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This article summarizes the major insights collected in a retrospective comparative analysis
of eight strategic projects in which ‘policy gaming’ was the major methodology. Policy
gaming uses gaming-simulation to assist organizations in policy exploration, decision
making and strategic change. The process combines the rigor of systems analysis and
simulation techniques with the creativity of scenario building and the communicative
power of role-play and structured group techniques. Reality is simulated through the
interaction of role players using non-formal symbols as well as formal, computerized
sub-models where necessary. The technique allows a group of participants to engage
in collective action in a safe environment to create and analyse the futures they want
to explore. It enables the players to pre-test strategic initiatives in a realistic environment.
Gaming/simulation proves an appropriate process for dealing with the increasing
complexity of organizational environments and the problems of communication within
complex organizations and their networks.
Ó 2007 Elsevier Ltd. All rights reserved.
Introduction
Anyone who thinks play is nothing but play and dead earnest nothing but dead earnest hasn’t
orner)1
understood either one. (Dietrich D€
Over the last few decades, the formal strategy making approaches that once dominated the planning
departments of large firms have come under attack from reflective practitioners and management
scholars who have argued that rapidly changing environments require emerging and creative strate-
gies.2 From this criticism a number of alternative strategy-making models have been developed that
emphasize collective efforts and highlight the need for bottom-up processes in which managers
have more autonomy in strategy making. These approaches stimulate ‘market creation,’ ‘planned
0024-6301/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.lrp.2007.07.004
emergence,’ and ‘entrepreneurial opportunity formation’ in which softer roles and characteristics such
as coordination, communication, creativity and commitment are more important.3
Outside the mainstream of strategy literature, the discipline of gaming/simulation offers great
potential in this regard. Scholars from the gaming/simulation discipline have frequently reported
on the use of gaming in policy and strategic change projects in a large variety of organizations.4
In the leading professional and academic strategy journals, however, one finds little about successful
gaming applications. With this article we want to make clear to strategy practitioners and academics
how we have come to understand policy gaming as a unique and effective process for solving the
most difficult strategic issues an organization can face.
The actual game is only one - important and highly visible - step in the
collective process of inquiry and communication
We will argue that policy gaming derives its strategic functions from two central features of this
methodology:
The interactive and tailor-made modelling and design of the policy game. The actual run of the
policy game is only one - albeit important and highly visible - step in this collective process of
inquiry and communication. A policy game or exercise is a dedicated gaming/simulation con-
structed in collaboration with the members of an organization to help it in its strategy making
process.
Through the unique combination of simulation with role-playing, participants themselves actu-
ally create the future that they want to study, rather than it being produced for them as in pro-
jects where formal simulation models are used. At the same time, the future is more than an
object of discussion and verbal speculation, such as in most strategic seminars. No other tech-
nique allows a group of participants to engage in collective action in a safe environment to create
and analyse the futures they want to explore.5
The empirical database of this article is the systematic comparison of eight strategic change pro-
jects in which gaming/simulation was the major methodology. Most of the projects were systemat-
ically evaluated by both the client organization and the consultants, and several were also the object
of evaluative public debates in press and other media. Projects using policy gaming have also been
subjected to in-depth empirical analyses reported in PhD theses. The cases in our study were se-
lected to create a very diverse database, from Europe and the US, from public and private and third
sector organizations, and cover a period of 25 years of gaming/simulation for strategic intervention.
Most cases are about intra-organizational strategy and change, but some also deal with developing
cooperative processes between several independent organizations.6
The structure of this article is as follows. The first main section on the Practice of Policy Gaming is
descriptive and, from the group of eight in our database, summarizes one strategy project in which
policy gaming was the main method. In five subsections it presents policy gaming as a form of
interactive or participatory modelling and simulation. The second main section - The Potential of
Policy Gaming - is interpretive and explanatory, with five subsections focusing on the ways in which
gaming/simulation proves particularly helpful in strategic decision making. Each subsection defines
a class of ‘effective ingredients’ or ‘relevant mechanisms’ we have discovered in policy gaming. From
the strategy process literature we derive explanations as to why gaming mechanisms can help to
develop the emerging and creative strategies modern organizations need, and illustrate how these
mechanisms can actually be made operational. The final conclusions section summarizes our
main insights, while the appendix contains vignettes of the other seven examples in our database.
A key feature of the technique is to involve the client and other stakeholders in the model building.
