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Long Range Planning 40 (2007) 535e558 http://www.elsevier.

com/locate/lrp

Policy Gaming for Strategy


and Change
Jac L. A. Geurts, Richard D. Duke and Patrick A. M. Vermeulen

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.

536 Policy Gaming for Strategy and Change


The practice of policy gaming
Strategy games without the generals
One of history’s more successful entrepreneurs, the Russian Czar Peter the Great, loved playing war
games near his castle. He owned a specially created and well-trained mock army that he could ac-
tivate at any time as his tool for doing what he liked best: testing his strategic talents and arousing
his war fantasies.7
The first war games were probably developed by Asian strategists more than a thousand years ago.
Modern military gaming efforts have reached high levels of sophistication, approaching the ingenuity
displayed by science-fiction writers. Newspapers reported that Norman Schwartzkopf was given op-
erational responsibility for the Gulf War because he had prepared a new and surprising strategy for
this mission in a war-gaming exercise. Probably the largest war game ever - the Millennium Challenge
- was played in the United States in the summer of 2002. This unique war game saw Lieutenant
General Paul van Riper play the role of Saddam Hussein against the US military e and ending up
being declared the winner.8

the well-understood practical process of making policy games can be


undertaken at an acceptable cost, and without prior experience.

Intriguing as these stories are, the following example of strategy-games-without-the-generals may


be of greater interest to readers of this journal. In this section we reconstruct the content and main
steps of a process of policy gaming within a large United States-based pharmaceutical company.
The case description that follows is organized according to the steps of a typical gaming project,
and also presents a number of methodological principles. It exemplifies the well-understood prac-
tical process of making policy games, which organizations can undertake at an acceptable cost, even
where they have no prior experience of the method.9

Phase I. Setting the stage: the European discovery facility


For the US pharmaceutical company featured in this case, a new and potentially very important ele-
ment in their strategy was the idea of starting an R&D facility in Europe. It was felt within the company
that its drug discovery and development effort had to be extended into new markets, and that a new
European R&D facility (the ‘European Discovery Facility’, or EDF) was their best option.
An earlier decision to expand had not gone well, and analysis had revealed this was largely due to
a failure to recognize the complexity of the decision environment and the importance of involving
key personnel in the process. As a consequence of these difficulties, management resolved from the
outset to use a process that would involve the appropriate people within the organization. A deci-
sion had to be taken in such a way that important R&D personnel and the Board of Directors would
accept it as realistic and legitimate. The company opted to use a policy exercise that would require
top management to explore issues and options in a simulated environment, and think through their
implications.
The problem that was initially presented was: In which country should we locate this facility?, but
interviewing different executives and professionals made it clear that the question was framed too
narrowly. Influential company voices connected the decision of going to Europe with the ongoing
debate about the function of R&D within the company. After some consideration, R&D manage-
ment decided to broaden the scope of the policy exercise to focus on questions such as: What is the
future of R&D in the industry and in our company? Should the company expand into Europe? If yes,
what activities should they expand? Would the company require new skills? In what country should
these activities be located? How should the plans be implemented?

Long Range Planning, vol 40 2007 537


Phase II. Clarifying the problem e systems analysis
In a typical gaming project, information will be collected and organized via a wide variety of proce-
dures: interviews, a literature review, and workshops. All of the major stakeholders are interviewed to
find the problem boundaries. Care must be taken that not only are relevant internal executives inter-
viewed, but also that external experts and data are explored. The purpose of the literature review is to
find relevant models and concepts as reported by prior research. Saturation is the criterion used to
stop this process: when no new ideas, frames and/or perceptions emerge, it is time to go to the
next step: the consolidation of these insights into an integrating schematic. Following this method,
information about the elements of the problem was collected and organized in preparation for this
EDF project simulation, with most of the major stakeholders being interviewed and much new
data also being brought forward from a literature review. The project team of consultants worked
with the client to synthesize the many elements into a large, integrated and explicit model that could
be easily discussed. On one single sheet they developed a graphic containing the ‘Big Picture,’ an over-
view of all of the considerations and problems that might be significant to the EDF policy issue, a sim-
plified version of which is presented below as Figure 1.
The schematic places the following elements in relation to each other:

 The primary stages of the drug discovery and development process;


 The interaction of this process with related exogenous processes (competition, universities, etc.);
 The primary in-house (endogenous) perspectives (medical, marketing, regulatory, management,
manufacturing and science);
 The relationship of the discovery and development process with the rest of the company, the market
and the company’s owners;
 A wide range of endogenous and exogenous concerns placing the discussion about the discovery
facility against a 25-year time horizon; and
 The central questions that the gaming exercise should address.

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.

Phase III. Designing the policy exercise


If policy gaming shares the key feature of involvement with other approaches, what makes gaming
different? A particular feature is that participants work ‘in-role’ to create the future step by step.
Playing roles reminds participants that this is a ‘game’, that they are ‘playing’, and that their imag-
ination and creativity are what are required for productive communication.

participants work ‘in-role’ to create the future step by step . this is


a ‘game’, and imagination and creativity are required for productive
communication.

