The India Journal of Mercuri International Oct - Dec 2016
Sales Innovation through Business Simulation
Business Games – Circa 1950
When Sparks Fly.. Dorothy Leonard & Walter Swap
Business Games - Circa 1950
Business Simulation Games have been played by universities and business schools since the 1950s. Since then, they have been a valuable learning tool for teaching management and also for executive development in organizations. The University of Washington used business simulation games in classes as early as 1957. Way back in 1958, Andlinger mentions three objectives of management games:
a) Education & training of management competencies
b) Analysis and testing of decisions & strategies in companies
Differentiating problem solving games from teaching games, Andlinger observes, a problem solving game is one in which the objective is to arrive at an approximate answer through repeated trials. ‘A game simulating four competing gasoline stations, for example might give the players considerable insight into the probable effect of alternative retail pricing strategies’ (Andlinger 1958b: 148). About teaching games he writes in the same article, ‘A teaching game on the other hand, has as its main objective the demonstration of already existing insight or principles to participants.
Cohen, Cyert, Kuehn and Winters observed in their 1960 paper, the Carnegie Tech Management Game ventured to seed the following abilities in its participants:
i) Abstract, organize and use information from a complex and diffuse external environment
ii) Plan and be progressive
iii) Combine the role of a generalist and a specialist
iv) Work effectively with others. In 1964, they added another element: The ability to set goals and define them in an operational manner.
Burt Nanus, Director of Western Systems Training Center says in his published article of 1969, that good management games serve to:
a) Ensure an exceptionally high degree of involvement of participants in the learning situation
b) Demonstrate management principles, statistics & case studies
c) Demonstrate problems of decision making
d) Demonstrate the use of management tools
e) Represent effective simulations
f) Provide through the way the game is designed, excellent insight into company relations
The need to prevent a game from becoming play was highlighted even in the 1950s and 60s. Andlinger (1958) said ‘Games are as old as man. Usually their basic objective is entertainment.
The business management game, however, aims not at entertainment but at learning. Other differences between it and a game like Monopoly for example are: The degree to which it approaches reality and the degree to which the players experience judgement and skill – as opposed to luck – influence the outcome. If a business game is to serve a purpose beyond that of being a fascinating toy, there must be some transfer of learning from the game situation to reality.
Andlinger also wrote about what unites management games and games of entertainment. He said, both involve conflicts or competition, incomplete information about game rules or about opponent’s strategy, and uncertainty about the result as a consequence of the actions of the opponent or an element of chance. He added a ‘high degree of emotional involvement’ as a common feature.
Andlinger (1958) also illustrates a typical management game board of the 1950s. Sized about 20 by 30 inches, a game board represented ( see illustration below) the operations of a company.
The left hand side of the board represents the market, wherein the shaded areas are urban markets, the white areas are rural markets. Each square represents a Customer. The right hand side represents operations, the spaces in the vertical columns signal that decisions made during a time period do not become effective until sometime in the future. At the beginning of each period all operations move up one space.
Business Games have played a vital role in embedding competencies across the organizational hierarchy for over six decades. As Andlinger said it in 1958, they generate a high degree of emotional involvement among the participants. That makes Business Simulations a game changer in people development.
- Extracts from: Andlinger (1958) | Cohen, Cyert, Kuehn and Winters (1960 & 1964) | Nanus 1969.
- More detailed reading in the book ‘Power at Play- The relationships between Play, Work and Governance’ by Niels Akerstrom Andersen, Professor in Public and Political management, Department of Management, Politics and Philosophy, Copenhagen Business School (CBS)
When Sparks Fly.. Dorothy Leonard & Walter Swap
You have a team of good people but no Einsteins to show. So, do you have to give up all hope of team creativity? Quite the opposite, say Dorothy Leonard and Walter Swap in their book When Sparks Fly published by Harvard Business Review Press. An oft cited quote has them writing – “Whether you lead a group of three in a nonprofit foundation or 300,000 in a Fortune 500 business, the basic process of creativity is the same”. According to Leonard and Swap, there are five distinct steps to turn on group creativity: i) Pick the right mix of people to stoke creative sparks, ii) isolate and define the problem requiring off beat solutions, iii) develop alternate courses of action, iv) invest adequate time in examining the choices and finally, v) select the best-fit option. The authors devote a whole section to how simulation can be leveraged to enhance creativity in teams at work.
