The VP for marketing is making plans for a big advertising blitz in the third quarter to introduce a “new and improved” camera in time for the Christmas sales season when she is reminded by the VP for production that they won’t actually have the new product until January. They did not begin funding the research and development process early enough to have a new product actually in production before then. When she protests to the CEO that the competition is going to take away their market share, he acknowledges that this is a problem, but reminds her that they were in difficult financial situation in the first quarter and that the whole team had agreed to hold off on new investments. She can protest, but that is the situation.
A meeting of the executive committee of a major corporation? Could be, but in this case it is a team engaged in a business strategy simulation. Simulations have become increasingly complex and realistic in the last few years. They have also become increasingly popular, both in universities and in corporate training settings. A study done in the late 1990’s found that over 98% of the business schools accredited by the Association to Advance Collegiate Schools of Business used at least one simulation in their programs and over 60% of large businesses use them in their training programs. There is good reason for this. Research over the past twenty-five years has consistently shown that students have more positive attitudes toward learning from a business game than from other teaching approaches. (Faria, 2001). This is true of business people as well as students.
Most businesses and universities use commercially-produced computer-assisted simulations, although some are choosing to create their own to reflect their business and industry more closely. Building one’s own is a very costly enterprise and requires extremely sophisticated programming if it is to be done well, and most businesses will prefer to use existing products. There are many very good ones, and they range from fairly basic simulations specific to a functional area to total enterprise games in which teams are responsible for managing a complete company in a complex world.
Not all simulation experiences are equally effective, however. Not only do the games themselves differ, but how well the participants learn what the simulation is designed to teach can vary widely even when the same game is used. Given the expense and effort involved in using a simulation as a teaching device, it is important to understand what enhances the learning experience. Otherwise, a simulation can be a waste of significant time and financial resources.
Consider These Success Factors
Based on the research noted above, plus research on simulations with which I have been involved and my experience in running total enterprise simulations in a business environment, the following principles are very important if you want to have a successful business simulation. (The context of the discussion here is the business environment, but the principles apply to classroom simulations as well.)
- More cohesive teams perform better than less cohesive teams.
- The greater the support and commitment to the simulation of those in positions of influence within the class or the company, the greater the commitment of those in the game, and the better the learning experience that it is.
- The greater the commitment and involvement of the simulation leader, the better the student/participant performance.
- When participants are confident that they understand the mechanics of how the game is played, they will put more effort into playing it and will consider it more important to do well. This, in turn, increases the likelihood that they and their team will be effective and the likelihood that they will learn what the game is designed to teach.
- It is important to have a debriefing session.
Let’s look at each of these in more detail.
Encourage Group Cohesion
Studies of cohesion frequently divide the concept into two types: cohesion based on inter-personal attraction and cohesion based on complementary roles. Obviously some groups have both. Therefore, creating cohesive teams does not necessarily mean having players select their best friends as teammates. In fact, that would often work against complementary skill sets and might increase the likelihood of “groupthink.” But you might want to avoid putting people on the same team who have very different personal styles or who are truly antagonistic to each other unless you are planning to use the exercise primarily as a form of group therapy.
You may wish to bring together executives from different divisions of the company who do not even know each other, or choose people from different functional areas of the company who are only vaguely acquainted. That is fine. But do the assignments with some forethought about why you want these people to play this game and why you are putting together the particular teams that you are. Then, if teams are not already cohesive units, plan team-building activities and allow sufficient time for them to have an effect before you begin the actual simulation.
This will be more easily accomplished if your company already has a culture that encourages cooperation, trust, and an appreciation of the contributions of all people. If the company culture is one of great individual competition, mistrust, cynicism and/or backbiting, you probably are not going to have a successful simulation experience. But then, that is likely the least of your problems.
In one company where I was involved in running a simulation, the CEO sent out a list of core company values and examples of behaviors that exhibit these values to all game participants along with the game manual and other materials they received. These included values such as respecting the potential and significance of every individual, an expectation of a high level of personal commitment, active listening, and making decisions and taking risks together. It set a very positive tone.
