Gaming your way to resiliency, climate risk planning
As global temperatures rise, the sea level along much of the West is expected to reach 1 foot higher by 2020. But which of your distribution centers might be the most vulnerable, the one in Los Angeles or in Seattle?
Heat waves are likely to sweep through key agricultural sourcing regions, curtailing harvests of some crops. Some farmers might give up growing those commodities. Should you switch ingredients now or wait?
Water scarcity in India could mean trouble at a certain manufacturing OEM. What should you do?
As climate change continues and its manifestations spread, corporate sustainability is moving into core business operations and profit and loss decision making.
Yet decisions based on climate risk assessments are new for many companies, and the uncertainties in the forecasts make the process all the more complex. Cities also are finding they need to plan for resiliency in the face of climate change — as Hurricane Sandy and Katrina demonstrated.
So one climate consulting firm sees this new decision making paradigm as ripe for gamification.
In its Climate Wargame, consultancy Four Twenty Seven aims to give players a taste of the complex decision-making and risks assessments that climate change is forcing upon companies, cities and organizations. They're targeting teams executives who plan business operations and city managers who plan logistics and infrastructure.
“War games are considered a good way to get people to think about situations with uncertainty and where they need to think outside of box,” said Four Twenty Seven Founder and CEO Emilie Mazzacurati.
They simulate “what it means to make decisions under conditions of uncertainty,” she said.
(Try Four Twenty Seven ’s Climate Wargames on day one of VERGE in San Jose, the Oct. 26 to 29.)
In game play, Four Twenty Seven equips each team — groups of people from the same company, city or organization — with data on the types of climate change risks that a geographic region is exposed to, information on the sensitivities of various types of operations, i.e., manufacturing, mining, agriculture, and a scenario of a business.
Then players go into “planning mode,” and begin doing cost-benefit analyses in order to make decisions on what risks to protect against and which to bet won't happen. “They have to consider tradeoffs for risks profile and which part of their facilities they want to protect,” Mazzacurati said.
Players are also provided with a possible adaptation measures they might consider. And they are left to imagine what opportunities they might seize — innovations to adapt and help others adapt to those changes. The teams make decisions, weigh risks, calculate costs and forecast probabilities, the way businesses make decisions.
Then, however, they roll a couple of dice — a.k.a. experience Mother Nature’s fickle wrath or largesse and the uncertainties of climate change.
“And they have to live with the decisions,” Mazzacurati said.
The object of the game is that ultimate business driver — making money. Whoever has the most money in the end wins.
But, as in life or in real business, players might bypass an opportunity and lose out, or they might underestimate a risk and similarly lose. Or they might make what later prove to wise and prescient choices.
MBA students in the University of California at Davis MBA program, where Mazzacurati teaches, played the game in her class this past summer.
Student Laurel Fedor, a political consultant in Sacrament who expects to go into finance and social impact investing, said her team learned the hard way.
"it was a critical thinking game that made you think about what you would do in a real world situation," she said, calling it "very valuable." Students in the class "very publicly aired strategy that later (proves to) works fine or it doesn’t,” Fedor said. The group of business students got very competitive about winning.
“The first thing we (her team) did was add up all the numbers; we built a matrix on probabilities of something happening (to various facilities) and the costs to protect facilities,” she said.
“Our group was doing fine until we decided we didn't want to insure our smallest business operation, a call center, thinking the probability that something happening to this small business segment was small,” she said. But it was completely flooded, and that changed their winning streak. Upon discussion, the exercise brought home another reality: “It was easy to just pencil out that it was not worth the money,” Fedor said, “but in the real world, if you think about it, there would be people involved, a community,” at that call center.
Asked how she might use her Climate Wargame stint, Fedor said she could imagine that the gaming experience “would be a good talking point,” for meeting with clients. “If I was sitting around talking with a group of executives, an opening line might be ‘I did this simulation one time and here were the revelations that came out of it,’” she said.
Do Games Work and Why?
Gabe Zichermann, founder and CEO of the Gamification Co., told GreenBiz Forum last year that gaming works because it excites people and compels them to participate. "The best ideas often fail because they don't get buy-in and participation from the end user," he said.
Gartner Group estimates that 50 percent of companies that innovate use gaming in the innovation process. However, Gartner also found that 80 percent of business gaming applications fail to meet their business objective.
In the sustainability field, gaming has often been used to engage consumers or employees in a particular action, like recycling.
But gaming has not typically been a method used to get C-suite decision makers to think about sustainability. But maybe it's time.
"People just get in a different mental stage when play a game. It has been shown to be a positive learning mode — because it brings more engagement by the principals," Mazzacurati said.
If nothing else, "It creates a story that participants can go back with. People don’t talk about climate change, so we think this is a powerful tool around climate change conversation and around coalition building," she said. "You can bring in your team from supply chain and finance and bring it to the C-Suite to get them thinking about climate change and the future."