538 Policy Gaming for Strategy and Change


Shareholders

Questions
Mission Chairman Board of Directors Profits Lead
Finding?
Global Operations
Finance Revenue Expansion?
Endogenous concers

Primary Drug Discovery and Market Share Where?


Perspective Development Process

Competitors

New How &


Therapy Pharmacy When?
Chemicals

Other Lead Finding

Future Exogenous

Figure 1. A condensed version of the EDF schematic

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

Gaming/simulation 12 building blocks


Debriefing

Written reports

Schematic
Implementation or realization

Conceptual model Additional analyses


Abstraction

Debriefing

Scientific Interviews, Delphi, workshops, etc.


Ad hoc research

models

Mental models

Reference system

Figure 2. Gaming/simulating as a form of participative model building

Long Range Planning, vol 40 2007 539


a matrix conversion process, where the columns reflect the systems components and row headings
reflect the game elements (roles, rules, scenario, format, steps of play, etc).
Policy games usually consist of a series of cycles which are iterative, becoming more complex cycle
by cycle, and within any given cycle players are confronted by a set of steps. Figure 3 provides an idea
of how activities might be structured in a typical policy exercise, and shows how the roles interact and
how the players, cycle by cycle, move along the simulated time axis (time ¼ t, t + 1, t + 2 etc).
Essential to each cycle are the decisions, which require the irrevocable allocation of the resources
that the players control. Decisions are processed through an accounting system, which assesses the
results of the decisions and increases the simulation time by one increment (e.g. one year). In policy
games several different simulation mechanisms can be used or combined. These can be formal or
informal procedures, and can be driven by the players or by outsiders. Regardless of the character of
the processing system involved, it is extremely important that it creates results (indicators) that are
relevant and important for the game’s purposes. A cycle usually ends with the facilitator announc-
ing and reviewing the result, after which the next cycle starts.

Phase IV. Developing the exercise


The scenario of the EDF policy exercise outlined a brief history of the corporation, the company’s
mission, the pros and cons of a European Discovery Facility, and future considerations from a variety
of perspectives (science, medicine, management, manufacturing, marketing, regulatory activities, in-
ternational concerns, etc.). During the course of the exercise, events were introduced to update the
scenario, and players were expected to evaluate the impact of these events on their decisions.
The roles in the EDF exercise represented the key perspectives that influence the R&D process;
participants were asked to assume and represent the issues and concerns that would be particularly
important to that particular perspective. The selected format made extensive use of graphic displays,
indexed notebooks and databases, and the game was set in a room layout and environment that
resembled a war room. The format of the game was role playing and negotiated decision-making fol-
lowing a logically ordered set of decision problems presented to the team as semi-structured multiple
choice questions on forms and wall charts. Fourteen strategic questions were considered. Every ques-
tion within the game material offered different alternatives. The participants discussed the alternatives,
created new options where necessary and - under some time pressure - made a team decision. Before
the final run, the game was put through several test runs with informed and trusted participants.

the leading option at the outset was rejected in favour of a cheaper


and quicker alternative articulated as the exercise was played out,
Phase V: Application
In this case, the result was unexpected; what had been the leading option at the outset was rejected
in favour of an alternative that was articulated as the exercise was played out, and which was both
cheaper and quicker than that initially preferred. Participant evaluations were elicited through post-
game debriefings that included an informal discussion as well as a questionnaire that assessed the
success of the exercise on several criteria. The data indicated that the participants perceived the pol-
icy exercise to be successful, that it had uncovered aspects of the problem of which they had pre-
viously been unaware, and that they themselves had come up with new ideas that were given careful
consideration. The client readily acknowledged the sharp changes in the players’ views of the new
facility that had resulted directly from the exercise experience:

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).

540 Policy Gaming for Strategy and Change


Scenario
(preceding Cycle One)

Cycle One (Time = t)


(one complete sequence though the steps of play)
Step 1. Event – presents new information
Step 2. Group meetings – develop new policy
Step 3. Discussion and interactions – trade ideas and proposals
Step 4. Consensus on policy – reach agreement
Step 5. Make decisions – each team allocates “role-specific” resources
Step 6. Accounting system, processing the decisions:

Decisions (at time t)

The Simulation Mechanism

Algorithms
Computer
Formal on charts or
models
forms

Players vote Experts panel


Informal
on outcomes as judges

Indicators (at time t+1)


Step 7. Facilitator announces results – e.g., the budget for next year

Cycle Two (Time = t+1)


(return to Step 1)

Cycle Three through Cycle “n” (Time = t+n)

Debriefing

Figure 3. Typical Steps of Play Sequence

The potential of policy gaming


The 5 C’s of policy gaming
To understand the actual contributions of all the eight policy games in our database, we derived from
their project files references to clients’ perspectives on the nature of the policy issues and their mo-
tivations for selecting gaming. From the evaluations we extracted participants’ and clients’ statements
on their experience of the gaming projects’ contributions. Using an inductive comparative analysis
we interpreted these data and grouped them in five categories labelled ‘The Five Cs’: Complexity,
Communication, Creativity, Consensus and Commitment to Action. Table 1 shows the result of
this comparison, and illustrates how each of the eight policy issues was perceived as needing process
support in each of five functional categories.
As noted in our introduction, we can recognize in these five categories the range of both older
and more recently-emerged criteria for the success of policy processes. The following five subsec-
tions show how writers on strategy have identified each criterion as crucial for successful strategy

