Lots of people have ‘fear of finance’… students, investors, even business owners (we have met a suprising number of entrepreneurs who let their accountant manage the finance portoin of the business). In the past few months we have worked with several universities to look at the impact of our business simulations in overcoming Fear of Finance.
In August, we used the Entrepreneurial Challenge business simulation in the opening residency of the Executive MBA program at Vanderbilt’s Owen College of Management. The 3+ hour workshop ran on Day 3 of the program, and followed 6 hours of accounting lectures from Quon Associates. Survey instrument was applied immediately prior to the simulation (=Before) and the following morning (=After) – certainly not ideal, but we believed it was important that we try to isolate the effect of the simulation.
We looked at Fear from 2 directions.
1) Their comfort level with financial concepts – how comfortable did they feel reading and interpreting their company’s P&L and Balance Sheet, and how comfortable did they feel interpreting and explaining Retained Earnings.
2) How did they see themselves in relation to their colleagues. We believed that a person who was not comfortable with finance would perceive themselves to be lacking in business acumen skills.
Approximately 25% of the class had worked in finance and there was no significant change in their comfort level with the financial concepts.
For the other (non-finance) students there was a dramatic increase in comfort level.
- The number of students who felt they could explain and interpret a company’s Retained Earnings went from 10.8% (before) to 47.8% (after).
- Initially 30% of the students felt their business acumen skills were below those of their classmates; after the simulation this was reduced to 20%.
These students will be studying a lot more finance over the next two years, we will be looking to see if that learning process has been smoothed by the simulation.
Congratulations, Eliza – I know you have been looking for measurable results for years, and I’m delighted that your work is not only paying off, but thoroughly vindicating your vision!