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How War Games Can Help Strengthen a Competitive Intelligence Program


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How can War Games help strengthen a Competitive Intelligence program's contribution to the success of every company?

Many CI programs struggle to gain exposure and recognition within their organization and, as a result, are left vulnerable to cutbacks when external competitive forces or market conditions drive cost-cutting. How ironic that, the more threatening externalities become for a company, its CI program seems to diminish in value? Management's reflex is simple: cut "fat" processes lacking clear, tangible, difference-making impacts on decisions. Consequentially, however, they can injure the "muscle" of an otherwise productive intelligence team.

Some CI professionals have discovered that War Games (and related competitive strategy simulations) can make a tremendous difference in the way executives recognize, appreciate and reward CI's contributions to company success.

We'll discuss three ways War Games can help strengthen a competitive intelligence program. Specifically, the session will look at examples of War Games as a way to:

- Prioritize tasking and monitoring of key intelligence topics and questions
- Forecast possible future scenarios confronting the company in the market and industry
- Simulate the actions and reactions of competitors or other actors on strategic, tactical and operational decisions

How War Games Can Help Strengthen a Competitive Intelligence Program

  1. 1. How War Games Can Help Strengthen a Competitive Intelligence Program A Complimentary Webinar from Aurora WDC 12:00 Noon Eastern /// Wednesday 5 December 2012 ~ featuring ~ Tim Smith The Intelligence Collaborative #IntelCollab Arik Johnson Powered by
  2. 2. Agenda  Critical Link between Intelligence and Simulation  Is a war game the correct tool for our situation?  What it takes to design a successful war game  Forecast future scenarios to simulate competitive and market responses to our proposed strategy  Summary, Q&A, and Discussion The Intelligence Collaborative #IntelCollab Powered by
  3. 3. What we are not covering today 1 The use of generic, or “canned” war games, used to familiarize participants with the process 2 Simulation software that selects outcomes and drives the results of the game 3 The use of war games to build team work or to assess strategic smarts The Intelligence Collaborative #IntelCollab Powered by
  4. 4. An assumption about You… We are assuming for today’s webinar that you have a basic understanding of what a Competitive Simulation, or business war game, is. The Intelligence Collaborative #IntelCollab Powered by
  5. 5. The Standard CI Process, and where War Gaming Fits Identification of business issues The challenge here is to be proactive, Not just reactive. Collection Analysis War Games work best here Dissemination Results The Intelligence Collaborative #IntelCollab Powered by
  6. 6. It’s all about the Intel Most strategic planners understand that good intelligence comes before effective strategy. It is your job to remind them of it. Good intelligence product pre-game is absolutely vital. A lack of proper preparation Can lead to more harm than good. Garbage in, Garbage out! The Intelligence Collaborative #IntelCollab Powered by
  7. 7. The Two Most Common Problems 1. Many CI Programs are used more as a market research asset. They wait for tasks coming from multiple locations, with no regular interaction with those directing strategy. 2. Even worse, many CI Practitioners act as research librarians, because they are so focused on secondary research, which is admittedly overly abundant, that primary has been ignored. HUMINT need not equate to “dumpster diving”. The Intelligence Collaborative #IntelCollab Powered by
  8. 8. Access to the Commander The one area that the military does better than business… Running a successful war game will not only grant you the magic key during the development phase, but it will also keep You in the loop post-game. The Intelligence Collaborative #IntelCollab Powered by
  9. 9. One Very important Piece of the Puzzle The Intelligence Collaborative #IntelCollab Powered by
  10. 10. Your Role in Defining Purpose and Scope  Provide guidance on what the purpose of the game will be, taking into account the needs of your Sponsor and other key stakeholders  Come to the Sponsor prepared to answer questions on new entrants, potential M&A in the relevant market, and a good understanding of potential disruptors  Limiting the scope will not only reduce your workload prior to the game, it will create much more focus on the key issues your Sponsor wants explored  Most importantly – Ensure that the game is designed to deliver executable strategies and tactics that can be measured The Intelligence Collaborative #IntelCollab Powered by