Thus the interactive development of the schematic was an important part of the process for this client,
who viewed the resultant document as extremely valuable. This combination of inductive and deduc-
tive systems analysis to prepare for policy gaming can be recognized as a procedure belonging to the
class of hybrid and systemic model building routines that have emerged since the advent of modern
systems theory. It is related to interactive processes such as systems dynamics group modelling, sce-
nario building, strategic decision analysis, interactive ‘strategic journey’ designs and the ‘consensual’
approaches.10
Figure 2 shows how the phase of abstracting the information needed to build the model involves elicit-
ing the different mental modes and perspectives that must be confronted in the exercise, and how models
from different academic disciplines and ad-hoc empirical studies can also have a role in the exercise.
Questions
Mission Chairman Board of Directors Profits Lead
Finding?
Global Operations
Finance Revenue Expansion?
Endogenous concers
Competitors
Future Exogenous
Phase III of the gaming process designs the structure that realizes this distinctive feature. The system
as represented in the schematic must be transformed into an operational game. Over the years while
working with many corporate and public clients, a procedure has been developed to transform almost
any complex strategic issue and environment into a game. The process is precisely documented and
replicable and the reader can find descriptions and detailed examples in several sources.11 Here we
will just explain the key principles.
The task is one of capturing the integrality and creativity of the systems analysis by incorporating
the best ideas into the game. This phase can be compared with the formalization phase in mathe-
matical model construction when concepts are translated into mathematical symbols. In this case
concepts become translated into proper gaming language. Building a gaming/simulation resembles
Deduction
Written reports
Schematic
Implementation or realization
Debriefing
models
Mental models
Reference system
through your gaming technique you allowed us to come to closure on this problem and to present to
.[The Board of Directors]. a proposal which will have profound effects upon the future of the
R&D program . the concept was very enthusiastically received and final closure for action was
achieved. (Director of International Programs).
Algorithms
Computer
Formal on charts or
models
forms
Debriefing
Hospital Strategy Lack of awareness of Need to reveal problems Hospital had to work Constant internal Need to stimulate the
Simulation hospital-wide problems; within current discussion more closely with local pressures through a managers to develop
managers had developed patterns and to explore peripheral health tendency of the division a more positive attitude
a stereotypical behavior. new and more productive institutions and had to managers to focus towards change.
lines of behavior. develop procedures and primarily on issues of
learn to act in novel ways. their own concern.
Pharmaceutical Decision Planned investment in Need for intensive To formulate an innova- The consensus building To transmit to appropriate
Exercise unknown territory with communication among tive conceptualization of should draw upon the staff the decision process as
uncertain returns and the top of the R&D the problem, i.e. the wisdom available within well as the dimensions of
potentially severe effects organization as well as advancement of alterna- the organization, thus the problem that had to be
on the company. In with other divisions and tive ways for research & aiding the Office of the considered in reaching
addition there were many upper management. development Chairman in reaching a decision that would take
different internal a decision. many years to come to
perspectives. fruition.
Conrail Policy Exercise Fearing deregulation of Need to communicate the To provide a vehicle for To elicit and promote Find internal and external
the railroads, manage- benefits and potential making in-depth pro- discussion among support for Conrail’s
ment wanted to develop problems inherent in posals for deregulation, internally competing position.
a more complete under- deregulation (within and/or establish how perspectives and to form
standing of deregulation, a Conrail context) to all Conrail could operate in a consensus on an
a complex, technical, actors involved. the future. alternative that would be
Policy Gaming for Strategy and Change
and functioning of the quality and legitimacy for organization. while several micro- the reconstruction of the
excessive and highly con- the new system. political issues compli- assessment instruments.
tested information system. cated regular forms of
deliberation.
The IJC Great Lakes The functioning and This required interdisci- Prior more formal and Conflicting philosophical To create lasting action
Policy Exercise interactions of the vast plinary science-policy traditional methods had positions and interests implies the creation of
human and natural sys- dialogue supported by failed. A novel process was made it very desirable to new connections between
tems are not well under- a shared framework for adopted to find a proper obtain consensus existing networks and
stood, while policy actions discussing and evaluating approach. whenever possible. influencing the rules of
of a multitude of stake- priorities. the game in these
holders across national networks.
borders need to be
concerted.
The Rubber Windmill Political pressures tended Highly experienced and This revolutionary and The need among many This highly political
to obscure that the diverse managers had to politically very sensitive different stakeholders to restructuring of a national
dynamic effects of pro be brought together to deliberation among the discover that they have health care system is an
market policies were not behave as real interests stakeholders needed a safe certain interests in example where all the
understood. would in the circum- environment to find and common. factors causing escalation
stances simulated. test new behavior. of commitment were
present.