Excerpt: Most of us gave up role playing when we reached adolescence. However, role playing, like brain storming, can release floodgates of information. When MTV needed a new game show in 1996, staffers went off-site to “game-storm”. They spent a day recalling childhood diversions like capture the flag, actually playing children’s board games and analyzing TV game shows. The big hit of 1997, Figure It Out came from the game-storm …
At times, realistically playing the role of users requires significant adaptation. Imagine Interval Research’s challenge in getting a group of twentyish researchers to design interfaces with electronic equipment for elderly people to use. How could Generation X, health-club addicted designers probably understand the challenges of an aging body? ……… The answer? Give them gloves to reduce dexterity, glasses smeared with Vaseline to mimic blurred vision, and weights on their arms and legs to simulate time-worn muscles – and then let them role play interactions with the proposed technology”
You have heard it before - “Play is serious business”. You don’t need a major in psychology to figure that out. Children learn almost all essential life skills through the medium of play. And they have loads of fun doing it.
Does that work for adults as well? Current management thought seems to agree.
Writing in the Sept 2015 issue of Harvard Business Review, Martin Reeves and Georg Wittenburg list out ways in which Games Can Make You a Better Strategist.
“Just consider some the advantages games have over more traditional approaches in strategy education” they point out “Books are great to foster intellectual understanding but are not interactive and do not reflect the reality of busy schedules and declining attention spans. Live pilots are highly realistic but costly, time consuming and risky. And coaching or mentoring approaches have great merits for personal development, but are hard to scale”
So how do games and simulations help build management competencies? Important among the benefits listed by Reeves and Wittenburg are:
- Inexpensive, real time feedback – With near instant feedback through game scores and competitor’s behaviour, the learning is quicker than in the real world. “In addition,” say the authors “unlike in reality, failing in games has no costly downside. Games are testing grounds for strategies. They’re “sandboxes” where erroneous behaviors can be undone and different decision paths tried out”. Games and simulations provide a safe and non-threatening atmosphere where one can take risks, make mistakes and learn in the process.
- Interactivity and deeper engagement with ideas – In the course of living through a simulation or playing a game, the participant has to analyze the environment, make judgement calls, execute decisions, and reflect on consequences. As the HBR article sums it up – “Stimulating aural and visual senses, games provide a much more immersive experience than written text or spoken words”
- Structured analysis executive behavior - Games and simulations turn the spotlight on “routes-not-taken”. Post game reflections and replays help managers appreciate the consequences of their actions and omissions. Such reflection and feedback can help rewind to a participant’s actions or view the game play from a competitor’s perspective. And score-keeping allows performance comparison with others offering insights
- Risk free scenario testing – Games allow room for “what if” testing of scenarios both foreseen and unforeseen. In the authors’ words “Strategy games anticipate and amplify reality by acting like vaccinations”
On board learning through simulation
The insights from the article apply equally to every genre of games and simulations used for learning. Board games, for instance, have been a great source of learning through the growth years of children and have their origins going back to over millennia. Board based simulations are a great way to foster executive learning.
Play works. Whether it is about getting a group of young high potentials to gain the corner-room perspective, or enabling an innovation mindset, or creating a crucible where diverse functions learn to appreciate and bond with each other, or helping people put their feet in the water in preparing them for change.. business simulations work.. like they have been working since ages for generals in the war room strategizing their combat.
They facilitate a ‘live’ experiential learning, much more lasting than their virtual peers. They involve real life interactions with other team members in the game, with rules that mirror actual conditions in the ‘touch and feel’ action points. All this in environs that encourages experimentation, trial and error. None of which will cost either lives or careers. The outcome is an unmatched, kinesthetic, immersive learning experience that gets hardwired as a takeaway.
The power of simulation
Something as superfluous as "play" is also an essential feature of our consciousness. If you ask children why they like to play, they will say, "Because it's fun." But that invites the next question: What is fun? Actually, when children play, they are often trying to reenact complex human interactions in simplified form. Human society is extremely sophisticated, much too involved for the developing brains of young children, so children run simplified simulations of adult society, playing games such as doctor, cops and robber, and school. Each game is a model that allows children to experiment with a small segment of adult behavior and then run simulations into the future.
Similarly, when adults engage in play, such as a game of poker, the brain constantly creates a model of what cards the various players possess, and then projects that model into the future, using previous data about people's personality, ability to bluff, etc. The key to games like chess, cards, and gambling is the ability to simulate the future. Animals, which live largely in the present, are not as good at games as humans are, especially if they involve planning. Infant mammals do engage in a form of play, but this is more for exercise, testing one another, practicing future battles, and establishing the coming social pecking order rather than simulating the future ― Michio Kaku, The Future of the Mind: The Scientific Quest to Understand, Enhance, and Empower the Mind
Mercuri Mail is a thoughtful compilation of meaningful articles drawn from Mercuri India archives, and from timeless management literature. Edited by Jaishankar Balasubramaniam & Sridhar Srinivasan of Mercuri Goldmann (India) Pvt. Ltd. This publication is for private circulation only.