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requirement of the deal was an end to the Qualiflyer brand name, they said, so be it.Swissair never did join one of the major alliances. Within two years, the Qualiflyer Group was history; a year later, so was Swissair, which went bankrupt. A new national airline, Swiss International Air Lines—SWISS for short—was formed out of the wreckage. It has been a member of the Star Alliance since 2006. This adds some emphasis to what were the real lessons of our Swissair wargame.
THE BIG IDEA Strategic plans, particularly in global in-dustries, must take special account of the largest players in the field. Their competitive advantages are not absolute, but they may be large enough to frustrate or even crush the plans of smaller fry.
Of the many takeaways in our Swissair game, three stood out:
• Strengthened international alliances and perhaps even transna-tional mergers in the airline industry were coming in an age of deregulation and price pressure. It would be important for smaller players to emphasize their strong suits and sign up with one of the major alliances sooner rather than later.
• It would be difficult to counter those alliances unless a competi-tor had what amounted to a unique selling proposition. In other words, not everyone can be a Southwest Airlines.
• If the game outcome is at serious odds with your corporate strat-egy, it’s worth examining the game’s play in even greater detail than you otherwise would. The fact that the home team often loses in business wargames is not a signal that the strategy is wrong. As we say early and often, our games must be plausible, not predictive. But just because we call it a game does not mean
T H E G O O D , T H E B A D , A N D T H E U G L Y
123its outcomes are capricious. Sometimes they tell a very disturb-ing story.
In the post-9/11 era, as we already have learned, asymmetric—
or irregular—warfare has become a much-studied field in Ameri-can war colleges and regional commands. It also has occupied more and more of our wargamers’ time and creative talents as one of our clients, the U.S. Department of Defense, tests the most pro-ductive ways to counter a new range of threats against the United States and its allies around the world.
Every so often, we find ourselves engaged in building a business wargame that in the playing seems to resemble asymmetric conflict.
Consider the European insurance executive who had been work-ing with one of our firm’s commercial partners about a prospective new service he had in mind. He headed a new business unit at his company and was having trouble convincing his masters at corpo-rate that his inspiration, fully realized throughout the Continent, would be a huge financial success. Our partner suggested that per-haps a wargamed simulation of the issue would prove convincing, although he also cautioned his client that there are no guarantees and that wargames sometimes reveal truths that their sponsors find difficult to swallow. The client said he understood and wanted to proceed.
His brainstorm sounded intriguing at first blush. Incomes in Europe were growing, and the prosperous cohorts at the top had no trouble securing good financial advisers to handle their invest-ments. Those at the bottom—that is, people who tended to live from paycheck to paycheck—sadly had no need for guidance on buying stocks and bonds and other investments. But what about the huge group in the middle? What about people with modest dis-cretionary income that was not being put to work? Even in the wel-fare states of Western Europe, where pensions were lucrative, an additional investment in retirement could produce a fat nest egg if handled wisely over time. Why not tap that market?
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What this executive wanted to dowas establish a chain of offices amid the retail stores that line streets throughout cities in Western Europe. Those store-front offices would be staffed by finan-cial consultants who would provide advice on the purchase of relatively safe securities; they also would execute trans-actions that customers wanted to make on the basis of the guidance they were getting. People could stop in on their way to work in the morning, during lunch, or on the way home at the end of the day. The executive envisioned a kind of one-stop shopping for financial management—stocks, bonds, and per-haps insurance too: Come in, spend 15 or 20 minutes chatting with a counselor and making adjustments to your port-folio, and then off you go. Insurers were prohibited from offering commercial banking services, but the executive did not see that as a problem. People could have their checking accounts at banks;
what he wanted was a shot at the money they otherwise might keep in simple savings accounts.
In our discussions with this executive and his top people, the objective of the game was abundantly clear. In effect, they wanted to stress test the product launch. How could their value proposition be refined and made even more attractive? How would competitors respond? What are we missing? How many stores do we need, and in what cities? And how are we going to communicate this to our constituencies: potential customers, of course, but also inside our parent company? The company was huge, the executive’s business group was small, and he anticipated further resistance even though his concept was innovative and a likely gold mine.
We constructed the game with the home team, our client, and