What Is Business War Gaming?

What is Business War Gaming?

Business war gaming is an experiential group exercise where an organization can pressure test an existing strategy or create new strategies and ideas via role-playing the competitors’ strategy and mindset before making full-scale investments. War gaming is about shaking things up, challenging norms, and taking a fresh look at the market from the lens of other key players.

It’s helpful to point out how much we already instinctively know about what war gaming is. Have you ever observed a youth team sports practice — from football and basketball to soccer and volleyball? If so, you already know that the pinnacle of many practices is a scrimmage, when the overall team is split into two opposing sides to compete against each other.

Interestingly, smaller-scale corporate war games are also frequently referred to as scrimmages — often designed to take under a day to execute and focused primarily on one competitor or a specific business issue or scenario.

So to define business war gaming, consider what the average youth soccer scrimmage aims to accomplish. While the scrimmage is going on, team members who are normally on the same side are suddenly playing against each other as if they are the competitor, running plays and behaving as they would — sharpening both their offensive and defensive skills in the process. This setup results in a form of practical role-playing where players’ skills are tested and developed with the goal of honing them even further for game day.

How Does Business War Gaming Work?

Professionally led war gaming exercises from Proactive Worldwide typically involve a pre-game planning stage, the development of briefing books and finally, the war gaming workshop. With this comprehensive approach, nothing is left to chance. The pre-game planning helps to define the who, what, when and where of the upcoming workshop. Once the details of the war game objectives are mapped out, who will take part, what strategies will be tested, when the workshop will take place and where it will actually occur have been agreed upon, it’s time to develop a briefing book.

A briefing book is usually compiled of 20 pages or less and serves to prepare the participants for the workshop. The brevity of the book is intentional so that people actually read it in advance. It contains a baseline of information so that participants that will represent that company are equally up to date on both the market landscape and understand the mindset, characteristics, and culture of the company they will role play.

Subsequently, a full-scale war gaming exercise will commence with a home team and two or three competitor teams. In general, each team is comprised of five to eight cross-functional members. It’s essential to remember that not every competitor team needs to strictly be an adversarial company. One of the other teams role played may also be a regulatory body, a distributor or even a consumer group focused on customer experiences. Depending on the desired outcomes, this may be a one- or two-day event.

For a more detailed description of what war gaming is, which exercises are involved and what resources it requires, you’re invited to listen to David Kalinowski, Proactive Worldwide’s President and war gaming authority, describe the process in his own words in the following podcasts:

What Are the Benefits of War Gaming?

Business war gaming is an engaging, exciting, and energetic experience. Unlike any affirmatory exercise, war gaming is strategically set up to provide helpful insights for actionable strategic decision-making. With a skilled facilitator, at the end of a workshop you’ll be left with a number prioritized actions to help you win.

War gaming helps align an organization’s leadership, aid in strategic (and in some cases tactical) decision-making, better evaluate its alternative strategies and recognize its hidden opportunities to seize and real threats to blunt. To learn more about the enterprise-wide benefits of war gaming for your business, contact us today.

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5 Hot Trends

2018 Trends

We’re well into 2018, and despite a few bumps in the road, the year is shaping up to be a good one for business. Expectations of fewer regulations, a brighter tax picture, and high consumer expectations all point to healthy growth. But, as always, we need to keep abreast of what’s trending to be sure we’re keeping up. Here are five key areas that will loom large in the foreseeable future:

  • Artificial Intelligence
  • Personalized Social Media Experiences
  • Blockchain
  • Evolving Workplace for Women
  • The CEO as Statesman

Artificial Intelligence

Artificial Intelligence is certainly not new, but it’s gaining greater prominence in the methods that we use to conduct business. In a recent PwC study, 72% of corporate leaders consider AI to be an aid to their enterprises. In what areas do they use it? Mostly to help with boring but essential tasks like preparing time sheets, scheduling, and paper work in general. Though relying on AI may seem to go against the trend toward personalization, it actually doesn’t. Using AI for menial tasks frees up time to devote to personalization in the areas that count with customers: delivery of what they want from your products or services.