Long Range Planning, vol 40 2007 541


Table 1. The eight projects and the 5 Cs
542
Case Complexity Communication Creativity Consensus Commitment

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

‘‘dry,’’ and ambiguous politically feasible.


issue.
Office of the Secretary of Need to propose alterna- To help the review group Derive from many To reach consensus, and Internal OSD agreement
Defense tive forms of organiza- visualize the big picture of individual proposals to capture the agreements would support Colin Po-
tional structure in a state OSD over a medium to a new combination of and disagreements as well well in finding external
of crisis and urgency. long-term horizon (5-15 recommendations. as their underlying political support.
years). rationale.
Long Range Planning, vol 40
New Employee Orienta- To help all employees Help to develop confi- Provide the opportunity Develop skills to make To establish a new corpo-
tion Simulation understand a dramatic dence, ownership and to for experiential learning collaborative decisions in rate culture and to imbue
change in the strategic reduce the fear of the to mobilize core compe- the new structure. each employee of the new
position of the company. unknown. tencies and test skills one company with a working
might need in the future. knowledge of this
perspective.
Dutch National Social Parliament forced an Only consultation of No prior solution avail- Parliamentary acceptance The support of champions
Employment Program urgent reorganization but internal experts and able, it had to be created of the new system needed from all echelons would
nobody oversaw content executives could produce from within the the voice of all echelons, reduce resistance during
2007

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.

Complexity and modelling


In the 1960s and early 1970s, formal modelling techniques, which originated in related research
disciplines such as systems analysis, decision analysis, systems dynamics, and operational research,
entered the field of corporate strategy development. The application of systems analytic methods to
organizational policy problems was initially successful and popular, but serious problems emerged
when this paradigm was applied to ambiguous and often heavily disputed strategic issues in or
between organizations, where the absence of adequate theory and empirical data made validation
impossible. Moreover, the practical relevance of many of the modelling efforts was questioned,
as managers and other policy actors had difficulty understanding and using the formal models.12
The ‘crisis in the hard systems methods’ became widely acknowledged: that traditional modelling
could only be applied to well-structured policy problems, and as strategic problems were often ill struc-
tured (or ‘wicked’), the contribution of the traditional formal models to their solution was limited. As an
alternative to the ‘hard systems’ a new paradigm and (under different names) several forms of ‘soft sys-
tems thinking’ were developed which challenged some characteristics of the conventional paradigm.13

strategic problems are often ‘wicked’ and ill structured . the


contribution of traditional formal models to their solution is limited

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.

544 Policy Gaming for Strategy and Change


players in the game each identify with only one role [but] from this
perspective can gain a perception of the total system

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.

From models to multilogue


During the 1980s, systems analysts realized that much of the understanding of a system is generated
during the process of model building, which led to the lesson to involve the client and their

Table 2. How policy gaming helps to master complexity

Effective ingredient Effective ingredient Impact of each effective


of the Simulation of the Gaming Ingredient on Strategy
element in Policy element in Policy
Gaming Gaming

Regarding  Develop a systems  Conveys a systems Gaming and Gaming and


Complexity perspective on a perspective Simulation help to: Simulation help to
strategic issue  Integrate hard and  Create, integrate, prevent:
 Integrate/organize soft data and analyze a specific  Jump-starting from
knowledge base  Understand the decision and broad a biased and narrow
 Ability to test and dynamic characteristics knowledge base knowledge base
assess strategies by of the system  Arrive at logically
getting an idea of  Allows to look back sound and actionable
possible effects and from many different conclusions
side effects futures  Allow for evaluation of
 Helps us to understand effects and side effects
and explore the future based on many
as a set of uncertainties different criteria
and possibilities
 Reveals potential
differences between
short term and
long-term effects

Long Range Planning, vol 40 2007 545


stakeholders in the modelling process. Gradually, the definition of what constitutes policy-relevant
knowledge shifted from a science-oriented conception towards a consensual/constructive defini-
tion. As part of this shift, methodologists started to stress that systems analytical techniques could
be productively combined with gaming techniques.15
In 1974, Duke conceptualised gaming/simulation as a hybrid, a ‘multilogue’ (as opposed to a
dialogue) communication form, as a language for complexity for the future, allowing many persons
with different perspectives to be in contact with each other, using different forms of communica-
tion in parallel. Duke’s book, like several others in that era (e.g. Don Michael’s On Learning to Plan
and Planning to Learn, 1973) were, in retrospect, ‘early warnings’ against the limitations of rational
planning. Duke envisioned gaming/simulation not primarily as a predictive device, but as a form of
human communication, taking the view (which is again currently often supported) that man is
a communicative being. A game is a tool to structure communication in complex situations.16

A game is a tool to structure communication in complex situations

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

546 Policy Gaming for Strategy and Change


progressed through the four seasons. The interactive situation and ‘virtual reality’ created by the
game was able to convey enduring structural information quickly. In that sense, a game is a com-
munication mode capable of linking tacit to formal knowledge by provoking action and stimulating
experience. Table 3 summarizes how policy gaming aids communication.

