Fun & Games - and Business Insight

The players gaze intently at the screens in front of them, trying desperately to gain an edge over the competition. Unlike at the local arcade, where baggy jeans and baseball caps dominate, these players are clad in business attire. And rather than playing fantasy video games filled with space aliens and asteroids, these players are maneuvering through real-life work situations they encounter each day.

Welcome to the world of business simulation–maps, board games and computer activities that help IT workers step out of their day-to-day jobs to gain a better understanding of corporate goals and challenges and see where they fit into the big picture.

IT executives who use simulation tools say they can be especially helpful in getting employees to better align their work with business strategies, particularly if they're new strategies. And as businesses place greater emphasis on IT project returns, simulation tools not only help employees reshape their thinking toward more cost-effective work, but also motivate them to come up with new revenue-generating ideas.

Tom Crawford, director of e-learning at Maumee, Ohio-based Root Learning Inc., likens the use of business simulation tools to the experience of "the kid who stays up until 3 or 4 a.m. playing the newest video game." Root Learning teamed with New York-based Towers Perrin to develop a simulation game for IT and other managers at Ameren Corp., a gas and electric utility company in St. Louis.

Often, IT workers understand their own jobs well but don't know the intricacies of the business at large, so simulation tools that can help them visualize the company from a macro perspective can be valuable, says Sue Goldberg, president of Northeast Training Group Inc., an IT training facility in Chestnut Hill, Mass. Simulation training is just one of the pieces of corporate education, she says. It should be followed up with additional training, mentoring and coaching, including classroom training.

"I think it gives people a basic understanding of what the business is," says Goldberg.

Your Move

In January, Ameren held three one-day classes to teach 120 managers, including a few from IT and the CIO, about shareholder value and how it fits in with their day-to-day work. The sessions started with small group discussions about the changing dynamics in the business world and in the utility industry in particular.

Participants pored over maps resembling childhood board games such as Chutes and Ladders and Candyland. The maps illustrated various factors that have affected the company, such as deregulation, and successful and unsuccessful moves Ameren has made over the years, explains Matt Herzberg, director of organizational development at the $3.5 billion utility.

The groups then learned the definitions of a variety of financial measures–everything from revenue and expenses to free cash flow and earnings per share–and looked over Ameren's financial statements to understand the company's current position. Herzberg says that even some of the basic information was helpful. And because people often have different meanings for certain terms, it helped in creating a common financial language across the company.

Finally, the groups were further divided to compete in computerized simulations that let them control more than 20 financial variables, such as lowering expenses, acquiring new businesses and increasing or decreasing debt. The team that produced the best financial results over a simulated 10-year period won.

The simulation was developed for a Windows NT 4.0 system with graphics created by Macromedia Inc.'s Flash 5.0 and with Microsoft Corp.'s Visual Basic. San Jose-based Imagine That Inc.'s Extend modeling tool was used to create the simulation model of Ameren's business, and the system maps were developed with iThink system modeling software by High Performance Systems Inc. in Lebanon, N.H. Root Learning, one of Ameren's vendors, charges from $50,000 to $500,000 to develop simulation training classes for its clients, depending on the amount of customization and consultation that's required, said Christy Contardi-Stone, vice president of marketing.

Often, when companies try to boost financial performance, managers think in terms of cutting costs, says Jay Knobbe, manager of application development in Ameren's IT department. But the simulation demonstrated ways to balance risks and rewards to determine which projects are worth the investment and might produce high returns, he adds.

In Ameren's application development division, for instance, Knobbe says the simulation gave him a better understanding of the factors that can drive success for key areas of the business. That has helped him better direct departmental resources toward projects that can produce the highest returns, he says.

The cross-functional teams and competitive elements of the simulation were very powerful, adds Knobbe. In fact, after managers went through the daylong training sessions, the bulk of them returned the following day to jigger variables so they could raise shareholder value or increase free cash flow, he says.

Internal surveys conducted before and after the simulation show that the exercise helped managers better understand 15 key business factors and financial issues, says Herzberg. For instance, on a scale of one to seven, managers rated their overall understanding of key competitors at 4.09 before the simulation. Afterward, their average jumped to 5.07. Even more striking, employees' understanding of free cash flow jumped from 3.24 before the training to 5.09 afterward. And because they were given CDs of the simulation, many have continued to practice on their own and have shared the game with their co-workers, Herzberg says.

"Learning is made up of mistakes, and the simulation exercise allows you to make those mistakes in a controlled environment," says Knobbe.

