Can Management Wargaming support the introduction of lean startup techniques?

Corporate Startup Summit Cologne Prof. Dr. Nils Högsdal, 26.08.2013

HdM Stuttgart / Stuttgart Media University

Competence Outcomes

• Know what Management Wargaming is • Understand which aspects of a lean approach can be

supported • Have tools to analyze and develop a communication

strategy to get commitment for going lean

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INTRO: MANAGEMENT WARGAMING

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Wargaming

• Developped in the military with the goals to develeop and evaluate strategies and tactics and to recognize success factors

• Strategy as the central element

• Found its way into Management first time during the 1950s

• Very different approaches, but common ground is using simulation and gaming approaches to develop new strategies / strategic moves

The Business Modell as the new holy grale

Source: http://www.ge.com/sites/default/files/Innovation_Overview.pdf

The Business Modell as the new holy grale

Source: http://www.businessmodellgeneration.com

Putting it into perspective

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https://archive.harvardbusiness.org/cla/ web/pl/product.seam?c=25903&i=25905&cs=f 85785d3580feb87e2bce1535af10c2f

Lieferanten Investitionen‘/ Assets

Personal Produkte, Services Value Propositions

Kunden nach Segmenten

Märkte Chancen/Risiken

Kosten und Charakteristik Umsatzströme

Results of a Management Wargaming Workshop

Basierend auf „Business Model Generation”: (Autoren: Osterwalder, Pigneur 2012) als Ergebnisse des Workshops vom xx./xx.0x. in xxxx mit Prof. Dr. Nils Högsdal

EXAMPLE: NEW STRATEGIC MOVES IN REGARD TO CUSTOMER-MARKET-FIT

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Basic setting

• Target Group – C-Level and one level below (2 Billion revenue) – Ca. 20 Persons in 5 competing teams

• Approach – Wargame with a model of the own business – Market and financial model with real data

• Timing – 1,5 days, 4 decision cycles = 4 Business Years – A set number of moves for Year 1 and Year 2 – Invention of own moves for Year 3 and Year 4

Service

Pads

Imaginge a generic version: Customer-Market-Fit

• You are selling 3 kinds of coffee machines to different customer groups

Professionell

High-End

… including 3 professionell Customer Groups

Corporates

Restaurants and Hotels

Facility- und Catering-Service-Providers

and 2 private Customer groups

The Georges

The Rogers

Generation of strategic moves

• Each decision cycle allowed the generation of new strategic moves impacting the business mode:

– Value Proposition und Product and Service Offering

– Target Group, Customer Relationship

– Sales Channels

– Ressources and (Investment) Budgets

– Activities und Staff

– Partners

– Further aspects (e.g. Customer Satisfaction, New market segments and technologies as well as the time-horizont

• Examples: New sales channel, new pricing/revenuel model, Completed New Value Proposition, Launch of new product and services, Outsourcing of services etc.

Outcome

• A very senior group within the company was exposed to a number of aspects of the lean startup approach

• They embraced it in a risk-free setting and a common language and understanding for the current challenges (and opprtunities) in regard to the business model evolved

• A change in mindeset took place moving away from the current focus on prodcuts towads the entire business model with a strong focus on customer-market-fit

• A wide array of new „Moves“ (hypotheses…) was created now waiting for validation

• A number of inefficient moves („we should buy …) was once and for all settled

• High level of engangement and fun!

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Overall view

• Management Wargaming can help to initiate a change in mindset e.g. at a management conference

• It will expose decision makers to a number of lean startup techniques in a very intense and rapid way

• It will get people to think along the business model canvas, generate a common understanding of the status quo and it will help to create an amazing number of ideas

• Thoses ideas are hypotheses to be validated so it really is a jump-startup when going lean – no more, no less

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Contact and personal info

• Prof. Dr. Nils Högsdal is teaching corporate finance and entrepreneurship at Stuttgart Media University

• Before that he developped the TOPSIM – Brand which is now part of the TATA Group.

• Contact info Prof. Dr. Nils Högsdal Hochschule der Medien Stuttgart Nobelstr. 10, 70569 Stuttgart https://www.hdm-stuttgart.de/home/hoegsdal E-Mail: hoegsdal@hdm-stuttgart.de Telefon 0711-8923-2725

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