Gaming and creativity


The Dutch philosopher Johan Huizinga has made a major contribution to the understanding of the
fundamental link between play and creativity. In Homo Ludens, his famous study on man as
a player, he put forward the thesis that innovation can only be achieved through play.18 Play makes
people free: in the free and safe activity of play, and the resultant free spirit of the playful mind, the
individual can go beyond the borders of the limiting forces of everyday life. In the EDF game’s
evaluation, the fact that holders of dissident views were allowed to role-play, and thus ‘get heard’,
was considered very valuable. The many parties involved in the National Health example accepted
the invitation to participate in what was a revolutionary and politically very sensitive experiment
precisely because it was a game.

in the National Health ‘game’, participants joined the revolutionary


and politically very sensitive experiment precisely because it was
a game.
Firms’ competitive advantage is believed to depend strongly on their ability to capitalize on the
creativity of organizational members, and the management of creativity has therefore become a key
priority for many firms.19 Creativity is stimulated by participative leadership and collaborative cul-
tures, as well as by empowerment and incentive systems.20 This, however, is no easy task. Accumu-
lation of experience in a person, a team or an organization leads to the development of a repertoire
of responses to many potential challenges. As Mintzberg points out, finding the appropriate re-
sponse to a challenging issue is not a science, but a craft, concerned with combining experience

Table 3. How policy gaming helps to communicate about strategy

Effective ingredient Effective ingredient Impact of each effective ingredie


of the Simulation of the Gaming on Strategy
element in Policy element in Policy
Gaming Gaming

Regarding  Simulation models  Multilogue: the Gaming and Gaming and


Communication and tools focus, simultaneous Simulation Simulation
clarify, and structure and well structured help to: help to prevent:
communication dialogue of different  Install practical  To a priori
 The simulation people using different and interactive exclude and alienate
introduces new and modes in parallel. strategy-making important voices
situation-specific  Games stimulate using all know-how and partners
shared concepts and an open discussion in an organization
language. climate  Engage many
different perspectives
and stakeholders
and arrive at integral
and multifunctional
outcomes

Long Range Planning, vol 40 2007 547


with creativity to find a new, original, inspiring and appropriate pathway into the unknown. Play is
a highly effective way to develop new combinations, which, according to Schumpeter, are precisely
what innovation requires.21
Creativity presupposes fun, motivation and effort. Gaming has the power to stimulate creativity
by its very nature, and is one of the most engaging and liberating social technologies for making
group work productive and enjoyable. The data from the questionnaire in the pharmaceutical com-
pany EDF case indicated that the participants not only felt that the policy exercise uncovered as-
pects of the problem they had previously been unaware of, and that they themselves had come
up with new ideas, but they also perceived the policy exercise as an enjoyable way to formulate
company strategy. Gaming puts the players in an ‘experiential learning’ situation, where they dis-
cover a concrete, realistic and complex initial situation, and the gaming process of going through
multiple learning cycles helps them work through the situation as it unfolds. Policy gaming stim-
ulates ‘learning how to learn’, as in a game, and learning by doing alternates with reflection and
discussion.22 The progression through learning cycles can also be much faster than in real-life. A
child learns through play, and when it has learned all it can from one toy, another one becomes
the favourite for a time. Games and toys are, to use a term from the Tavistock Institute, ‘transitional
objects’. In the simplified and safe world of the game, the child learns and practices essential living
skills. This linkage between playing and learning is also stressed in the management literature. De
Geus, the former Shell futurist, points out that models and simulations can perform this function
for managers, as transitional objects fulfilling the temporary function of providing a safe learning
environment.23 In the EDF decision exercise, the interactive design process and the testing of the
initially preferred strategies in the simulation resulted in counterintuitive learning, with the result
that product development could no longer be viewed solely from the R&D perspective. New ideas
were given the chance to prove themselves in the simulation, and their performance in this test also
made them acceptable to the doubters.
Problem solving requires creative experimentation and policy gaming produces a productive
environment for creativity as Table 4 explains.

Seeking consensus through policy gaming


Through the ages, games have attracted people because they trigger positive rivalry in a safe and
regulated environment. Human beings seek and enjoy both the tension of competition and the

Table 4. How policy gaming stimulates creativity

Effective Effective ingredient Impact of each effective ingredient


ingredient of the of the Gaming on Strategy
Simulation element in Policy
element in Policy Gaming
Gaming

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

548 Policy Gaming for Strategy and Change


procedural justice of ‘fair play’. Playing games levels social barriers and stimulates cooperation
among ‘men of good will’. Team sports challenge players to align their individual aspirations
and skills to the achievement of the common goal. Anthropologists have come to understand
the role of games in either challenging or strengthening existing structures and institutions.24 These
features can also be used productively in strategic debates in modern organizations.
Strategy processes involve consensus building, so that all parties can agree on a certain decision.
Dealing with major problems needs the concerted action and support of many stakeholders. In the
process of consensus building, individual actors engage in extensive discussions in which the pros
and cons of various perspectives and possible moves are presented and some kind of agreement is
developed as to the organization’s fundamental priorities. This is considered essential for the suc-
cessful execution of strategy and overall firm performance, as managers at various levels need to act
on a shared set of meanings and beliefs that guide the organization in the desired direction. A pain-
ful and conflict-ridden collective thought experiment is much more desirable than a conflict-ridden
and stalled implementation process.25

A painful and conflict-ridden collective thought experiment is much


more desirable than a conflict-ridden and stalled implementation
process

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.

