In Story #25, I wrote about the game-like simulation of realistic situations in the business environment called Strategic Gaming. In this simulation, participants can learn about the dynamics of decisions and how competitors and other stakeholders react and counter those decisions. Strategic Gaming allows participants to understand actions and reactions by competitors, customers, and other relevant stakeholders in the business environment, and how this affects companies competing with one another.
To identify and define the game, several phases, spanning a number of weeks, are usually required. In the initial stage, the game and the key issues it addresses are defined. This includes specifying the market/geography, the industry, and the segment of the industry that is the focus of the game. Subsequently, further details are defined, including the specific competitors in the game, the regulations, and the rules of the game, which are then designed and set up in a virtual infrastructure. The focus of Strategic Gaming is mostly on the actions and reactions of players, but also on the reactions of customers and stakeholders such as shareholders and regulators.
Rules and regulations in the market apply to the Strategic Gaming environment as much as they apply to the real business environment.
The next phase involves the formation of the participating teams. Each team represents one of the major participants/competitors in the market and consists of individuals acting in their roles within the companies represented, e.g., CEO, CFO, Strategy Director, etc. The level of complexity is defined in advance: this could be carried out in a rather simplistic setup, focusing only on actions and reactions toward competitors. Alternatively, it could be broader, including the reactions of customers, shareholders, regulators, and other stakeholders, and adding the complexity of external constraints that each participating company faces. The business environment is subject to a complex set of external constraints, which might also appear suddenly (e.g., macroeconomic factors or force majeure situations such as natural disasters, diseases, wars, etc.).
Strategic Gaming creates a dynamic model of the real business environment, allowing the testing of prior assumptions, expectations, and hypotheses, and observing how players might react differently from expectations and anticipate counter-reactions. After each move, the impact of the actions taken by competitors/participants on each other is analyzed, and feedback is given on both expected and unexpected outcomes.