Personalized Interactive Experiences

Social media isn’t a Johnny-Come-Lately either, but its influence is light-years ahead of what it was only a few years ago, and this influence is worldwide. One estimate by Statista suggests that by 2020, nearly one-third of the world’s population – 2.9 billion people – will be social media users. And why not? It’s the modern way people communicate with each other around the globe.

There are a myriad of ways to use social media to attract customers, e.g., a toy manufacturer could ask what to name a new doll or a brewery a new beer. Maybe people would like to weigh in on features they’d like to see on warm jackets: is it buttons or a zipper? How about a hood? The possibilities are endless regardless of what you sell or the services you offer.

Blockchain

Blockchain has become a hot topic around the world in 2018. It’s probably best known as the technology that gave us Bitcoin, which enabled online payments to be transferred directly without the use of an intermediary, such as a bank. Today a blockchain has many other uses. Think of it as a type of distributed ledger that constantly updates its own digital records. Once a transaction has been validated, it is then time-stamped and added to the blockchain in linear, chronological order. New blocks are linked to older ones, hence the name “blockchain.” Each blockchain automatically updates, so every ledger in the network, i.e., your company, always has a real-time record of transactions. Think of the simplicity, not to mention the time saved. Plus, blockchains are virtually hack-proof because the hackers would have to go through the entire history of the blockchain to pull it off. And they’d have to do it on every individual ledger in the company.

Evolving Workplace for Women

Though women have been in the workplace since there was a workplace, until the beginning of the women’s movement, they were often relegated to low-level, poorly paying jobs that were considered “suitable” for females. Today, however, there are precious few jobs from which women are excluded, and barriers to those are falling fast. The “glass ceiling” has many holes in it. Expect this trend to continue. Availability of in-the-workplace child care and options for work-from-home add to the options available for women who desire careers today.

Plus, role models abound: around the world, there are women heads of state (we nearly had one in the U.S.), many CEOs and other corporate executives, women who are high-ranking military officers, women in space, women on the Supreme Court, women mayors, women governors of states, and so on. An unprecedented number of women are expected to run for Congress in the next election as well.

Women often control the purse strings in a family too. So companies that have products to sell ignore that fact at their peril.

One other factor to consider: the #MeToo movement has caused an enormous shift in what constitutes acceptable workplace behavior. This is likely to continue, especially as women become more influential in setting policy.

The CEO as Statesman/Stateswoman

Once upon a time, the CEO was all about business, but no more. Increasingly, CEOs are addressing social issues. What’s driving the trend? For one thing, millennials are now in the workplace, and they tend to be socially conscious. For another, government seems strangely ineffective in tackling societal problems. Add to that the need to build public trust in business. So one can expect to see more CEOs stepping up to the plate this year. The labor market is tight, so to attract the best talent, CEOs need to show that they’re doing good, not just doing well.

Proactive Worldwide

Proactive Worldwide has its proverbial finger on the pulse of the trends listed above. So if you have neither the time nor the inclination to deal with their implications, we have experts who can help. It’s what we do.

Digital Strategy Gets Personal in 2018

Digital Strategy

In today’s marketplace, what sets the winners apart from the also-rans? Virtually all of them have developed top-notch, user-friendly digital strategies. If you have clear digital channels, you will make buying choices easier for your customers, which in turn, will result in increased sales.

Time, time, time. In this revved-up world we live in, people never seem to have enough of it, and they value clarity and efficiency when they’re looking for something they want to buy. Whether it’s a product or a service, they expect they will quickly find what they’re looking for. Otherwise, they will look elsewhere. You don’t want that to happen with your wares.