Long Range Planning, vol 40 2007 549


Table 5. How policy gaming helps towards reaching consensus

Effective ingredient Effective ingredient Impact of each


of the Simulation of the Gaming effective ingredient
element in Policy element in Policy on Strategy
Gaming Gaming

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

Serious play and commitment


Since ancient times, people have played games as a part of their rituals to challenge fate and to over-
come their fear of the unknown. Entering symbolically into the future to fight the ‘ghosts of the
future’ is an element of many rituals. Anthropologists report on the role of games as bonding rit-
uals. Games help to strengthen social ties, and group therapists find that role-playing in group ses-
sions creates safety, feelings of solidarity and protection and this empowers clients to realize new
goals and commit to a new course in life.27
In the same fashion, when members of a modern organization move collaboratively through
a well designed game and towards the assessment of possible impacts of major decision alternatives,
they become involved, reassured and committed. However, playing a game about one’s own orga-
nization can also be a startling experience. The process of objectification that takes place in this
form of serious play helps to reinforce memory, stimulate doubt, raise issues (disagreement forces
further discussion), and to control the delegation of judgment (those who are affected can check the
logic of action). All this fosters the power of these ‘exercises in explicitness’ to prevent unrealistic
over-commitment to one idea. This ‘virtual look into the future’ also helps to explore the unfor-
tunate situations and conditions where an elected strategy goes off track and/or becomes a fiasco.

Those involved in the decision became seduced into continuing to work


on the strategy, trying to avoid the ‘defeat’ involved in killing it off
Unrealistic over-commitment is a very human flaw; it cannot be easily remedied by a single tech-
nique. The pharmaceutical example can be interpreted as an argument against this phenomenon.
Some decision-makers get too involved with a project, which happened in an earlier internation-
alisation strategy by this company when an expansion into an Asian market escalated in the wrong
direction. The few people involved in the decision process became isolated and got seduced into
continuing to work on a strategy that should have been stopped earlier, trying to avoid the ‘defeat’
involved in killing it off. When it did eventually fail the penalties were harsh - the Director of In-
ternational Affairs was sent home. One remedy for this ‘fear of failure’ is to broaden the base of

550 Policy Gaming for Strategy and Change


responsibility. The CTO in the pharmaceutical R&D decision adopted this solution by involving as
many people as possible in the second (European) strategy project.
The commitment of top managers is critical for strategy making, as initiatives lacking the active
support of top managers soon end upon the pile of good intentions. Charismatic and dedicated
leadership is important, but increasingly this is not enough. More and more people are active in
realizing strategy as relatively autonomous decision-makers, and the role of top managers has
changed from ensuring the pursuit of intended strategies to facilitating autonomous initiatives.
This requires the acceptance of organizational goals by a majority of its members, and their will-
ingness to exert effort towards accomplishing them.28 Games serve as vehicles to develop realistic,
mature and well-grounded commitment. They help individual actors engaged in a strategy to un-
derstand the problem, see the relevance of a new course of action, understand their roles in the mas-
ter plan, and feel confident that their old or recently acquired skills will help them to conquer the
obstacles or seize the opportunities ahead.

Strategic change needs ‘champions’ to keep the process alive

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.

Table 6. How policy gaming stimulates commitment to action

Effective ingredient Effective ingredient Impact of each effective


of the Simulation of the Gaming ingredient on Strategy
element in Policy element in Policy
Gaming Gaming

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

Long Range Planning, vol 40 2007 551


Conclusion
We set out to document and interpret the contribution policy gaming has for managing strategic
issues. Our analysis of the theory and practice of policy gaming has identified as its unique features
the ability to combine the rigor of systems analytical and simulation techniques with the creativity
of collective scenario building and the communicative power of role-play. The analysis of our eight
cases yielded five categories of functions of policy gaming for strategy development. Empirical and
theoretical writers on organization and strategy have underlined these ‘5 Cs’ as hard to realize but
fundamental functional elements of good strategy processes. The combination of simulation with
role-playing has proved to be able to offer to the strategist several ‘effective ingredients’ or ‘relevant
mechanisms’ that realize one or more of the five criteria within the actual gaming process. Each of
the five Cs has several ‘anchor-points’ in each phase of the gaming process, and the resulting impact
on the five criteria is reached step by step when progressing through the gaming project.
The power of games is that they organize and convey a holistic perspective on a given problem in
a format that allows the direct translation of these insights into strategic action. At the same time,
games help to develop new knowledge because they allow a broad range of participants to exper-
iment with previously untested behaviour and strategy. Policy games are safe environments to test
strategies in advance, and can help decision-makers to create several possible futures. The players
build the future conditions of the system step by step by moving from the current reality to a new
vision. In the debriefings, participants ‘look back’ from those futures.
Policy gaming is more than merely participating in the actual policy game. The experiences in the eight
projects and the research following them have made us reinterpret the nature of the enterprise that a client
organization adopts when it embarks on a gaming project. To the client, this process is not game design,
but a process of interactive and systematic strategy development. The actual run of the policy game is only
one - albeit important and highly visible - step in this collective process of inquiry and communication.
The gaming process is an interactive and sequential process which helps sharpen the problem statement
and the specific objectives to be achieved, and important interim results are produced as the client orga-
nization is guided through a series of collective inquiries and communication activities.
Empirical research supports the idea that for certain turbulent environments, an interactive form
of strategy making is most desirable. This research also suggests that the internalisation of such
a form of strategy making is a strategic (i.e. competitive) competence for an organization, especially
when combined with the skill to alternate between process styles.29

