Four key elements are developed during formal meetings:
Defining the strategic issue: What is the decision to be made.
What are the best, expected and worst outcomes?
Determining the Relevant players (Players): Which players’
actions have the greatest impact on success? – It is not
always competitors. The media, suppliers, distributors, regulators,
governments, etc. may also be relevant. What is the driving
objective of each player?
Identifing the actions each player can take (Options): A list
of potential actions from the perspective of each player. It’s
quite possible competitors will have different options.
Determining the preferred set of actions for each player
(Preference Trees): Competitive role-playing is the best method
to get inside the heads of the other players to determine
how they would like to see the game unfold using the full
range of actions from all the players. It may be that what
a player wants most is action by another player.
Detailed mathematical analysis then drives the development
of a high level strategic plan through exploration of all
possible issue outcomes. Insights are generated into players’
power or ability to influence the issue, intermediate or tactical
steps, and the opportunity to anticipate and test different
player's reactions. The issue model can be used for creation
of negotiation positions, "what-if" analysis, scenario
planning, and outcome optimization.
Using this approach, executive input is measured in hours
and turnaround measured in days.
Experience has shown that the most effective approach is to
model an issue early using known information. Sensitivity
analysis often reveals the “value of Information”
and can be used to determine where more data intelligence
is required.
Learning from the game:
While we argue that real-world business issues are increasingly
complex, a surprising number of multi-player strategy problems
can be modeled as relatively simple games. Competitive pricing,
new market entry, bidding, contract design problems are particularly
common.
Applications need not identify unique, robust equilibrium
solutions to be valuable. The process forces participants
to think about the incentives, options and preferences of
other players through qualitative role-playing and structured
discussions. It can generate strategic insights even when
the game can’t be modeled explicitly.
Invariably, insights about how to change the game to drive
a more favorable outcome are developed. In some cases, there
will not be a favorable outcome. This in itself is worth knowing
so that resources can be directed elsewhere.
Post audits reveal excellent agreement between predicted and
actual outcomes together with synthesis of successful, yet
sometimes counter-intuitive, strategies. Executive teams find
this approach extremely time efficient and cost effective.
It also achieves a great degree of alignment among leadership
toward an organization’s strategy.
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2002 CCS Incite Inc.