Advance to Go

Last fall wasn't an easy time for Kimberly-Clark Corp. The $14 billion Irving, Texas-based manufacturer of tissue, personal care and health care products saw its share price drop from $72 in March to $52 in October. The drop was the result of a combination of factors, including the recession and the Sept. 11 attacks, and was followed by several plant closings and job cuts.

But it was also around that time that Kimberly-Clark was fully engaged with "Go To Market," a massive program aimed at boosting the company's progress in terms of customer service and returns to shareholders.

"It was a huge undertaking," says Michael Fischer, senior consultant for corporate training and development at Kimberly-Clark. Although it's unclear whether the program contributed to the company's gradual increase in share price through the first half of the year, some financial returns have been directly tied to the learning initiative, says Fischer. But getting there has been an arduous journey. Trying to present a goal so broad in scope in a way that all employees could embrace proved to be an enormous challenge for senior leaders such as CIO Terry Assink.

"You have to empower people," says Assink. In order to achieve such goals, all employees need to be involved in making it happen, he says, adding that "it can't just be at an artificial management level."

That's the idea behind Go To Market, which was designed to change the way the company manufactures, distributes and markets its products.

It began with a central starting point: the supply chain. Go To Market sought to engage all employees in the change process by showing them how the supply chain touches everyone in the company. It also taught them that by understanding how the different pieces fit together, they can all help improve efficiencies and cut costs, explains Fischer.

The challenge, however, was to find a way to give Kimberly-Clark's 66,000 worldwide employees a bird's-eye view of the supply chain. The solution was to make a game of it.

Getting Into the Game

Say hello to Norman. Norman is the video facilitator for Kimberly-Clark's supply chain game, one of Go To Market's training initiatives, which has so far been rolled out to more than 15,000 employees in North America and Latin America.

"One could almost immediately see how people can get into this," says Assink, who was on the Go To Market steering committee and among the first employees to play the game. "It's a call to action."

There are four sections to the training, which is based on a board game that takes a total of four hours to complete. Part 1 introduces players to Kimberly-Clark's key business drivers, such as stockholder demands and corporate politics that are causing the company to rethink its strategy.

The next section walks teams through a product development and launch. The teams pick cards that assign different roles: logistics, manufacturing, sales, maintenance, marketing and research. They're each presented with challenges they need to solve as a team. But as the teams move toward the product launch, Norman presents new information that forces them to go back and start over. For instance, they may be told that a key competitor has just launched a product similar to the one they were planning and is scooping up market share.

Section 3 of the game focuses on visualizing an ideal supply chain. In this part, the teams come together to share what they would like to see as a tightly integrated supply chain, from Kimberly-Clark's raw-material suppliers all the way to consumers.

In the last section of the game, Tom Falk, the company's president and chief operating officer, comes on the screen to deliver a message meant to "empower" employees to find ways to standardize, simplify or synchronize processes in the supply chain.

"It truly has been a rocket in this company in terms of creating excitement . . . around Go To Market," says Fischer. In fact, Kimberly-Clark developed a second supply chain training tool that quizzes people on their knowledge via the company's intranet.

The supply chain game, which cost about $35,000 and took three months to develop, is also being credited with a big return on investment, says Fischer. For instance, since its launch, Kimberly-Clark employees have developed a new way to package Kleenex facial tissues that has cut $1 million in costs and helped fuel millions of dollars in new revenue, he says. Overall, the company has saved $275 million as a result of the change initiative, according to Fischer.

But the game is only one piece of the company's Go To Market program, says Assink. IT staffers have used tools such as General Electric Co.'s Change Acceleration Process, which helps companies gain acceptance of complex organizational change, to help improve accountability and communication and to identify changes within their department.

"Before, we made changes and we suffered the consequences," says Assink. "Now we prepare for those consequences."

Root Learning Map: An off-line learning experience for groups of eight to 10 people. With the help of a 3- by 5-foot visual and a facilitator, participants are introduced to key concepts such as revenue sources, expenses, net operating profit, net income, free cash flow and earnings per share. Having an understanding of these topics helps prepare them for the simulation.
Root Learning Map: An off-line learning experience for groups of eight to 10 people.
Towers Perrin/Root Learning Simulation: This online learning experience for groups of three to four people features a computer simulation designed to tie basic financial concepts to daily operational decisions and their impact on shareholder value.
Towers Perrin/Root Learning Simulation: An online learning experience for groups of three to four people.

Copyright © 2002 IDG Communications, Inc.

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