Digital technology entered the business world more than 20 years ago, but enterprises still wrestle with making the best use of it. Not to try, however, is fool hardy. According to an article in the Harvard Business Review, on average, digital competition has wiped away half the annual revenue growth and one third of the growth in earnings from companies that have failed to embrace current digital strategies. The article goes on to say that the average return on a company’s current digital investments is below 10%. However, here’s the flip side: the top performing 10% of companies achieves revenue growth 8% higher than the industry average and a digital ROI 10 times higher than that of the bottom 10%. Obviously, the top 10% are doing something right, and the bottom 10% need help.

So, what’s trending in digital 2018?

You need to be up-close- and-personal in this revved up digital age. Having big names tout your products doesn’t work as well as it used to. You should be where your customers are. Here are a few ways to get there:

  • Develop grassroots promotions that leverage the power and cost-efficiency of social media to spread your message.
  • Use advanced targeting techniques to better connect with your customers. Examples include behavioral targeting that relies on customers’ interests found in browser data, geo-targeting that targets customers (often via mobile device) in a specific location, and contextual targeting that places digital ads based on site content.
  • Make use of professional live video to enhance customer engagement and solicit instant feedback about your products and services.
  • Use social media to track your customers’ interests, buying propensities, and brand sentiment.
  • Take a second look at your digital distribution channels. The digital world is evolving at lightning speed so be sure you’re making the most of your digital channels. These include your owned media (your websites, your blog, your social media properties), paid media (Google AdWords, display ads, paid content posts), and earned media (online visibility and publicity you’ve earned through shares, reviews, mentions, etc.).

The key is to know where your customers are through every step of their purchasing journey. Some of the procedures above require expertise that you may not have. Besides you have a business to run, but here’s where Proactive Worldwide can help. Whether you’re a long-standing business or a new enterprise, PWW offers several beneficial services that will put you on the right footing. If you want to increase your sales, we suggest opting for our Digital Strategy Service, which is part of our Customer Insight Program. You’ll learn how you can jump start improvements to your digital strategy.

Or you may want to realign or build a new digital footprint. Our Digital Strategy Service would also be the choice for that. The Digital Strategy Service focusses specifically on how well your online digital channel components are working for your customers. In addition, we suggest improvements that will make your customers’ digital experiences more gratifying. To determine where you currently rank on the digital-maturity spectrum, we’ll first evaluate your existing digital program. We’ll then work collaboratively with you to develop goals and appropriate solutions to build or realign your digital footprint no matter what devices your customers are using to access your site.

Proactive Worldwide has assisted many organizations including Fortune 500 companies to realign and reinvest in their digital footprints and we’d be honored to do the same for you.

Creating a Value-Driven Project Intake Process

“Get me whatever you can.” We’ve all heard these five words. But beware: They are certain to set up a project for failure. Even though stakeholders love to give this direction…they don’t really mean it! A project can’t be completed successfully if its scope is not well organized, and if there is no clear alignment on expected outcomes. Based on my more than 25 years of research and consulting project experience, scope is the most important preliminary aspect of project management; it’s critical to make it clear the first time around, because it’s difficult to adjust later on.

Yet the project intake process continues to be a challenge for many practitioners. In today’s environment of “everything is urgent AND important,” it is more vital than ever that your stakeholders understand what results actually can be delivered, when, at what quality level, and at what cost. On March 7th as part of the Society of Insurance Research’s 2017 educational conference, “Research Skills Development for Tomorrow’s Leaders,” at the University Club of Chicago, I shared some best practices for the project scoping process as it applies to competitive intelligence and market research studies.

