The most common way of using a business simulation is as the ending session on the course.
When I was involved in actually running business simulations for clients I literally used them in this manner several hundred times and this page explains why clients used them this way and the issues that I encountered when using them.
Reasons for Use
Practical Issues with use
Suitable Business Simulations
INTEGRATING THE COURSE
The typical general management programme consists of several different sessions covering different business topics and management skills. Except for the most basic business appreciation course, different subject specialists present these sessions. Yet, a key general management development need is to understand the whole business. A general management simulation covering finance, marketing and operations with its team working, planning and strategic management bias integrates all these course sessions.
EXPLORE DYNAMIC INTERACTIONS
Besides integrating subjects the use of the simulation demonstrates the complexity of business in terms of the dynamic interactions between functions, products and markets. For instance, although price changes may have an immediate effect on sales, promotional changes will not. Increasing growth may or may not effect profitability depending on the relationships between fixed and variable costs and capital. Increasing profits may be attractive but may not be viable because of liquidity. All these and other interactions can be described but, until faced with "real" problems, the implications often do not register.
REVISE, REVIEW & REINFORCE
The time pressure and mix of delegates on a course often means that participants believe that they understand a topic when, in actuality, they do not. For instance a financial exercise (such as Financial Analysis) at the end of a financial appreciation course or at the end of the finance module on a general management programme serves to identify "gaps" in the executives financial understanding. Often, one discovers that participants do not fully understand profitability and liquidity and, faced with a high level of capital gearing (leverage), not only do not understand the implications in terms of bankruptcy risk nor what actions are needed to correct.
ACTING AS ENDING "EXAM"
Unlike academic programmes where it is normal to examine students this is unreasonable on executive short courses. The "practical" nature of the simulation allows the tutor to assess participant knowledge. (Simulations are a powerful tool when used in Assessment Centres.) This parallels the revise, review and reinforce purposes but for the benefit of the course director. (The simulation tutor soon discovers which of the earlier course sessions were effective and which were not!)
STIMULATING AND EXCITING
Executives, especially successful ones, are action oriented as anyone who has "lectured" to a group will appreciate. The practical and participative nature of the simulation is synergistic. As a result, even after a long course where the normal working day is from 8:30 am to 10:30 pm, executives will enthusiastically take part in the simulation. Once, after briefing a group after dinner, four groups worked until 2.30 am, a further group until 4.30am and the final group, in shifts, all night. It is advisable to define firmly when you, as tutor, will be available and, if possible, keep you room secret!
It is desirable for executives to leave a short course with a feeling of well being. As paying customers they will demand value for money. Therefore, all sessions, especially the last one must be satisfying. Simulations are this. However, this is a two edged sword. On several occasions, where individual sessions have been less than desired, a simulation as "saved" the day (I shall not cite instances). Equally, a badly managed simulation, one that is too complex or too simple or does not address the course content can be disastrous.
To integrate the course the chosen simulation must match the course learning objectives. The simulation tutor needs to know both the content and the learning provided by the earlier sessions.
The very fact that the session revises, reviews and reinforces preceding sessions and acts as an ending exam means that weaknesses in previous sessions and participants' knowledge are identified. This provides an opportunity for correction but also places a burden on the tutor. He or she may need wide ranging business knowledge if remedial work is to be done successfully and is perceived as such.
Participants may view the simulation as a "game" rather than a learning experience. This is especially likely if earlier sessions have been unsatisfactory. During the briefing the tutor should emphasise the student directed perspective of the simulation. It should be emphasised that it will not be possible to make perfect decisions. The simulation provides an opportunity to test understanding and organise knowledge in a "risk free" environment. Often, participating is an emotional experience. Therefore, team formation should allow for any problematical course members.
Teams should be balanced in terms of knowledge, functional experience and personality. Perhaps the most important is functional experience. If teams perceive they lack the necessary functional skills they will be demotivated. This is despite, for instance, marketing and financial content was fully covered by the course. There are several psychological instruments that help team formation that may have been used on earlier course sessions. However, experience suggests, especially on in-company courses, that there may not be a sufficient range of psychological styles for this to be useful.
Depending on the simulation, team sizes should be between four and five. Below four the workload will be too great. Above fivex team-working may be chaotic and individuals may dissociate themselves from the rest of the group. However, if the simulation is run with learners who speak a range of languages, it may be attractive ti increase the team size slightly. If the simulation is interactive there should be three or more teams to ensure a reasonable level of interaction. (If there are only two teams the tutor can always run a dummy team taking passively reactive decisions.)
Any syndicate activity, whether it is a role play, case study or simulation, will engender competition. The quantitative thrust of simulations means that performance can be assessed in "hard" objective terms. Thus teams may perceive that they are losing. This will be demotivating. It is important not to choose a winner and to discount and discourage this aspect. This cannot be totally successful. However, both during the simulation and during the review it is always possible to identify strengths in the losing teams and the weaknesses of the winning ones!
FACILITIES FOR COURSE FINALE
Although the simulation will be briefed and reviewed with the group as a whole in a large room, most work will be done with the teams in individual "board rooms". These allow teams freedom to discuss (and argue). If each team chooses an appropriate team name and this is displayed on the door of their "board room" this increases their sense of "ownership". Ideally, the syndicate rooms should be clustered around the master computer facilities. Each syndicate room should have the usual facilities (flip chart, etc.).
It is quite usual for a course to end with a formal course dinner. Even if this is not so course delegates like to celebrate the course end. If the timetable is such that this dinner or celebration occurs in the middle of the simulation this should be considered. Delegates, on the morning after the dinner, are likely to have some of their faculties impaired. Obviously, this will affect learning no matter the ending session. To some extent, the use of a simulation limits damage. Knowing the risk, teams will prepare for the morning on the previous day (and therefore exercise their planning and forecasting skills). The competitive nature of the simulation may encourage a degree of abstinence. Even if individuals are operating at less than full efficiency or are missing there should be sufficient of the team to ensure progress. (It goes without saying that coffee, analgesics, fruit juice and fizzy drinks should be available and appreciated.)
Source: Churchill Fellowship Study and chapter in my latest book - Corporate Cartooning Book (find out more).
Most recent update: 03/04/12
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