  11. 11. Who Should Participate? Anyone who can Champion the planning activities post-game Those who best understand the relevant market, and have an open mind to the outcome  A broad mix of functions is most effective  Identify and include key influencers within the functional areas – those whose buy-in will help when it comes to implementation of the ideas surfaced during the game. The Intelligence Collaborative #IntelCollab Powered by
  12. 12. The Power of the Process… And what it Means for You 1. You allow the Participants to get into the mind of the entity selected and role-play their best interests 2. Through simulation, you define several valid market scenarios that can be used to generate action plans, contingency plans, or intelligence missions 3. Reinforce how important it is to use market data and competitive signals to adjust your strategy 4. The game is itself a Decision Tree that you can replay at your leisure as the real world develops to further explore outcomes from the exercise. The Intelligence Collaborative #IntelCollab Powered by
  13. 13. After-Action Sample: Competitive Highlights The table below gives a brief description of how the Market Referees felt each of the two competitive rounds played out. For more detail on how they evaluated the teams, and the reasoning behind it, please refer to the Market Team section of the report. Team Round 1 Synopsis Round 2 Synopsis Home Team • Standard, but steady • Took the feedback from the Market to heart, but were not very pro-active towards competitors • Their positioning idea was original and innovative • Did not back down to competitive messaging • Liked prioritization of customer segments Rival 1 • Strategy seemed to be all over the place in Round 1 • Did a good job of addressing customer needs and wants • Very aggressive on proven market results • Clear strategy on their product vs. ours • Broad-based attack on our launch Rival 2 • Clear leader in Round 1 • Very coherent strategy • Very clear strategy, but not enough on execution • Social media comms was good, but overresourced Rival 3 • Seemed a bit all over the place in Round 1 • Not very clear on what their response to product launch was • Market liked the discounting plan • Also liked the comparison to other flawed products • Provocative sales force increase & loyalty program The Intelligence Collaborative #IntelCollab Powered by
  14. 14. After Action Sample: Key Issues and Outcomes The issues highlighted below were derived from the Simulation. Key Issue Competitor Will… Our Response Defend lack of customer service data Competitors message this issue to mitigate launch • We will set up feedback loop for representatives and customer account team to gauge impact of lack of time-series data at launch; share best practices on how to handle • Develop rep response indicating that several other recent product launches did not have time-series data at launch Messaging • Tout their longevity in the product class. • Claim our product is “too radical,” untested, barely passing regulatory review • • • • Competitor Increase in Ad Spend We expect that the incumbents will increase their spend in an effort to lock up key institutional clients • Leverage consumer demand for new retirement options • Maximize the impact of the news event around the availability of a new class of product Feet on the Ground and Selling We expect at approval that there may be some financial options data that we won’t be permissible in promotion. • Right-size the new prods team to a competitive size • Via the Blue Guide can we share product data that is still under review • Ability to communicate regularly with speakers via intel network wiki on relevant product data The Intelligence Collaborative #IntelCollab 5 successful beta clients Rivals products have had negative returns for 5 years cumulative Educate on what is required and how to manage Can utilize heavier social media communication, particularly via our large FaceBook and Twitter presence Powered by
  15. 15. Related Techniques Scenario Analysis Competitor Analysis Blindspot Analysis Johari Windows Financial Ratio / Statement Analysis STEEP and Industry Analysis Executive Profiling / Shadowing Value Chain Analysis Supply Chain Analysis SWOT Analysis The Intelligence Collaborative #IntelCollab Powered by
  16. 16. Additional Advice 1. Beware of mission creep as it relates to the scope of the game 2. Resist the temptation to include outsiders as Participants 3. Seize the initiative post-game 4. Further develop the relationships you made during the pre-game work, and the war game itself. The Intelligence Collaborative #IntelCollab Powered by
  17. 17. Questions, Comments… 800.924.4249 A Trusted Advisor Since 1995 Arik Johnson Founder / Chairman +1.608.630.4242 Tim Smith Director of Competitive Simulations +1.714.222.4955 The Intelligence Collaborative #IntelCollab Powered by 17