The Wargame v The Boardroom

I don’t know how many of you saw Sky’s excellent production, “The Wargame”, over the last week or so. If you missed it, I would highly recommend that you find it and watch it. Uplifting entertainment it most certainly isn’t but compulsive viewing it most certainly is.

I won’t do a spoiler for you however the basic premise was simple. Sky gathered together a bunch of former senior politicians, advisers and members of the armed forces. They took on senior roles (Prime Minister, Foreign Secretary, Chief of the Defence Staff etc) with which they were familiar, sat around the table and were provided inputs from the producers relating to an evolving crisis with Russia. They had no knowledge of the inputs at the start, merely that they would be handling a crisis. The filming captured their immediate responses and how they worked together to try to come up with a path out of the increasingly difficult situation the country was facing.

In the post exercise debrief, they admitted how absorbing the whole exercise was and how it started to become “real” as they got further into it. If nothing else, an interesting psychological exercise.

How, you may ask, does this relate to the other part of this article’s title, “The Boardroom”?

There is an expectation from both the PRA and the FCA that firms in scope of the Operational Resilience rules and increasingly, those outside the scope of the rules, should be running “Severe but Plausible” scenario tests on a regular basis. They should be testing their ability to continue to provide their services to their customers when under extreme operational stress, and to do so in such a way that market confidence in the UK Financial Services sector is not harmed.

“Severe” is an interesting word in this context. At Aldbury International, we see on a regular (frankly, scarily regular) basis, test scenarios being run that do not involve the Crisis Management Team. It is quite acceptable and sensible to run lower level testing that challenges the resilience of localised parts of a firm but what we are seeing is that the testing frequently never goes beyond that. Crisis Management (or Incident Response) Teams are sometimes trained but all too frequently, have never once been involved in a test. This simply means that the scenarios being tested are not severe enough to involve the CMT and therefore do not match the criteria required by regulators. Putting it very simply, a “crisis” that can be dealt with by a mid-level manager or even the COO alone, is not putting the firm under the level of stress required.

Virtually all the participants in “The Wargame” had been involved in COBRA meetings during their professional careers but even they were finding the situation difficult to handle. Without that experience, the result would have been a total shambles.

Aldbury International’s concern is that the shambles could occur in a regulated business. It was also notable that during “The Wargame” there was a very high level of credence given to effectively communicating with the outside world, not just internalising the issues. This, along with the absence of CMT involvement is something that Aldbury frequently finds when either conducting or just observing tests for firms.

We do not work with the same budgets as Sky when helping firms with testing, but we are able to recreate the pressure and the “real” feeling that was evident in the television programmes. This doesn’t come by accident, it comes by practice. Aldbury has run many tests for firms over the last few years and it is telling that we are frequently asked back to do them again – creating muscle memory in the CMT as well as spreading the knowledge wider by running 2^nd XI tests (the clue is in the name).

We are also frequently being asked to run far more complex scenarios than in the past. Crises in firms with global operations can start in one part of the world and spread out – following the sun. These are more difficult, communication is harder, time zones become a factor (irrespective of what shiny websites says about this issue) and tiredness plays a part.

Aldbury appreciates that this level of testing is not easy to organise. If, as an employee, you devise a test that puts senior managers or the Board under pressure, are they going to thank you? Who decides your bonus? It’s all a little bit to human for comfort.

Asking Aldbury to run a test provides a degree of plausible deniability and we also have the experience to ensure that however challenging the test, individuals leave it thinking they had a useful experience and learned something that will help. This is as valuable for the CEO as it is for the intern running in and out of a conference room taking messages.

Speak to us and find out how we can help you – and I would urge you to take a look at Sky’s production.