543
processes, and why gaming has the potential of realizing these five process criteria. As noted above,
a key feature of the technique is the combination of play or gaming with systems modelling and
simulation. To verify this point, we illustrate how gaming (or role playing) proved useful, and
how systems analysis and simulation were made practical and thus able to yield results. Each
subsection ends with an exhibit showing our conclusions on the ‘effective ingredients’ of
gaming/simulation for strategy.
According to this new paradigm, complex strategic issues typically demand that many different
sources and types of data, insights and tacit knowledge must be integrated into a problem specific
‘knowledge household’. An environment needs to be provided through which different strategies
can be explored, and the problem’s complexity requires a holistic approach in which a wide range
of perspectives, skills, and information is available and managers from different hierarchical levels
are involved. A more limited approach severely restricts the potential for knowledge exchange, which
can lead to sub-optimal solutions. The quality of a decision is directly proportional to the number of
systems elements that can be incorporated: the more points, nodes, and interactions that can be taken
into account, the better the decisions that can be reached. The more logical and evident the pattern,
the more easily the gestalt can be understood and retained.14
Games are effective at conveying the totality of a model and the dynamics of a system. In the EDF
decision exercise it proved essential to capture an integrated perspective of the problem, which re-
flected the mental models of the various stakeholders. The first version of the EDF schematic was
based on interviews with several members of the R&D division. The Vice President for Sales actually
started to laugh when he saw this schematic, revealing a typically closed-minded R&D perspective
of how the company worked, which saw this department as the producer of new leads that resulted
(through internal processes) in new products being brought to market. But the game process re-
vealed that, in fact, by far the majority of successful products were the result of partially and/or fully
developed products bought in (licensed) from outside companies. The Sales Vice President saw the
idea of a European R&D venture more as a scouting tool for new products than as a complete R&D
station, and this view had a great impact on how the policy exercise was developed and used, and on
the ultimate decision that was taken to avoid a ‘bricks and mortar’ solution and adopt a licensing
concept for the venture.
In the EDF game, the players created the new conditions of the system step-by-step by moving
from the current reality to the planned new reality. Although players in the game each identified
with only one role, from this perspective they could gain a perception of the total system conveyed
by the game. This is precisely why the initiators of the EDF project put their hopes on the policy
exercise, to assist R&D management (albeit via some painful experiential learning) to come out of
their too-narrow views of their position, and learn to base their actions on the interests of the whole
company. By actually going through the experience of collectively building and testing an EDF
facility in the safe world of a game, abstract ideas (and fears) became tangible. The specific impli-
cations for all the different business functions of the different alternatives could be made visible.
Pertinent uncertainty could be distinguished from insufficient sharing of knowledge.
As noted above, Tables 2e6 below summarize how policy gaming contributes to strategy devel-
opment. The first two columns refer to the two key features of this methodology, i.e. simulation and
gaming. The cells of these two columns show how policy games are effective, i.e. they define the
mechanisms through which policy games contribute to strategy making. The third column
focuses on what the effect of policy gaming is, summarizing what gaming helps to achieve and
the mistakes it helps to prevent. Table 2 deals with the mastering of complexity.
Communication is essential when important decisions are to be made. Established firms neces-
sarily rely on processes of communication not only to influence decisions, but also to stimulate and
promote dialogue. Top decision-makers have to collect and rely on the wisdom of many people
within and beyond the borders of their organization. The inclusion of middle management is con-
sidered a key aspect of dealing with complexity, as they can play a pivotal role in initiating strategic
change, because they occupy bridging functions at the intersection of organizational boundaries.
But a truly holistic approach will also include front-line management and professionals, clients
and other stakeholders.17
Policy games can also facilitate effective communication across diverse groups, encouraging the
exchange of ideas and bridging communication gaps. Within the context of a game, a highly orga-
nized jargon or special language is developed that permits the various participants to talk to each
other with greater clarity than they might using traditional communication modes.
In the eight cases, conscious choices were made as to when to use many different communication
modes. Thus, for instance, in the University Hospital case (see Table 1 and Appendix) the partic-
ipants started the first round with a role-specific brainstorm session in teams of three. Subsequently,
each team had to give an opening statement, so that participants were informed about others’
points of view. The next round was a process of deliberation and negotiation, where participants
had the opportunity to meet other teams bilaterally or create small ad hoc meetings of several
parties. Important aspects of this part of the session included continuous consultation, lobbying,
and decision-making. Next, a meeting took place between the delegated chairs of each group,
with the other players as an audience who could intervene with written questions. This ‘fishbowl’
technique was difficult and revealing, both for the spectators and for those meeting in the fishbowl.
This process was repeated several times, with the participants having the opportunity to meet other
participants in many different formats. This fast alternation of teamwork, open market communi-
cation, and plenary (or sub-plenary) meetings was later assessed as a very strong asset of the exercise.
