The Anatomy of a Wargame: Roles, Rules, and Execution

In the previous chapters of this series, we explored the history of wargaming and distinguished it from its cousin, scenario planning. We have established why organizations must stress-test their strategies and when to deploy this powerful methodology. Now, we arrive at the most critical juncture: the how.

To the uninitiated, a business wargame can appear chaotic. It involves a room full of executives, mounds of data, intense arguments, and rapid-fire decision-making. However, behind this apparent chaos lies a rigorous, architectural structure. A successful wargame is not a free-form role-playing exercise; it is a carefully engineered machine designed to process information, challenge assumptions, and output strategic clarity.

If a wargame feels chaotic to the participants, it is because the design is working. But if it feels chaotic to the organizers, the design has failed.

This article dissects the anatomy of a professionally developed business wargame. We will strip away the mystique to reveal the skeletal structure that holds it together: the specific human roles required, the rules of engagement that govern the simulation, and the precise execution flow that turns a workshop into a strategic weapon.

Part I: The Foundation – Design and Preparation

There is a golden rule in corporate wargaming: The success of the game is determined before the first player enters the room.

While the execution phase (the actual workshop) is the most visible part of the process, it represents only the tip of the iceberg—roughly 20% of the total effort. The remaining 80% is the design and preparation phase. This is where the "reality" of the simulation is constructed. If the foundation is weak—if the data is poor, the objectives unclear, or the scenarios implausible—the game will devolve into a debate about validity rather than a test of strategy.

The Design Document

Every wargame begins with a Design Document. This is the blueprint. It aligns the leadership team on exactly what problem they are trying to solve. A wargame designed to test a merger and acquisition defense requires a fundamentally different structure than one designed to test a new product launch.

The design phase must answer three existential questions:

1. The Objective: What specific decision are we trying to de-risk?

2. The Scope: What is the time horizon? (e.g., 3 month or 3 years). What is the geographic focus? (e.g., North American, EMEA or Global).

3. The Hypothesis: What are we assuming will happen, which we need to challenge?

The Data Book (The "Intel")

Once the design is set, the wargaming team must build the world. This involves compiling the "Data Book" or "Briefing Packs" for each team. This is not merely a collection of annual reports; it is a curated intelligence dossier.

For the simulation to work, players must feel immersed in the reality of the market. The Data Pack serves as the single source of truth for the game. If a player asks, "What is our market share in Q3?", the answer must be in the book. If it isn't, the game slows down.

A comprehensive Data Pack typically includes:

• The "State of the World" Brief: A summary of macroeconomic conditions, relevant regulations, and technological trends current to the start of the game.

• Competitor Profiles: Deep-dive psychological and financial profiles of the rival companies being simulated (The Red Teams), including their known strategic priorities and leadership styles.

• Customer Personas: Detailed data on customer segments, buying criteria, and pain points to arm the Green Team.

• Financial Constraints: A clear budget and resource pool for each team. Strategy is about making choices under scarcity; without financial constraints, teams will simply "do everything," rendering the simulation useless.

• The "Baseline" Strategy: For the Blue Team (your company), a clear articulation of the current plan that is being tested.

Part II: The Cast of Characters – Roles and Responsibilities

The engine of any wargame is its participants. However, you cannot simply throw a group of executives into a room and tell them to "compete." You must assign specific, adversarial roles that force them to view the world through a different lens.

The anatomy of a wargame consists of four distinct groups, often colour-coded for clarity: The Blue Team, The Red Team(s), The Green Team, and The Control Team (White Team).

1. The Blue Team: The Home Team

The Blue Team represents your own company. Their objective is to execute the current strategy, defend the market position, and achieve specific growth targets.

While this seems like the easiest role, it is often the most difficult. The Blue Team suffers from the "curse of knowledge" and internal politics. They are often defensive of their current plans because they are the ones who wrote them.

The responsibilities of the Blue Team include:

• Defending the Plan: They must attempt to execute the organization's strategic plan as written.

• Reacting to Disruption: When the Red Team attacks, the Blue Team must decide whether to stay the course or pivot.

• Managing Internal Friction: They must manage their limited budget and conflicting departmental priorities (e.g., Marketing wants to lower prices; Finance wants to raise margins).