All living organisms have a life cycle…a project is no different. After discussing the typical project life cycle (Infancy, Adolescent, Mature, Old Age) and the respective management style a project leader needs to demonstrate with each phase of the cycle (Champion, Coach, Counselor, Manager), I outlined a 6-step process for diagnosing requests:

  1. Determine Needs and Project Goals – Engage in dialogue with the stakeholder to gain clarity on the business problem to solve, obtain context on what you to seek to achieve, avoid generalizations, and focus only on areas that will provide value…those that truly impact key decisions
  2. Define Deliverables – Gain alignment on the project requirements, know what you will produce (format, analytical tools, outcomes), adjust deliverables including timeline and budget when “scope creep” emerges (and it will!), schedule kick-off calls and update your stakeholder on progress, and whenever possible, present your final results…don’t just email a final report
  3. Identify and Allocate Resources – Assess the hours it will take to complete the various tasks of an engagement, determine what unique skills or experiences are required, determine if the people you need can be sourced internally or externally, and carefully assemble the right delivery squad…don’t overlook the importance of team composition
  4. Establish Budget – Create a budget using a top-down (here’s the budget to work with, now distribute it) or bottom-up approach (estimate hours/cost by task to reach a total necessary budget to meet project specifications), include a “buffer” or reserve to cover unexpected risk, track actual versus budget, and rely on past experience…this will help you to know if budget is realistic
  5. Create a Realistic Timeline – Begin with the end in mind (Stephen Covey), identify all activities and tasks to produce desired results, know which tasks are dependent on others, estimate length to complete the tasks, develop a schedule, and discuss the timeline with the stakeholder…set clear expectations
  6. Gain Approval – Identify the signatory, ask for what you need, prepare for push-back, and obtain written authorization (signed SOW, MSA, PO), especially if collaborating with an external solution provider…protect yourself and your company

Applying this valued, best-practice approach to the project intake process will help ensure that you control the project – so it doesn’t end up controlling you! If you would like a copy of the key presentation slides, please email davidk@proactiveworldwide.com.

Author:
David J. Kalinowski, President
Proactive Worldwide, Inc.
www.proactiveworldwide.com

Competitive Simulation Uncovers Crucial Blind Spot

Proactive’s War Game offering increases the probability of success in the face of market and competitive uncertainties, because your team has already considered them and is better prepared to act.

Case in Point: A client in the nutrition space faced a significant decision on non-GMO food – should they make a significant investment in marketing, reformulation, and modifying production equipment, or “wait and see”?

Read Case Study

Technology Disrupts and Innovates the Insurance Market

There were several valuable presentations on day one of the Society of Insurance Research (SIR) conference in Scottsdale, Arizona. Keynote speaker Bill Harnett of Harnett Advisors discussed how every business is now subject to technology disruptions, Moore’s Law and the exponential change it brings.

Bill asserted that “every industry is becoming a tech company,” and over time he will be right. Currently, he explains, there are three ways in which most insurance companies manage risk:

1) Eliminate it
2) Transfer it
3) Insure it

What are technology disruptions?
With technology disruptions, such as driverless cars, there will eventually be less risk to insure, and this wouldn’t just be limited to cars. Driverless buses and trucks are in development. This is projected to result in fewer accidents and less deaths, and services such as telematics may become obsolete as vehicle sensors make autonomous vehicles (AV) driving safer and more efficient. AV will free up 50-minutes a day to drivers, parking garages and parking space requirements will be massively reduced, and vehicle crashes are expected to fall by 90%. Think about the impact that has on companies that insure these things.

While some experts estimate that it will be 2050 before AV will be the primary mode of transportation, Bill believes that by 2020 you will start to see more autonomous vehicles on the road as companies like Ford have committed to producing a series of autonomous cars by then. Even Uber has plans to ultimately have no drivers.

Technology such as 3D printing will also impact the insurance market. There is virtually no limit to what can be constructed via 3D printing. There is new technology connected to very large 3D printers that are able to build a 3D printed home, and in China this has already been put into practice. This kind of technology will certainly impact on the property and casualty insurance market.