The situation specific language created by a game is not only transmitted by written or spoken
words - a good game consists of many different symbols that support communication between
players. These are visual models, and many kinds of cards, game pieces and other paraphernalia
can be used. Take for example the multiple symbols that were created for the Great Lakes Project
(see Table 1 and Appendix). Participants were grouped into seven ‘perspectives’ arranged around
a large table. Each group received event cards giving additional information about their perspective
on the situation. Thus the players representing the science perspectives used a special pair of dice,
which simulated the stochastic nature of creating research findings, and research cards (identified
by the dice) contained information about the game model. The game board was a simple grid with
64 cells representing two systems which progressed in opposite directions; the underlying model
Regarding Confrontation of Free and safe format Gaming and Simulation Gaming and Simulation
Creativity modeled data with of serious play help to: help to prevent:
tacit models Repeated trial Construct a set Accepting and then
Counterintuitive and error of creatively pushing the first
simulation results experimentation different and option that comes
stimulate new ideas allows new ideas integral responses to mind
to mature quickly to strategic issues
Presence of diversity Safely test
in roles stimulates new combinations
out-of-the-box
thinking and captures
the creativity of many
Games temporarily remove the participants from daily routines. Participants are sheltered from
political pressures, as well as from the stifling effects of etiquette and protocol found in real-life sit-
uations. Role-playing takes the attention away from the person. The EDF example showed that
impersonal (in-role) presentation of some of the difficult messages was a very important factor in
the success of the game. When people play roles, they defend a perspective, not their own position:
what they say in the game, they say because their role forces them to do so.
The National Health case was an ‘early warning’ exercise, showing how the outcome of new leg-
islation might be politically unstable, unsatisfactory to most, and even not very helpful to those who
seemed likely to be the short-term winners. The participants discovered that they have certain in-
terests in common, and their resulting consensus was that the responsible political institutions had
to develop a more balanced process in order to avoid the results that the early warning exercise had
indicated.
However, valuable criticism should not be avoided for the sake of building consensus. When
a group develops consensus without proper analysis, or without the stimulus to look across the bor-
ders of traditional perspectives, there is a real danger that only politically feasible and easily imple-
mented strategies will be discussed. In the literature this is called ‘group-think’, and the history of
organizational decision-making is full of fateful examples of this phenomenon.26 A well-prepared
game can offer a wide variety of alternative policy options that can be presented and evaluated. Games
can be structured to avoid premature closure. The EDF story illustrates this point rather well.
During the joint experimental action of a game, value debates become focused, sharpened and
placed into operation in such a way that value tradeoffs can be negotiated. By selectively focusing
the EDF-game on well-negotiated problems and agendas, the basic attitude of working from the
perspective of the entire system was affirmed and a joint definition of the problem reached. In
this respect the design process of the EDF game took away uncertainty and fear because it was pre-
pared with members of the organization and was clearly presented to participants prior to its use.
Clear role descriptions, well tested and clearly announced steps of play, lucid agendas, and a facil-
itator to support the debriefings were some of the ingredients reported as making this policy game
a good environment for pre-decision negotiation.
Table 5 summarizes our conclusions about the consensus building powers of gaming/simulations.
Regarding Clarifies different Rival perspectives Gaming and Simulation Gaming and Simulation
Consensus positions and engage in benign help to: help to prevent:
separates real competition Establish procedural Group-think and
from assumed Safe environment justice and fairness after-the-fact,
differences for fierce debate Identify sources mutual blaming
Puts individual Levels the playing of resistance and battles
‘‘pet’’ proposals field for different the need and room Idea imposition
to a critical test contributions for negation by those in power
Simulation outcomes
identify the winners
or losers but also
suggest potential
‘‘win-win’’ solutions
Strategic change needs ‘champions’ who keep the process alive and all the ‘noses in one direc-
tion.’ One reason for adopting gaming in several of our cases was to use experiential learning to
create a whole network of confident champions. The EDF game guaranteed the impact of the de-
cision over a very long time horizon, which proved necessary in allowing this initiative ample time
to grow and mature. The strategic manoeuvres essential to success in the pharmaceutical case would
require many years, and the players of the game were those who were to run the show in the years to
come. ‘I want them all involved’ said the CEO who started one of the simulation project cases we
report in the Appendix, ‘because ten years from now many more persons than just me will still have to
want what we want today and remember why we wanted it in the first place.’
While commitment is a vital element, group processes can sometimes result in ‘pseudo-commitment’,
and there is always the danger of passivity in group-discussions, a phenomenon also labelled as ‘free rider’
behaviour. The strict and balanced distribution of tasks and transparent activity of all the participants as
planned in the steps of play in a gaming-simulation are safeguards against such non-committing absten-
tion from involvement.
