Business Simulation Comes of Age

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 swift and lasting behavioural change.

In this article we reflect on over 15 years’ 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 and engaging 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 at Morgan Clarke has been to retain the excitement and enthusiasm that a business simulation can create, whilst adding learning method that ensures the approach achieves more than just being an “enjoyable event”.

Lesson:  Too much focus on competition teaches little.  In too many cases the winner is unable to explain what they actually did to win and the other competitors are unable to explain how they could have performed better.

Business simulations are often used as a stand-alone activity.  Such an approach misses many of the opportunities to be had from grounding the simulation fully within the “learning cycle”.  By understanding different learning style 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.  For example, participants must be allowed sufficient time to reflect on their experiences within the simulation, rather than just rushing into the next decision 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 will challenge participants and encourage good debate and decision taking.  However, unless the learning experience is built into the “learning cycle”, participants do not fully reflect on their team discussions 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 in the exercise.

Lesson:  Learning should not occur by accident.  Better it is a process where attention is paid at every step to ensure you get the best potential returns.

Be 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 a valuable enabler, but it’s the participant who should do the processing, not a 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 the name of accuracy makes no sense.  For example if you want to illustrate the interdependencies that exist between two business functions (e.g. Sales and Operations), adding additional functions might mirror the real structure of the business, but perhaps at the expense of making the simulation unnecessarily complex.

Lesson:  More is more, not necessarily better.  The more precision in 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 workshop back at their business, then it is important that the learning should be transferable.  This means making the experience both realistic, and relevant to the participants’ real world.

The celebrated successful and dramatic rescue of passengers from 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 nearest 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 views Business Simulation as a valuable approach for clients who are looking to respond to the challenges of the Current market.  Business Simulation can underpin approaches to maximising opportunities, supporting better collaboration and team working and improving the numbers.

If you have any questions arising from this article, or would like to discuss the application of business simulation with us, please contact Mark Burley on 01306 621600 or [email protected].

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