Before the Market Red-Teams You: Why War Games Are Back in the Boardroom
Photo: business executives around conference table strategy war game simulation, via www.acrasio.com
For most of the past two decades, scenario exercises occupied a strange position in corporate America: universally praised in retrospect, rarely scheduled in advance. That is changing. Across sectors—from regional banks in Charlotte to healthcare systems in the Twin Cities—executive teams are resurrecting red teaming, the practice of assigning a group to attack your own strategy with the rigor of a committed adversary.
The catalyst is not nostalgia for Cold War-era planning doctrine. It is velocity. When disruption arrived on a five-year horizon, the cost of being wrong was amortized over many quarters. With generative AI compressing product cycles and lowering barriers to entry, the cost of an unexamined strategic assumption is now measured in months.
Why the Practice Died—and Why It's Reviving
Red teaming faded from corporate favor for reasons familiar to anyone who has watched a strategy function atrophy. Exercises were expensive, often outsourced, and frequently produced impressive binders that changed nothing. Worse, in bull markets, the penalty for untested assumptions was low. Why war-game when the tide lifts everyone?
The revival differs in three ways. First, it is cheaper: the analytical scaffolding that once required external consultancies can now be assembled internally. Second, the stakes are higher—AI-driven entrants can reach revenue-relevant scale before incumbents finish their annual planning cycle. Third, boards are asking. Directors who lived through 2020's supply-chain shocks have developed an appetite for evidence that management has stress-tested its plan, not merely presented it.
What Red Teaming Actually Is (and Isn't)
A proper red team is not a devil's advocate with a title. It is a structured exercise with assigned roles, real incentives, and a mandate to win. The red team's job is to identify the fastest, cheapest path to putting your strategy out of business—and to be scored on how convincing the attack is, not on how polite it is.
The most common failure mode is cosmetic participation: executives assigned to the red team who soften their attacks to preserve relationships. Institutions that get value from these exercises solve this structurally. Some rotate the red team role so that everyone takes a turn as the adversary. Others score attacks on specificity—'pricing is too high' fails; 'a well-funded entrant could bundle your top three features at 40% of your price point within 18 months' passes.
A Starter War Game for Under $5,000
You do not need a consultant to run your first exercise. A workable format fits into two half-day sessions:
Session one—brief and task. Present the current strategy to the full leadership team in under an hour: objectives, key bets, resource allocation, and the assumptions underneath each bet. Then split the group. One team defends the plan. The other becomes the adversary—typically a hypothetical competitor or a technological force—with a single objective: render the strategy irrelevant within three years.
Session two—attack and adjudicate. The red team presents its attack: the moves it would make, the assumptions it would exploit, the sequence it would follow. The defense responds. A neutral adjudicator—often a board member or a respected executive from an adjacent business unit—scores which vulnerabilities were most plausible and least addressed.
The output is not a report. It is a short list of assumptions that survived scrutiny and a short list that did not. The second list is where your next planning cycle should begin.
The Discipline That Makes It Work
Two rules separate productive war games from theater. First, no status protection: the exercise must be safe for the red team to genuinely attack, which usually requires the CEO to state explicitly that finding flaws is the assignment, not a career risk. Second, follow-through: every assumption invalidated in the exercise should be assigned an owner and a review date before the room empties. An attack that produces no change to monitoring, resourcing, or triggers was entertainment, not strategy.
The military understood something corporate America is rediscovering: the cheapest place to lose a battle is in a simulation. As the pace of AI-driven change continues to accelerate, the question is no longer whether your strategy will be stress-tested. It is whether you will run the test, or wait for a competitor to run it for you.