  
  

Selection Criteria: The Blue Team should include the actual decision-makers who will be responsible for executing the strategy in the real world. This ensures that the "pain" felt during the simulation is internalized by the people who matter.

2. The Red Team: The Opposition

The Red Team represents the competition. In a complex wargame, there may be multiple Red Teams (Red Team A, Red Team B), each representing a different specific competitor.

The goal of the Red Team is not necessarily to "win" in the traditional sense, but to uncover the Blue Team's weaknesses. They are the stress-testers. To be effective, they must adopt the mindset, culture, and aggressive tendencies of the competitor they are portraying. They must liberate themselves from "how we do things here" and embrace "how they do things there."

The responsibilities of the Red Team include:

• Emulating Competitor Behavior: If the competitor is an irrational (from Blue Team's perspective), aggressive startup, the Red Team must act irrationally and aggressively. If the competitor is a conservative giant, they must act slowly and methodically.

• Exploiting Weaknesses: They must relentlessly attack the Blue Team’s blind spots, unburdened by politeness or internal politics.

• Disrupting the Market: They should look for asymmetric moves—actions that the Blue Team considers "unlikely" or "unfair."

Selection Criteria: The Red Team is best staffed by "mavericks"—employees who are creative, contrarian, and perhaps a bit cynical about the current company strategy. It is also highly effective to include external subject matter experts or former employees of the competitor to add realism.

3. The Green Team: The Market and Customers

As discussed in the previous article, the Green Team is a critical variable for market simulation. They represent the customers, the regulators, the partners, and the media.

The customer is a person in the room who has the power to say "No." The Green Team holds the scorecard. They decide who gets market share and who loses revenue based on the moves made by Blue and Red.

The responsibilities of the Green Team (if applicable) include:

• Adjudicating Value Propositions: When Blue launches a product and Red cuts prices, the Green Team decides what the customer actually buys.

• Simulating External Stakeholders: They also play the role of the regulator (approving or blocking mergers), the supplier (raising costs), the analyst (positive or negative ranking on solutions/products), and the media (generating bad PR).

• Providing Feedback: Crucially, they explain why they made their decision. "I didn't buy Blue's product because, even though it was better, Red's financing terms were safer for my budget."

Selection Criteria: This team should be staffed by actual customers, Sales and Account Management leaders (who know the customer best), Market Research analysts, and potentially external industry analysts.

4. The Control Team (White Team): The Referees

The Control Team does not play the game; they run the universe. They are the facilitators, the adjudicators, and the time-keepers.

The Control Team is responsible for the "physics" of the simulation. They determine the consequences of actions. If the Red Team says, "We are launching a moonshot product," the Control Team determines if that is technically feasible and how long it will take.

The responsibilities of the Control Team include:

• Rule Enforcement: Ensuring teams stay within their budgets and the laws of physics.

• Adjudication: analyzing the moves from all teams and calculating the results (e.g., "Blue Team lost 3% market share this round").

• Injecting Intelligence: Delivering "Newsflashes" to the teams—unexpected events like a supply chain crisis, a data breach, or a new law—to test resilience.

• Pacing: Keeping the energy high and ensuring the game finishes on time.

Selection Criteria: This role is usually held by senior management, strategy consultants or internal strategy officers who are neutral and experienced in facilitation.

Part III: The Rules of Engagement

A wargame is not a free-for-all. It requires a rigid structure to simulate the passage of time and the friction of the real world. These are the "Rules of Engagement."

1. The Concept of "Turns" and Time Jumps

Real strategy plays out over years; a wargame plays out over hours. To bridge this gap, the game is divided into "Turns" or "Rounds." Each turn typically represents a specific period of time—usually one year. For high growth companies and startups, given their business nature, they terms are adjusted to reflect the reality of the decision making. Typically counted based on quarters and up to 3 years depending on the Series and growth stage.

• Round 1: Represents Year 1 (The Short Term). Focus on immediate tactical moves and execution of current plans.

• Round 2: Represents Year 2 or 3 (The Medium Term). Focus on reaction, adjustment, and the consequences of Round 1 choices.