policy gaming is a versatile method for eliciting a shared vision in


confusing, exceptional and urgent situations, where precedent is of
little value

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

552 Policy Gaming for Strategy and Change


probably will surprise even the current specialists. The modern high-tech entertainment games with
their virtual reality and their worldwide participation and dialogue (via the internet) suggest one
source from which the new generation of tools for the ‘language of complexity’ might emerge.
We are certainly not Orwellian in believing in or aspiring to a surprise-free future - it is a techno-
cratic illusion to think that any process or technique will provide a policy maker with a mythical crys-
tal ball. Preparing for the future is a managerial responsibility: knowing the future is not. Decision
quality is an ethical aspiration: those who take or assist in decisions need to be able to say, without
doubt or remorse, ‘We took the best decision we possibly could and we did everything in our power to
prepare for its successful implementation.’31 Gaming/simulation techniques hold considerable promise
for improving decision quality, and it seems worthwhile for an organization that has used this process
satisfactorily once to install the skills and procedures to make policy gaming a lasting part of its stra-
tegic repertoire. We end this article, as we started it, by repeating D€
orner’s stimulating observation:

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).

Strategizing in a University Hospital


Some eight years ago, a very successful University Hospital had introduced a new organization struc-
ture. Within the eleven newly created divisions the managers proved to be successful in managing their
own operations and staying within their budgets. The idea of the professionals being in the lead as-
sumed that the division managers would be willing and able to balance divisional and general hospital
interests. This proved to be a problem. Maybe the innovation had been too successful. Nobody seemed
to feel responsible for the hospital as a whole. The policy exercise was designed and played within the
hospital organization. As a result of the evaluation, hospital management became more aware of these
problems and the exercise resulted in proposals for productive ways of making decisions that were vital
for collective success in the future.

Long Range Planning, vol 40 2007 553


Reorganizing the Office of the Secretary of Defense
In the mid-1980s, the Department of Defense (DOD) was facing budget cuts and reorganization.
Colin Powell, on assuming his job as Chair of the Joint Chiefs of Staff, elected to review the or-
ganization of the Office of the Secretary of Defense. The three major branches of service (Army,
Navy, and Air Force) produced and submitted plans reflecting their own vision. There was little
overlap among them. A policy exercise was created that allowed for a comparison of the three
proposals. Colin Powell was an observer of these runs. Each service had an opportunity to pres-
ent their plan through the policy exercise; after a further day of discussion, the exercise was again
used to negotiate a single compromise plan. This example shows how gaming can help force stra-
tegic decisions in a state of crisis and urgency. Although the project had very little time (less than
a month from inception to completion), the game format was simple and effective, and helped to
focus on the most important issues and criteria (e.g. by using role-play to bring in the outsider’s
perspectives).

Management Information in a Governmental Social Program


Policy gaming helped the Dutch National Social Employment Program (SEP) develop a strategic
Management Information System (MIS) that supported the introduction of a radically different
system of budget financing. The game (SWIFT) was primarily structured to force strategic deci-
sion-making through negotiated compromise. The SEP incorporated more than 200 social work-
places in which approximately 70,000 handicapped people worked. Operational assessment
techniques for these unique workplaces cannot be found in the literature. As a consequence, an as-
sessment system had to be created using the wisdom of as many internal experts as possible. The
policy exercise was run several times with representatives from all four echelons, and resulted in
proposals for several profound changes in the MIS. Recommendations from the game were the
building blocks underlying the white paper proposing an MIS reorganization plan to Parliament.
The actual reorganization started a year later.

Science policy for the Great Lakes Ecosystem


The Client for this project was the International Joint Commission (IJC) on the Great Lakes. A coop-
erative effort had been underway for many years to protect the Great Lakes of North America. Both
public and private agencies had focused their efforts on gaining a greater scientific understanding.
The IJC was established as a cooperative institution of the Canadian and United States governments,
responsible for recommending research policy. The IJC adopted an ecosystems approach to establish-
ing research priorities for the Great Lakes basin, which required a shared framework for discussing and
evaluating priorities necessitating an interdisciplinary science-policy dialogue that included both hu-
man and natural systems. In response, the IJC commissioned the development of a policy exercise to
develop research policies and communicate these to the appropriate stakeholders. The knowledge de-
rived is used to manage research, monitor resources, develop and interpret indicators, and, hopefully,
to change behaviors.