Commitment is the result not only of participation in the game, but is also the product of the
many different involving and motivating elements in the chain of events that we called the process
of participatory modelling. Table 6 links policy gaming to the formation of commitment.
Regarding Simulation outcomes All role players are Gaming and Simulation Gaming and Simulation
Commitment are early warnings actively involved help to: help to prevent:
of the risk of failure Play creates bonding Create commitment Group-think and
They reveal essential and levels to action in those Escalation of
contingencies and institutional defenses whose energy and commitment
conditions for success Mastering the wisdom are essential
A long time horizon simulated challenges for the success of
reveals the need for creates confidence a strategic
consistency and and trust initiative
endurance
Policy exercises seem to be at their best in their ability to engage managers, support staff and experts
to confront and negotiate issues, and policy gaming is a versatile method for dealing with ambiguous
issues, in eliciting a shared vision or plan for an organization in confusing, exceptional and urgent
situations, where precedent is of little value. It has established itself both theoretically and practically
as a valid means of portraying complex realities and of communicating coherent overviews of those
realities. The discipline of gaming-simulation has its own body of knowledge, its own research tradi-
tion, its own professional practice and its own forum; and it learns from systematic reflection on its
professional practice.30 We are optimistic about the future of gaming/simulation as an important tool
for strategy development, but we also think it can improve its effectiveness and the scale of its impact
by using modern technologies. The base of knowledge and experience developed over the last thirty
years provides a good foundation for further development of policy gaming into a direction that most
Make-believe has always been an important way to prepare ourselves for the real thing. We should
use this method in a focused manner. We now have far better tools for this purpose than we had
ever before. We should take advantage of them. Is that a frivolous idea? Playing games in dead
earnest? Anyone who thinks play is nothing but play and dead earnest nothing but dead earnest
hasn’t understood either one.
Acknowledgements
The authors thank Stuart Hart and Sean Miskell for their kind assistance in preparing this article, and
the Long Range Planning Editor in Chief and his referees for their useful guidance and support in
refining both our ideas and their expression. The data base for this article was created with the
help of many clients, game participants and colleagues: we express our grateful thanks to all those
who contributed.
Appendix
Seven Additional Examples of Relevant Policy Exercises
Deregulating Railroads
During the Reagan administration, deregulation became a central policy, and the railroads came
under scrutiny. Conrail, a major Eastern US railroad, faced with this threat, employed a policy ex-
ercise for their top management with several objectives. Foremost was the need to better understand
the implications of deregulation. At the time the policy exercise was commissioned, the Conrail
management team was opposed to deregulation; through participation in the exercise new oppor-
tunities were envisioned under modified deregulation legislation. The exercise was then used to
lobby not only members of Congress but also to enlist the support of the management of competing
transport systems (trucking and air).
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ulation is one specific type of game and a specific format for serious play. A gaming/simulation can be
distinguished from free role-playing; it is true that roles form a part of the simulation, but a gaming/sim-
ulation also has other components. In addition to role descriptions, a designer also uses scenarios, a series
of prescribed actions for operator and players as well as carefully selected symbols and paraphernalia:
game boards, cards, etc. In a game, reality is simulated through the interaction of role players, using
Biographies
Jac. L. A. Geurts is Professor in Policy Science at the Department of Organization Studies of Tilburg University in
the Netherlands and teaches strategic management at the TIAS/Nimbas Business School of this University. He
previously held positions at Philips International and at the University of Nijmegen, Cornell University and the
University of Michigan. Tilburg University, Faculty of Social and Behavioral Sciences, Department of Organization
Studies. P. O. Box 90153, 5000 LE Tilburg, the Netherlands. E-mail J.L.A.Geurts@uvt.nl
Richard D. Duke is Professor Emeritus of the University of Michigan’s College of Architecture and Urban Planning
and former Chairman of the Certificate in Gaming/Simulation of the Rackham Graduate School of the University
of Michigan. 329 Lake Park Lane, 48104 Ann Arbor, Michigan, USA. E-mail DickDuke@umich.edu
Patrick Vermeulen is associate professor of Organization Studies at Tilburg University. Previously he held positions
at the Rotterdam School of Management (Erasmus University Rotterdam) and the University of Nijmegen. He has
a Ph.D. from the Nijmegen School of Management. Tilburg University, Faculty of Social and Behavioral Sciences,
Department of Organization Studies. P. O. Box 90153, 5000 LE Tilburg, the Netherlands.
E-mail Patrick.Vermeulen@uvt.nl