• Round 3: Represents Year 4 or 5 (The Long Term). Focus on the cumulative impact of strategy and long-term viability.

Between rounds, there is a "Time Jump." The Control Team fast-forwards the world. If Blue Team invested in a new factory in Round 1, the Control Team announces in Round 2 that the factory is now built and operational. This teaches participants about the lag time between decision and result.

2. The Move Cycle

Each round follows a strict "Move Cycle" to ensure organized interaction.

• Step A: Intelligence Review (15 mins): Teams review the results of the previous round and digest new "Newsflashes" from the Control Team.

• Step B: Deliberation and Planning (15-60 mins): Teams retreat to their breakout rooms. They debate their strategy, allocate their budget, and finalize their "Move."

• Step C: Submission: Teams submit their moves in writing to the Control Team. A "Move" consists of:

  • The Action: What are we doing? (e.g., Price cut).

  • The Investment: How much does it cost?

  • The Intended Outcome: What do we expect to happen?

  • The Message: What do we tell the press?

• Step D: Plenary/Presentation (15-30 mins): All teams return to the main room. They announce their public moves to the group. Secret moves are kept hidden by Control.

• Step E: Adjudication (Break): The Control and Green Teams analyze the interaction of all moves and determine the results.

3. Resource Constraints (The "Token" Economy)

To simulate reality, resources must be finite. In many wargames, this is handled via a token system or a simplified spreadsheet budget.

• Capital Tokens (CAPEX): Used for long-term investments like building plants, M&A, or R&D. These take time to yield results.

• Operating Tokens (OPEX): Used for short-term tactics like marketing campaigns, price subsidies, or hiring surges.

• Management Attention Tokens: This is a subtle but powerful mechanic. Teams are given limited "Attention Tokens." They may have the money to do ten things, but only the leadership bandwidth to manage three. This forces prioritization.

If a team runs out of tokens, they cannot act. This forces the difficult trade-offs that define real strategy.

Part IV: The Execution – A Day in the War Room

What does the actual execution of the wargame look like? While every game is unique, a standard strategic wargame typically spans one to two intensive days.

The atmosphere should be high-pressure. The clock is always ticking. The walls are covered in maps and data. The goal is to induce "cognitive stress"—a state where leaders must rely on experience, critical-thinking, rapid strategic decision-making and training rather than leisurely analysis.

The Morning: Setting the Stage and Opening Moves

The day begins with the "briefing." The Control Team sets the scene, describing the competitor, customer, regulatory, geopolitical and market context. The teams then break out into their separate "War Rooms."

Round 1 (The Current Trajectory):

The first round usually tests the status quo. The Blue Team implements their 202X strategic plan. The Red Teams implement their expected counter-strategies.

• The Dynamic: This round is often polite. Teams are testing the waters.

• The Adjudication Shock: The first adjudication is usually a wake-up call. The Control Team reveals that the Blue Team's plan didn't work as well as expected because the Red Team did something unexpected. This breaks the "optimism bias."

The Afternoon: Escalation and Crisis

As the game moves to Round 2 and 3, the Control Team turns up the heat.

Round 2 (Escalation):

Now the gloves come off. The Red Team, realizing they have nothing to lose, tries bold, disruptive moves (e.g., a radical pricing model or a hostile takeover attempt). The Blue Team is forced into "crisis management" mode.

• The Injection: The Control Team introduces a "Wildcard"—a major external shock. "Supplier/partner prices increased by 30%," or "A massive data breach has hit the industry."

• The Dynamic: The Blue Team often realizes their rigid annual plan is useless in the face of this new reality. They must improvise.

Round 3 (The Endgame):

The final round explores the long-term consequences. Who is still standing? Has the market commoditized?

• The Dynamic: Exhaustion sets in. Decisions become harder. The Green Team (Market) becomes pickier. This round reveals the sustainability of the strategies chosen in the morning.

The Adjudication Process: The Black Box vs. Transparency

One of the challenging aspects of execution is "Adjudication"—determining who won the round.

The Control Team and Green Team meet in a "closed door" session while the other teams are planning. They look at the colliding moves.

• Example: Blue spends $1M on ads. Red cuts price by 15%.