Bill also made the point that not only has technology be taking over blue-collar jobs, but it is coming after white-collar jobs. With technology like IBM’s Watson, that can read thousands of documents in seconds, faster than any human can read, this technology is able to quickly find correlations across different types of content that humans don’t have the capacity to do. For instance, be able to examine different treatments for various kinds of cancer to identify new treatments. It’s estimated that by 2023 that computers like Watson will be able to think just as the human brain, and by 2050 that these computers will have to power to assimilate data equal to all the brains on the planet.

So, be prepared for technology to both disrupt and innovate every industry. The future capability of technology is exciting, but also a little scary, and industries that have been major money-makers in the past may not exist at all, or will exist in a very different capacity, in the future.

Top 10 Intelligence Capabilities Issues

Over the past several years we have been collecting information and data points from interviews we held with top executives from dozens of companies. We found out that the top intelligence capability issues that are cited from business leadership as impediments to a highly valued intelligence function are universally consistent across industries and firms. Check out the top 10:

  1. Deliverables lack actionable business insight and recommendations.
  2. Tactical/transactional work consumes too much time.
  3. Intelligence team talent lacks business/market understanding or analytical skills.
  4. The corporate function ignores BU/Regional issues.
  5. Deliverables are not clearly designed nor enable business priorities and strategies.
  6. Information is delivered or data is dumped – analysis burden is left to the recipient.
  7. There are inconsistencies in local capabilities/understanding and the ability to execute.
  8. Competing priorities inhibit any real, valued outcomes – BU, Regional, Local.
  9. Routine reporting lacks insight (newsletter tend to diminish brand value).
  10. Resource constraints from leadership, talent, budget, meeting/process integration, technology.

A CI capability starting with a rock solid CI strategy that aligns with core executive leadership, has a business cadence and corporate governance, as well as contains proper CI purpose, vision, mission and values statements seems to set the intelligence pace to head off at the pass many of the above CI capabilities issues.

Walmart’s Acquisition of Jet.com: What Does It Mean for CPGs?

Walmart, the world’s largest brick-and-mortar retailer, recently purchased e-commerce site Jet.com for $3.3 billion. The deal expands Walmart’s online presence and marks the largest e-commerce acquisition in U.S. history.

Both Walmart and Jet have struggled to compete with Amazon, even as retailers’ online sales continue to grow exponentially. By acquiring Jet, Walmart gains access to the young company’s customer base, sleek portal and sophisticated pricing algorithms. The move is just one of Walmart’s initiatives aimed at boosting its e-commerce sales.

The trend
So why should this acquisition matter to consumer packaged goods (CPG) companies? Simply put, because it’s an inflection point. It’s noteworthy when the world’s largest retailer invests billions in a new online platform while also closing hundreds of physical stores.

In 2013, online purchases accounted for just 1% of CPGs’ total sales for packaged foods and 3% for non-food items. Future estimates skyrocket: online sales are estimated to comprise up to 30% of total CPG sales growth in the next five years, as millennials and mobile devices continue to fuel e-commerce sales.

CPGs must take note and proactively get ahead of this trend.

The warning
As the shift to online purchasing accelerates, now is the time to act. History shows that companies that fail to recognize and adapt to new trends lose out big to their nimbler competitors.

Consider Microsoft’s late arrival to the mobile space. Apple launched the iPhone in 2007; Google launched its Android handset in 2008. Five years later Microsoft finally joined the mobile revolution by purchasing Nokia for $7.2 billion. Investors roundly – and rightly – criticized the move as being too late. Unable to gain market share, Microsoft cut over 30,000 employees from its mobile teams over the ensuing years, effectively shuttering the division. The company’s failed attempt to catch up cost billions of dollars outright and likely billions more in missed opportunities.

While CPGs operate in a different industry, the warning is the same. Failing to quickly recognize and capitalize on changing trends can have devastating consequences.

