ILLUSTRATION 6.5 War gaming in South Africa ILLUSTRATION Deloitte proposes war games to develop a strategic solution to a major pollution problem in South Africa. Delnitte, nne of the 'hig fnur professional cervice firms, nwned hy their original deualnpers, and current nwners has nearly 200,000 employees offering accountancy, dispute their responsibilities, which are liable to be tax, consulting and business advisory services in very expensive. 150 countries around the world. In 2010, it also got There are clearly many stakeholders involved. First into the war gaming business. In particular, it bought there are the mining companies, whose mines are the a small simulation company developed by the War source of the problem. There are the various local Studies Group at King's College, University of London. municipal authorities, threatened by both flooding and War gaming originated with the Prussian Army in the polluted water. There are no less than five national late nineteenth century and developed particularly government departments involved, from Mining to during the Cold War in the twentieth century. War Agriculture, each with its own interests to defend. games place the players in the positions of different Local farmers are very concerned about the threat to actors (e.g. enemies or allies), and ask them to play the water supply that is vital to their agriculture. out a sequence of moves and counter-moves as if they were the actors themselves. Two famous principles arios. What if there was major pollution? This would A war game helps players respond to various scen- help guide the play. The first is from Sun Tzu, the be a catastrophe for local communities, but it would Chinese general who wrote the militany treatise The also threaten the labour supply for the mining com- Art of War about 500 years BC: 'To know your enemy, panies: this possible cost should be factored into the you must become your enemy.' The second principle calculations of the mining companies as they contem- is from the nineteenth-century German General plate the extent to which they would be prepared Helmuth von Moltke: 'No plan ever survives the first to pay for solutions. On the other hand, what if the collision with the enemy." War games thus help players mining companies were forced to solve the problem understand how the various players will act as action wholly at their expense? Would the mining companies unfolds over time. Deloitte uses war gaming simula- then prefer simply to abandon the mines, or at least tions to help clients plot strategies for new product reduce investment in capacity, with knock-on effects introductions, pricing changes and new market entries, on local employment? Putting players into the position all situations where competitor reactions can be of the various stakeholders helps everybody under- highly significant. But they can be used in complex stand fully the interests involved and even, perhaps, public policy arenas too. The problem of mine drainage around Johannesburg Source Based on Deloitte, "War gaming may just be the answer to in South Africa is an example. Gold has been mined solving South Africa's own Chenobyl", 2011. there since 1886, but the mining process ends up by to see possibilities for shared solutions. mixing water, oxygen and heavy metals to create a Questions diluted sulphuric acid. This acid is seeping out into water sources and is now polluting 10 per cent of the potable water supplied by the local water company. In an area that is short of water, this is potentially 1 War games can be used to guide new product introductions, pricing changes and new market entries. Can you think of other business situations where they could be useful? disastrous. Worse, the mines must be continuously pumped out in order to avoid flooding the vicinity, including local towns and an important bird sanctu- ary. The trouble is, many of the mines are no longer 2 Are there any limits or dangers to comparing business strategy to war?