21 April 2009
Business Simulation Comes of Age
By Mark Burley Head of Consulting Practice, Morgan Clarke
Business Simulations have been around in various guises for many years, but recent research has begun to shed light on how this training staple can be used to bring about both swift and lasting behavioural change.
In this article we reflect on our 12 years plus experience of designing, developing and facilitating business simulation programmes of all kinds to consider the circumstances that contribute to the success of a business simulation exercise and move it from being not just a fun activity to a lasting and powerful learning experience.
Few business graduates can have avoided the inevitable business game during their studies. These simulations, whilst illustrating the links between financial statements and generic value drivers, inevitably generate more excitement through their competitive nature than real learning. The challenge has been to retain the excitement and enthusiasm that a business simulation can create, whilst adding learning methodology that ensures that the exercise achieves more than just being an “enjoyable event”.
Lesson: Too much focus on competition teaches little. In many cases the winner is unable to explain what they actually did to win and the other competitors unable to explain how they could have performed better.
Business simulations are often used as a “stand alone” activity without any additional input. Such an approach misses many of the opportunities to be had from grounding the simulation within the “learning cycle” (for example Kolb (1984) Experiential Learning Cycle). By understanding different learning preferences and linking these with the delivery and facilitation of a simulation a much more inclusive activity can be delivered that really plays to the potential strengths of the simulation concept. An important element in this approach must be to allow participants sufficient time to reflect on their experiences within the simulation, rather than rushing into the next round or activity.
In many simulation workshops, the simulation is clearly the star, with facilitation limited to little more than monitoring the simulation process. A well designed business simulation can challenge participants and encourage good debate and decision taking. However, unless the simulation is built into a “learning cycle” participants can not fully reflect on their discussion and the impact of their decisions. A repeated cycle of planning, decision making, feedback reflection and discussion provides a valuable opportunity for participants to gain experience from their participation.
Lesson: Learning is not an accident. It is a process where attention must be paid to every step IF you are to get the potential returns on offer.
Be very wary of business simulations that draw on the latest technology. To be successful a business simulation should be based on self discovery, i.e. the participant should be free to explore and make their own discoveries from the simulation. Some simulations are so clever that all you need to do is “hit the button” and the simulation does the rest. This clearly misses the point and such programmes are clearly game rather than learning orientated.
Lesson: Technology is great but it’s the participant who should do the processing not the computer.
Whilst technology can be very captivating, the golden rule in simulation is always to make things as straight forward and simple as possible. The role of a good simulation is to allow the user to gain a specific experience, the more abstract and remote that this experience is made, the weaker the impact. Whilst it is important to make a simulation as close to reality as possible, hiding the purpose of the simulation in this accuracy makes no sense. For example if you want to illustrate the interdependencies that exist between two business functions, adding additional functions might mirror the real structure of the business, but probably at the expense of making the simulation unnecessarily complex.
Lesson: More is more, not better. The more precise your simulation modelling, the more direct the experience and learning potential.
If you really want people to apply the insights gained from a business simulation exercise back to their business, then it is important that the experience should be transferable. This means making the experience both relevant and realistic.
The recent successful and dramatic rescue of passengers on an airliner which landed on the Hudson river in New York by pilot Chesley Sullenberger was largely due to his cool and calm approach to the potential disaster as it unfolded. In interview Sullenberger has said that he was not panicked by the event as he “knew” what to do. How could this be? How can a pilot possibly know what to do if their plane suffers a double bird strike, leading to a catastrophic power failure and a forced landing on the Hudson river? As you might expect, Sullenberger knew what to do in these unusual circumstances as he had previously invested hours in a flight simulator practising for just such an emergency. Business simulation should offer business executives the same confidence of “knowing what to do” in demanding circumstances. Flight simulators work because their level of realism is so great that pilots can gain experience that is readily transferable to a real situation.
Lesson: A good simulation can give confidence to leaders and senior managers when faced with difficult decisions. However, to really achieve this, a simulation must reflect the business circumstances that would allow the application of that experience.
Morgan Clarke view Business Simulation as a valuable approach for companies who are looking to respond to the challenges of the current market. Business Simulation can underpin approaches to maximising opportunities, supporting better team working and improving the numbers.
If you have any questions on this article, or would like to discuss the application of business simulation with us, please contact Mark Burley on 01306 621600 or mark.burley@morgan-clarke.co.uk
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