What now?
Successful CPGs recognize the evolving landscape and are leveraging direct-to-consumer e-commerce channels. With Jet no longer a standalone alternative to Walmart and Amazon (and their draconian pricing agreements), here are six key questions for CPGs to ask:

1. What is Walmart’s next move with its changing e-commerce platform?
2. Should we deepen our partnerships with Amazon and Walmart to expand our online reach, with smaller profit margins as the trade-off?
3. Or should we double-down on partnerships with smaller retailers, where pricing is more favorable?
4. Which CPG company will make the next e-commerce move? What will it look like?
5. How will we sell directly to consumers online – through a homegrown sales platform or through a third-party portal?
6. How will we attract more millennials to our products and online portal?

As you ponder these questions and refine your e-commerce strategy, consider the following recommendations to boost online success:

1. Build strong account management teams for top online partners.
Industry-leading CPGs are four times more likely to create dedicated account management teams for their top online partners. So look to establish account teams in the cities where your key partners are based. This lets you strengthen relationships, respond quickly and coordinate strategic planning.

2. Create next-generation e-category management.
Top CPGs are revisiting how they manage online categories, with a keen focus on product assortment, pricing strategies and online marketing.

To deepen relationships, consider offering exclusive items only available via a partner’s website. For better promotion, press online partners to add your products to “favorites” lists, bundled deals and personalized landing pages influenced by the customer’s unique search and purchase histories. Also consider multi-channel marketing campaigns that include social media monitoring to glean insights about consumers’ preferences.

3. Establish a high digital quotient (DQ).
Fostering a high digital quotient takes effort and planning. Over 90% of online leaders fully integrate digital initiatives into their business strategy, and for good reason: companies with high DQ scores averaged a 42% total return to shareholders over the past five years, versus 16% for low-DQ companies.

If you haven’t done so already, ensure that your digital teams have the necessary budget, staffing and executive support to achieve your e-commerce strategy. Also emulate top tech companies by fostering a culture of thinking big, moving fast and being fearless when it comes to new ideas.

As the e-commerce space grows even more competitive, CPG companies cannot afford to be behind the curve. Gathering solid competitive intelligence can help you understand the landscape, find effective online sales channels and maximize your long-term success. In sum, these proactive efforts can help you get – and stay – Out in Front® of your competition.

REFERENCES

Alldredge, Kari; Newaskar, Puneet; Ungerman, Kelly (2015). The Digital Future of Consumer Packaged Goods Companies. McKinsey & Company.
http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-digital-future-of-consumer-packaged-goods-companies

King, Hope (2016). Microsoft’s Costly Bet on Nokia Will Mean More Job Losses Than Previously Expected. CNN Money.
http://money.cnn.com/2016/07/29/technology/microsoft-layoffs-july-jobs/

Peterson, Hayley (2016). See if Your Local Walmart is Shutting Down. Business Insider.
http://www.businessinsider.com/list-of-walmart-stores-closing-2016-1

Walmart.com (2016). Walmart Agrees to Acquire Jet.com, One of the Fastest Growing e-Commerce Companies in the U.S.
http://news.walmart.com/2016/08/08/walmart-agrees-to-acquire-jetcom-one-of-the-fastest-growing-e-commerce-companies-in-the-us

Managing Expectation Series: 5 Tips to Improve Client Understanding (Tip #5)

It’s our final post of the series! If you haven’t already, be sure to read our first, second, third and fourth posts post in the series for more tips.

Tip #5: PROFILE KEY CLIENTS TO ADAPT TO THEIR COMMUNICATION STYLES

It’s important to get to know your clients, particularly their communication styles. There are four basic styles: analytical, driver, amiable, and expressive. Use the table to profile your clients’ primary and secondary styles of communicating – and profile yourself. This will go a long way toward being able to better manage client expectations and promote good communication. It will also allow you to flex your own style and method to make the client feel comfortable and help both of you foster a deeper, mutually beneficial relationship.

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If you have any feedback on this series, be sure to leave us a comment or send us an email. And, don’t hesitate to reach out if we can be of any assistance to you or your business!