Cultural change within the Technical Components Industry


One of the big American automotive firms had elected to spin off a major component division as
a new entity. The belief was that, embedded in the parent company, the division was inefficient and
that once established as a free-standing firm, it would be able to compete directly with the other
major automotive suppliers. Management felt that it was essential to stimulate the growth of
a new corporate culture and to imbue each employee of the new company with a working knowl-
edge of this perspective. They elected to use a policy exercise because the structure of the new com-
pany differed dramatically from the parent company. Developing the exercise and training several
staff in its use constituted a major investment by the client. The primary goal was to support
a highly interactive learning process that would permit the group, through self-discovery, to iden-
tify new opportunities to learn and to practice new skills. The client is using the policy exercise to
train all their employees about business practices. To date, several thousand employees have been

554 Policy Gaming for Strategy and Change


through this three-day exercise, and ultimately, all employees will have the opportunity to
participate.

Restructuring a National Health Care System


In the middle of Mrs. Margaret Thatcher’s ‘reign,’ she presented drastic proposals to bring market
mechanisms into the UK’s national health system. However, in the city of Cambridge some forty
managers, clinical staff and policy-makers who were actually involved in adopting the changes
were worried. These prominent, well informed people were familiar with the regional health care
system and they foresaw possible problems.
For three days in a row, they engaged in a simulation that dealt with health care in two districts.
They negotiated and concluded contracts, all under the proposed new system. The results were dis-
astrous. The market collapsed, and neither the efficiency nor effectiveness of care improved. Partic-
ipants and commentators became convinced of the realism of the simulation: that what happened
in the session would also occur in practice. The results of this project drew a lot of attention both
regionally and nationally. When the game was still under development, some voices in politics and
the media referred cynically to ‘those war games in Cambridgeshire.’ But after it was completed, the
simulation results were urgently sought by 10 Downing Street via motor courier and questions were
put forward in the British parliament. At the time of writing (2007), there is an initiative underway
to repeat this project.32

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distinguished from free role-playing; it is true that roles form a part of the simulation, but a gaming/sim-
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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

Long Range Planning, vol 40 2007 555


non-standardized symbols. Computer models are quite often a part of a policy game. For an erudite dis-
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6. For a full research report see: R. D. Duke and J. L. A., Geurts, op. cit at Ref 4 and also: L. I. A. de Caluwé,
Veranderen moet je leren, Ph.D. thesis, Tilburg University, The Hague: Delwel Publishers (in Dutch),
(1997); C. Procter, Ph.D. thesis University of Michigan School of Architecture, The Use of Community-
based Planning and the Policy Exercise to Build Organizational Learning Capability (date??) A. M .E. Roe-
lofs, Structuring Policy Issues: Testing a Mapping Technique with Gaming-Simulation, Ph.D. thesis, Tilburg
University (2000).
7. R. K. Massie, Peter the Great: His Life and his World, Wings Book, New York (1991).
8. See about past and modern war games: A. W. von Aretin, Strategonon, Versuch die Kriegsführung Durch ein
Spiel Darzustellen, Dollfusz Ansbach, (1830) (in German); J. Meckel, Studien über das Kriegsspiel, Ernst
Siegfried Mittler und Sohn, Berlin, (1873) (in German); M. Shubik, Games for Society, Business and War,
Elsevier, New York and Amsterdam (1975); G. D. Brewer and M. Shubik, The War Game, a Critique of Mil-
itary Problem Solving, Harvard University Press, Cambridge (Mass) (1979); P. C. Boer and J. Soeters, Gam-
ing/simulation in the Dutch Armed Forces in: J. L. A. Geurts, F. Joldersma and A. Roelofs (eds.) op. cit at
Ref 4. The story about Van Riper can be found in Julian Borger: Wake-up Call in: The Guardian, 6 Sept 2006.
9. See R. D. Duke and J. L. A. Geurts op cit at Ref 4. The design process presented here can be clearly dis-
tinguished from that employed by many past applications of the gaming by its flexibility and sensitivity to
the problem at hand. The dichotomy of tailor-made versus off-the-shelf games may help to clarify the
distinction. The discipline of the policy exercise, as it emerged from the military and moved into fields
like management and urban planning, has produced a library of off-the-shelf policy games which are
used frequently and successfully in professional training programs and university courses worldwide. Be-
cause most of these games describe generalized or ideal-typical situations in non-existing organizations,
they have limited value as policy development tools. The policy issues that we have described in the ex-
amples are so unique that the policy exercises we build for them had to be client-specific.
10. Systems dynamics group modeling: J. A. M. Vennix, Group Modeling, John Wiley & Sons, Chichester
(1996); Scenario building: P. Schwartz, The Art of the Long View, Doubleday/Currency, New York
(1991); K. van der Heyden, Scenarios: The Art of Strategic Conversation, John Wiley and Sons, Chichester
(1996); Decision analysis: C. Spetzler, R. Arnold and J. Lang, Bringing decision quality to board decisions,
The Corporate Board (January/February, 2005). Strategic ‘journey’ designs: C. Eden and F. Ackermann,
Making Strategy: the Journey of Strategic Management, Sage, London (1997); Consensual approaches:
L. Susskind and J. Cruikshank, Breaking the Impasse: Consensual Approaches to Resolving Public Dispute,
Basic Books, New York (1987).
11. R. D. Duke, A Paradigm for game design, Simulation and Games 11, 364e377 (1980); R. D. Duke and
J. L. A. Geurts op. cit. at Ref 4.
12. J. Rosenhead (ed.), Rational Analysis for a Problematic World: Problem Structuring Methods for Complexity,
Uncertainty and Conflict, John Wiley & Sons, Chichester (1989); K. F. Watt, Why Won’t Anyone Believe Us?,
Simulation 23(1), 1e3 (1977).
13. Rosenhead, op cit above and also: C. Eden, S. Jones and D. Sims, Messing About in Problems, Pergamon Press,
Oxford and New York (1983); P. Checkland, Systems Thinking, Systems Practice, Wiley, Chichester UK (1988).
14. A. Rip, Risicocontroverses en Verwevenheden van Wetenschap en Politiek, Kennis en Methode, 63e80,
(1991) (in Dutch); J. M. Mezias, P. Grinyer and W. D. Guth, Changing collective cognition: a process
model for strategic change, Long Range Planning 34, 71e95 (2001); C. A. Bartlett and S. Ghoshal, Chang-
ing the role of top management: beyond strategy to purpose, Harvard Business Review 72(6), 79e88
(1994).
15. J. D. W. Morecroft, Systems dynamics and microworlds for policymakers, European Journal for Opera-
tional Research 35, 301e320 (1988); J. A. M. Vennix, Group Modeling, John Wiley & Sons, Chichester
(1996); D. C. Lane, On a resurgence of management simulations and games, Journal of the Operational
Research Society 46, 604e625 (1995); D. L. Meadows, Gaming to implement system dynamics models,

