Normally our prospective clients are happy with the range of products we offer for teaching business acumen: five levels of program to choose from, multiple industry models, and a dozen languages. And we end our workshops with a module that is unique to Income/Outcome, the “Company Board” that models their company (or a competitor) in the same conceptual format as the game-boards that the teams have been playing on.
But sometimes a client believes the learning would be best if we used the model of their actual situation for the simulation, and had teams play against each other to see who could make the most money. This is a bad idea for various reasons:
- A real world company is complex, but the fundamental driving forces of business activity – and the fundamental concepts for categorizing and analyzing business activity – are simple.In order to most easily grasp the concepts (cash vs profit; Balance Sheet vs Income Statement; cost structure; leverage; etc) and their importance, and to see how they interact to produce a healthy company, a simple model is important.
- Analyzing only their real company will give very limited business acumen. Participants should achieve a big-picture understanding of the whole business world, which will be more useful to them and their company as the industry changes.
- The best strategies in the simulation may be contrary to the strategies of the real-world company. This is not to say that we are teaching that the real-world company is mistaken. The simulation cannot hope to model the whole situation – not just the real company, but the entire environment of competitors, legislation, international trade, etc. And we don’t teach a “correct” strategy. Sometimes the winning team is the one that borrowed the most, expanded aggressively, and took lots of risks to sell a high volume. Sometimes the winning team didn’t borrow at all, stayed small, and used its strong cash position to find niche opportunities that its competitors couldn’t afford to take. It depends on the team’s skills.
- Tell people they are running a model of their real company, and they will be nervous and restricted in their thinking. But tell them it’s a model of a pretend business, and they will relax and deal with it as a puzzle and a challenge. The latter is the better state for learning.
- The time for the real company is at the end of the workshop, not the beginning. Participants start out purely focused on the game, then make their own connections to the real world, and after a few rounds become interested in analyzing their real company. That is the time for presentations by the Finance Department, and for the Company Board, and for discussions about the company’s strategic position and the priorities for moving ahead.
And that is how we structure all our workshops, regardless of the industry model, regardless of whether the workshop runs for a half-day or a full three days, and regardless of the language, culture or continent that it is running in.
The Company Board module and the discussion of the real-world client is a vitally important thing to do – but it is the capstone of the workshop, it cannot be the foundation. Trust me on this: we’ve had 20 years’ experience, we’ve developed the most effective simulations in the market. The way that we structure it, your participants will love the workshop (which keeps the Training Managers happy), and they will communicate more rapidly and accurately and make better decisions (which keeps the Finance Managers happy).
Remember: simple model first, then add complexity, and then customize the model to the real-world company at the end!