• Green Team Input: "The ads are nice, but in this economy, my customer segment cares about price. I'm shifting 5% share to Red."

The Control Team then enters the data into the game model (usually a complex Excel spreadsheet) to calculate the financial impact (Revenue, Margin, Stock Price).

Crucial Rule: The Control Team must be able to explain why a result happened. If Blue Team loses share, they need to know it was because of Red's price cut, not random chance. This feedback loop allows the teams to learn and adjust.

Part V: The Debrief – Harvesting the Strategy

The game is a data-generation engine. The output is the insight generated during the Debrief.

If you spend 8 hours playing the game and only 30 minutes debriefing, you have wasted your time. The Debrief is where the "Aha!" moments are captured and codified into real-world strategy.

The Hot Wash (Immediate)

This happens immediately after the final round. Emotions are still high. The goal here is to capture raw reactions before participants filter them through corporate politeness.

Key Questions for the Hot Wash:

• To the Blue Team: "At what point did you feel the most panic? What move by the Red Team surprised you the most?"

• To the Red Team: "Where did you see Blue's biggest vulnerability? If you were really the CEO of the competitor, what would you do to derail Blue tomorrow?"

• To the Green Team: "Why did you leave Blue? What could they have done to keep you?"

The "Red Team" and "Green Team" feedback is usually the most valuable data point of the entire exercise. Hearing your own colleagues explain—with gleeful precision—exactly how they dismantled your strategy is a humbling and illuminating experience.

The Cold Wash (Analysis and Report)

Days or weeks after the event, the Control Team synthesizes the notes, the game data, and the observations into a final Strategic Report.

This report typically categorizes insights into three buckets:

1. Blind Spots: Threats we simply didn't see coming (e.g., "We assumed the competitor couldn't lower prices, but the simulation showed they could if they sacrificed short-term margin").

2. Strategic Robustness: Which parts of our plan survived the war? (e.g., "Our brand loyalty held up even when we were undercut on price").

3. Early Warning Indicators: What signals should we look for in the real world? (e.g., "If the competitor hires a new CTO, it signals they are moving to the strategy they used in Round 2").

Part VI: Common Pitfalls in Wargaming

Even with a perfect structure, wargames can fail if the human element is mismanaged. Here are the most common points of failure and how to avoid them.

• The "Nice Guy" Syndrome:

  • The Problem: The Red Team is too polite. They don't want to upset their boss (who is on the Blue Team) or make the company look bad.

  • The Fix: Leadership must explicitly give the Red Team "permission to kill." The CEO should privately tell the Red Team leader: "If you don't beat us, you are failing."

• Fighting the Scenario, Not the Enemy:

  • The Problem: Teams spend their energy arguing with the Data Book. "This market data is wrong," or "The regulator wouldn't do that."

  • The Fix: The Control Team must be firm. "This is the reality of the simulation. Adapt to it." The game is a test of adaptability, not a test of data perfection.

• Analysis Paralysis:

  • The Problem: Teams want perfect data before making a move.

  • The Fix: Strict time limits. In the real world, you never have perfect information. Forcing a decision in 45 minutes replicates the fog of war.

• Ignoring the Green Team:

  • The Problem: Blue and Red focus entirely on destroying each other and forget about the customer.

  • The Fix: The Green Team must be vocal. If the combatants ignore the customer, the Green Team should announce, "While you two were fighting, a new entrant just took 10% of the market."

Conclusion: The Practice of Victory

The anatomy of a wargame is a study in structured conflict. It is a mechanism designed to break things—to break plans, to break assumptions, and to break the comfortable consensus that often settles over a boardroom.

By assigning adversarial roles, enforcing strict rules of scarcity and time, and simulating the ruthless adjudication of the market, a wargame provides something that no spreadsheet can: experience.

When a leadership team walks out of a well-executed wargame, they possess a memory of the future. They have already lived through the price war; they have already navigated the supply chain crisis; they have already lost customers to the new entrant. This "synthetic experience" inoculates them against panic.

When the real crisis inevitably arrives, they do not freeze. They recognize the pattern. They look at each other and say, "We've seen this before. We know what to do." That is the ultimate ROI of the anatomy of a wargame.