556 Policy Gaming for Strategy and Change


in P. M. Milling and E. O. K Zahn (eds), Computer-Based Management of Complex Systems, Springer Ver-
lag, Berlin, 635e640 (1989).
16. R. D. Duke, Gaming, the Future’s Language, Sage, Beverly Hills/London (1974); D. N. Michael, On Learn-
ing to Plan and Planning to Learn, Jossey-Bass, San Francisco (1973); J. Campbell, Grammatical Man:
Information, Entropy, Language and Life, Simon & Schuster, New York (1982).
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3; N. Collier, F. Fishwick and S. W. Floyd, Managerial involvement and perceptions of strategy process,
Long Range Planning 37, 67e83 (2004); L. Rouleau, Micro-practices of strategic sensemaking and sense-
giving: how middle managers interpret and sell change every day, Journal of Management Studies 42(7),
1413e1442 (2005); F. R. Westley, Middle managers and strategy: micro dynamics of inclusion, Strategic
Management Journal 11(5), 337e351 (1990).
18. J. Huizinga, Homo Ludens: A Study of the Play-Element in Culture, Beacon Press, Boston (1938).
19. See note 3 above. Also: C. Andriopoulos, Six Paradoxes in managing creativity: an Embracing Act, Long
Range Planning 36(4), 375e388 (2003).
20. S. Isaksen and D. J. Treffinger, Creative Problem Solving: the Basic Course, Bearly Ltd, Buffalo (1986);
T. M. Amabile, Motivating creativity in organizations: on doing what you love and loving what you
do, California Management Review 40(1), 39e58 (1997); T. M. Amabile, How to kill creativity, Harvard
Business Review 76(5), 76e87 (1998); L. Thompson and L. F. Brajkovich, Improving the creativity of
Organizational Work Groups, Academy of Management Executive 17(1), 96e100 (2003).
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The Theory of Economic Development, Oxford University Press, London (1934); Instead of ‘craft’,
D€ orner (op. cit. at Ref 1) uses the term operative intelligence; Weick calls it bricolage and mindfulness
see: D. L. Coutu, Sense and reliability: a conversation with celebrated psychologist Karl E. Weick, Harvard
Business 84e90 (April 2003); K. E. Weick, The collapse of sense making in organizations: the Mann Gulch
Disaster, Administrative Science Quarterly 38(4) (1993).
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wood Cliffs, NJ (1991); D. C. Lane, op. cit at Ref 15. Argyris and Schon (1978, 27) introduce the concept
of second order or deutero learning. In other publications one finds a distinction between single-loop and
double-loop learning. Characteristic of single-loop learning is learning by doing. Improved responses to
a problematic situation develop out of the accumulation of positive and negative experiences. Double-
loop learning happens when one reflects on and changes one’s style of learning and when one innovates
his repertoire of responses to deal with a perplexing situation.
23. A. de Geus, Planning as learning, Harvard Business Review, 70e74 (March-April, 1988); also: P. M. Senge,
The Fifth Discipline: The Art and Practice of the Learning Organization, Doubleday/Currency, New York
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24. See for example: W. F. Whyte, Street Corner Society: The Social Structure of an Italian Slum, The University
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(1994); H. B. Schwartzman, The anthropological study of children’s play, Annual Review of Anthropology
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28. A. Blatner and T. Dayton, both op.cit. at Ref 27.
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decision making process via participant recall: a free simulation examination, Journal of Management
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32. A. Liddell and L. McMahon, Return to the Windmill - Behavioral Modeling and the future, Health Services
Journal (April 2006).

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

558 Policy Gaming for Strategy and Change