Imagine asking a room of Audi managers to spend tomorrow working for BMW, Mercedes or Tesla. Give them the competitor's research, its product material and perhaps even a branded T-shirt. Then ask them to win. According to Professor Jan Oliver Schwarz, enthusiasm is rarely the problem. Managers can become remarkably competitive once they have permission to challenge their own employer from the other side of the table.
That is the appeal of business war gaming. In this episode of Innovation Rockstars, Schwarz, professor of strategic foresight and trend analysis and head of the Bavarian Foresight Institute, explains how a carefully researched simulation can expose weaknesses in a strategy. The value comes from watching decisions collide: a product launch meets a competitor's response, an established advantage encounters a new entrant, and a familiar market starts behaving differently.
Schwarz became interested in foresight during an internship at Deutsche Bank more than two decades before this conversation. A department was experimenting with strategic early warning systems. The idea that an organization could understand change early enough to respond stayed with him. So did the difficulty: leaders make decisions about the future every day, yet cannot put that future on the table and inspect it.
A business war game gives them something they can inspect together. Participants represent different companies in a changing market. They work through successive rounds, propose strategies and receive feedback. As the simulation moves further into the future, earlier choices meet new conditions.
Schwarz uses the automotive industry as an illustration, rather than describing a particular Audi engagement. One team might represent the host company, others its established rivals or a software provider. Another team represents customers. That last perspective matters. A technically impressive offering still has to persuade the people expected to buy it.
For an R&D team, the exercise offers a way to examine the market assumptions behind a development plan. What happens to the product's advantage if a competitor improves faster than expected? Which customer need still supports the investment? These are questions to explore through the simulation, rather than conclusions it can supply in advance.
The workshop typically takes a day. Preparation starts earlier, with research into trends, scenarios and competitors. Schwarz describes a game book that gives participants a common analytical foundation for the company they will represent.
Financial information and product portfolios only go so far. Culture, decision-making and capabilities also shape what an organization might do. Private companies can be particularly difficult to research because less information is publicly available. People who have worked for a competitor may help participants understand its perspective, while marketing material and videos convey its tone.
Schwarz finds that assembling this material already creates value. Competitive intelligence often exists in scattered pockets across an organization. Putting it into a structured comparison makes that knowledge usable by more people, even before the game begins.
There are boundaries, too. A team playing Tesla cannot simply declare that diesel vehicles have been banned and claim victory. A control team manages external events and keeps the exercise plausible. Participants need room to stretch their thinking without granting themselves convenient changes to the world.
Schwarz likes participants to meet in their assigned groups the evening before the workshop when possible. It gives them time to leave their usual role behind. By morning, the change in perspective has had a chance to settle.
Then the competitive instinct takes over.
“It doesn't matter if they're competing against their own company or not. They want to be on the winning team.”
Winning can mean different things, depending on the exercise: gaining market share, developing a stronger innovation or performing well despite a difficult starting position. Schwarz sees that ambition as a source of energy. The learning happens when participants bring their experiences back together afterward.
Some of the most revealing moments concern the competitor nobody was particularly worried about. Schwarz recalls participants realizing that the rival they had watched most closely was manageable. A different competitor, or an entirely new type of player, could hurt them far more. That realization changes what deserves attention after the workshop.
An exercise cannot challenge the strategy if participants are expected to defend it throughout. Schwarz argues that even the team representing the host company needs freedom to take a different direction from the existing plan.
The same openness has to extend across functions and levels of seniority. If some people cannot be heard, the organization loses perspectives it brought into the room to discover. Executive sponsorship helps attendance, but leadership's willingness to learn determines what participants can actually question.
For a first exercise, Schwarz recommends making the scope tangible. A business unit or market segment can produce more concrete discussion than an attempt to simulate the whole corporate strategy. The choice should follow the decision leaders need to make.
AI may eventually assist with competitor research or simulated perspectives. At the time of the interview, Schwarz had not used it in a war game himself; the possibilities discussed with host Christian Mühlroth were exploratory. The harder leadership question already exists without it: when the room discovers that your preferred strategy struggles, are you willing to do something with that finding?