There’s a question I hear occasionally about the use of Income/Outcome for teaching fundamental business concepts: “But would it work in other countries?”
That’s like asking if the Periodic Table of elements applies on other planets. The answer is Yes. In each case the analysis and representation is universally the same, because the underlying realities are universal.
The underlying business realities include these:
- The Income Statement (or P&L) is a history of individual transactions over time. It’s different from the Balance Sheet, which is a description of What you have in the business (Assets) and Where the funding for them came from (Liabilities and Equity). However, both Income Statement and Balance Sheet are necessary to understand the state of health of the business.
- Cash flow is not the same as Profit. It is perfectly possible to be profitable and expanding into a profitable opportunity, and to go bankrupt in the process.
- Some costs and expenses increase in step with each additional sale made. They need to be understood differently from costs and expenses that stay the same whether sales are made or not.
- It is not usually the customer who pushes prices down in an oversupplied market. The customer merely takes advantage of the pain being suffered by the supplier in the weakest position.
- There is no end to the need for further improvements in both operational efficiency and customer satisfaction.
All these items are universal, can be manifested on a gameboard, and can be experienced in theIncome/Outcome workshops that we run. It’s true that the Balance Sheet can have its line items presented in different orders in different cultures, but this is merely saying that
Assets = Liabilities + Equity
is the same as
Assets – Liabilities = Equity
The fundamental relationships are unchanged, and the representation of them doesn’t have to change, either on a gameboard or in the online Visual Finance app.
And all humans are designed to learn through play. Put people in teams and let them compete against each other, and they will learn all they can, discussing ideas in order to beat the other teams.
Income/Outcome workshops are running in 15 languages around the world, some as workshops for global corporations, some for local start-up entrepreneurs. The enthusiasm is high in every country because the simulation is fair, transparent, and teaches interesting ideas in a very visual way. The foundational learning (including the bulleted points above) is covered in every workshop, and is as essential for an entrepreneur as it is for a sales manager or for a CFO or for anyone else in business.
Business concepts are universal. Watch two 6-year-olds playing outside when one has some chocolate and the other has some marbles, and you’ll see them thinking through issues of price and cost and replacement opportunity as they negotiate the exchange rate for a trade… It’s the same anywhere in the world.