Support from Above is Critical
This brings up the second key principle. Simulations are more effective as learning experiences when there is support from key supervisors. When you are dealing with executive-level participants, this means support from the President and/or CEO. When it is apparent that key supervisors are invested in this experience and believe that it is valuable, that message will be heard by participants. They, in turn, are more likely to make the effort to do well and to learn what the simulation is designed to teach. When the supervisor gives verbal assent but obviously does not understand what is really happening or how the simulation relates to the organization’s larger goals, it will be clear to participants that this really does not matter, so why should they try. There will be few rewards associated with performing well.
In one company that had a very successful business simulation, the CEO decided to bring in division presidents from all over the world to participate. He wanted them to have exposure to the kind of decisions that need to be made on a company-wide basis and believed that the game would be useful for this. He therefore made this a part of a semi-annual meeting where everyone would be in attendance. He personally studied the manual and made sure that he understood how it would operate, the educational goals, and the logistics. He arranged for an appropriate venue, made sure that all participants had the information they needed ahead of time, let them know that this was something he was supporting, and had a banquet for them after the simulation that served as a debriefing session. That level of involvement sent a message that encouraged participants to take this seriously and do their best.
The Impact of the Simulation Leader
In addition to support from those in supervisory positions, it is important that the person who actually runs the simulation is familiar with the game, its educational goals, and how using different scenarios (if available on that game) can affect play. It is also important to understand the system well enough that if it crashes for any reason, he or she can trouble-shoot the problem and get the simulation back on track. Even though computerized games are generally quite reliable, there can be glitches, either in the game software or in the installation on the network or other system. The simulation leader needs to understand the underlying software – or have someone with him or her who does.
Also, the simulation leader needs to be available, if at all possible, to answer questions ahead of time so that participants will be clear about expectations when they arrive. This can be handled by email and phone calls and even net meetings or chat room technology, but it will make a difference.
Several studies, including our own studies of adult MBA students, show that being confident that they understand how the game is to be played has a significant effect on whether or not participants learn what the simulations is designed to teach, whether that is to think strategically about an entire organization or to plan a marketing campaign or deal with some other function. Participants who are worried about the mechanics of entering decisions or reading reports do not concentrate on the educational purpose of the simulation. If it seems too complex, it will just be frustrating, and they may give up and basically quit trying.
Confidence will be enhanced when they have time and opportunity to study the written material – and providing time for this within the work environment rather than expecting them to do it on their own time – will certainly help. Again, having someone available to answer questions as they arise beforehand, builds confidence.
However, it is also helpful to allow them to make two or three trial decisions before the game actually begins. Actual experience significantly increases their confidence in their ability to handle the mechanics. It gives them an idea of how long it takes to do certain tasks and allows them to make initial mistakes without penalty. Once the actual game begins, they can then concentrate on the intended educational purpose. This does mean, however, building in enough time so that the trial decisions will not detract from the time needed for the actual simulation.
Finally, the research clearly supports the importance of having a real debriefing time where the participants can think back on what they did, why they did it, and what they learned from it about a variety of topics. With skillful guidance from the leader, who has been observing them in action, they should be able to evaluate not only what they learned about the topics the game is designed to teach, but about team work, preparation, personal and team work styles, etc. Ideally, participants should be asked about how they might transfer what they learned in this experience to other domains.
Many people have found that a written “reflection paper” where participants are required to make these assessments themselves is very helpful. It is this stage of the simulation where much of the payoff comes. The benefit will be commensurate with the thought that goes into planning this phase and with the degree of critical assessment that is required of the participants.
Business simulations can be one of the most effective learning tools available, not only for students in school, but for adult employees in business organizations. Education research supports the idea that experiential learning is one of the, if not THE, best way for humans to learn. Simulations are a form of experiential learning and they can engage the attention and involvement of participants in a way that few other training techniques are able to do.
However, they can also be costly, both in terms of time and energy as well as money. If you are thinking of doing a simulation experience for your employees, you want to be sure that you are getting your money’s worth. To accomplish this you need to remember the principles outlined above regarding cohesion, support, confidence and evaluation.
With these steps well in place you are on your way to providing a positive and valuable learning experience that will benefit not only the individuals involved but the organization as a whole.
 Faria, A. J. (1998). Business simulation games: Current usage leveles– and update. Simulation & Gaming 29, (3), p. 295-308.
 Faria, A. J. (2001). The changing nature of business simulations/gaming research: A brief history. Simulation & Gaming 32 (1) p. 97 – 110
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