Sun shining behind cloud

Good simulations act as idea generators.  Exploring the rules and boundaries of a simulated environment allows one to test out ideas in a safe way.  In a worst-case scenario, all you lose is your simulated shirt. Pilots use flight simulators, managers use business simulators.  Good simulations are also proven methods to get out-of-the-box ideas and innovation flowing. When difficult concepts are clearly and memorably illustrated, novel connections are seen, hidden wiring is exposed and “a-ha!” insights appear during the session and for days following.  These insights, when taken back to the business, are where the real ROI is found.

Example of a Flight Simulator

Pilots train on flight simulators.

I ran our Income|Outcome business simulation game with a dedicated supply chain audience a few weeks ago for just this purpose.  When running programs for functional groups we like to do some deep dives into specific areas of the business.  We increase the complexity and challenges around a particular aspect of the business to challenge functional teams in their specific area of focus (sales, R&D, supply chain, production, etc).

This particular supply chain group was tasked with competing in a manufacturing industry while facing three scenarios- quality/product recalls, unexpected tariffs and supply chain disruptions due to a global pandemic.  For each scenario the teams were asked to identify:

Managers playing a business simulation game.

Managers train with business simulations.

  1. Impact: What are the short and long-term financial consequences for the business (P&L, Balance Sheet, Cash Flow)
  2. De-Risking: How does the real-world company attempt to manage risk for that kind of situation
  3. Opportunities: What opportunities for the business can be found within those scenarios.  Essentially, where are the silver linings (and are there any gold ones?)

The global pandemic scenario was particularly timely, and the ideas generated were innovative and surprising.  Here is a sampling from my facilitator notes:

  • Take opportunities in production shutdown to do hardcore maintenance and streamlining that can’t easily be tackled under standard operating tempo
  • Reduce working capital by taking deep inventory and selling off unneeded stocks to other companies with demand (or donate for tax benefits)
  • Diversify suppliers and renegotiate contracts, bring key critical component manufacture back in-house
  • Solicit “crazy ideas” from workers and see if any radical innovations rise to the surface
  • Offer supply chain financing to hurting suppliers or customers
  • Take the time to do neglected trade reading and research into best practices
  • Look to hire in top talent from companies that are unable to retain staffing through the crisis

I challenge you to dig deep until you find some silver (or gold) linings to this crisis, and when classroom training returns- please consider Income|Outcome to drive innovation (and to enhance your team’s business and financial acumen).

Best, Nikolai