In a competitive environment, you often experience events that are not in the original plans, and they do have an impact on the delivery of the objectives.
And yet, when planning, very often internal discussions focus more on execution, budgets or deadlines but what other players may do is not considered with such attention. The competitive perspective is quite easily overlooked in decision making.
To run a modern agile business, ready to respond to competitive threats, the leaders must think about various potential scenarios and prepare their organization to react adequately and quickly. And since those threats are too often coming from the competition, it is worth knowing how to read their minds!
Of course, it is impossible to predict all their moves. But it is possible to identify their intentions and then the most likely strategic initiatives.
The whole idea of the Red-Teaming is to start thinking like our adversaries.
The Red-Teaming plays a central part in the WarGaming process, that usually involves three phases:
- Preparatory input: Collection of all the necessary data (most of the information is in your hands or readily available in the public domain);
- Red-Teaming: When the teams role-play the key market players.
- Own Strategy Refinement (contingency planning): when the team refines current strategies and prepare contingency plans against serious threats.
Today let’s focus on Red-Teaming (You can read about WarGaming HERE).
When we analyze the competitors, very often we tend to see through our glasses. In such a case, we judge the market situation, taking into account our perspective and our way of thinking, not the competitors’.
The point is that we should look at the market and ‘make decisions’ that make sense for them not us. Do you see a difference?
The starting point and basis of our Red-Teaming method is Porter’s Framework of Competitive Analysis that helps to identify the Competitor’s Future strategy.
To read the minds of the competitors, during Red-Teaming we look not only at what we observe that they DO and CAN DO (right side of the framework), but we also look at their internal motivation drivers(i.e., internal culture, value system, leaders’ agenda, etc.). – These aspects can give more hints on the future moves than just behavior known from the past.
Three Steps of Red-Teaming
We mapped the Red-Teaming process into these three simple Steps:
To find out how the strategy of the competitors looks like, we have to understand what their challenges are. We won’t get it if we don’t first analyze internal views and put their situation in the market context.
- When we role-play the competitor, first we collect all the information and immerse into the character of the key decision makers (Step 1)
- Once we do it, we can better assess the market situation – Where the market goes. (Step 2)
- The final step is to develop the Strategy. We look at what are the expectations of the key stakeholders. And then, based on the operating environment assessment (Market & Competition vs. our capabilities) we will identify possible paths to deliver on objectives. (Step 3)
Competitor’s Strategic Compass
As the final result you will have a clear overview of the competitor’s strategy:
- Key Strategic Objective – What they want to achieve?
- Strategic Areas – derived from the Critical Strategic Issues
- And finally, the list of strategic initiatives to be implemented by the company to address those main challenges
End here you go!
You have a one-page overview of what the competitor is likely to do in the next 1-2 years. Even if not all initiatives materialize, you will better understand why they do what they do.