biogen executives were put on the competing teams to take on their own company. 3 moves projecting 4 years forward.Market team (representing customers) assessed the proposals of the competitor teams and adjusted market share accordingly. The white team converted these into representative financial statements and shareprice.Move 1 – Biogen’s product is priced well above the competition on the belief that their: “BioGen Outcome Guarantee” - if condition deteriorates there would be a full refund!
  8. http://en.wikipedia.org/wiki/Millennium_Challenge_2002$250 million. Live and computer simulationVan Riper – inappropriately constrained?Lesson about the need for free play. The never stopped and went back to fix the strategy, they brushed the weakness under the carpet and carried on. Given the resources deployed, how could they not. Lesson – bigger is not always better!