My two previous articles dealt with Icebreakers and with games about 'management' in the sense of planning and organising. There was no reference to computers. In this article they have a central position because it deals with simulations in which teams are asked to make decisions about how a business shall be run. These decisions are usually quantitative ones about specific subjects like price and quality and promotion. The teams subsequently receive financial statements - usually Profit/Loss Account and Balance Sheet - purporting to show 'What happened as a result of your decisions'. The simulations are run in several 'rounds' each representing a certain period of real time and the teams are expected to learn as they go, improving the quality of their decisions and getting better results.

DO I WANT TO TANGLE WITH SUCH THINGS ?

Many people in the training world have a background in the social sciences and are interested primarily in the human relations aspects of management. They are a bit reluctant to get involved with computer-based simulations. Several reasons are given.

1. These simulations tend to be about business economics and accounting. Some training people feel inadequate in these areas, or just believe it is appropriate to stand down in favour of somebody with more expertise. There is, perhaps, a feeling that one would not be in control of the session.

2. The complexity of some such devices means that even the lessons about business economics and accounting don't come through very clearly. There seem to be an awful lot of variables and it seldom becomes obvious that if one does THIS then THAT financial consequence follows. One can recognise decisions and results, but what connects them is a bit of a mystery - a black box. Even the guest speakers one brings in don't seem to make things better. Sometimes they actually make things worse, with their specialised jargon.

3. These simulations are not all that helpful as learning devices because the completeness of the output data, and the fact that it is computer-generated, encourage participants to accept it without question. The are given a printed Profit/Loss Account but they don't do any sums of their own to check where the figures come from.

4. Despite all the hype that surrounds them, there are a number of occasions when these things simply don't work! The equipment is unavailable, or the wrong type, or incompatible with the standard company system. One then looses confidence in the device. It may be filling the screen (or the print-out) with beautifully laid-out numbers, but are they actually right?

This article is going to offer two pieces of advice, and argue in support of them. The first is that one can still find material dedicated to business economics and accounting that is reasonably simple. It is therefore possible and desirable that the training specialist should acquire a degree of competence in locating and using it. The second is that some other learning objectives don't depend on detailed understanding: therefore one can forget the worries and focus instead on the benefits offered.

COMPLEXITY IS NOT INEVITABLE

A degree of mystery has been built up over the years which is not really necessary. One can start with the fact that Profit and Loss Accounts and Balance Sheets are all a matter of numbers, and that the numbers have to be manipulated according to rules. Numbers and rules are natural food for computers. Put those two ideas together and you reach the concept of a computer-controlled business simulation. Add the further fact that computers have been getting more clever every year and add also the final fact that their servants just love showing off their idols. It does not then take very long before you reach a situation when some simulations are being presented in the form of computer programs when the business model used does not demand it. Some of them (and one must agree that their on-screen appearance is beautiful presented and exciting) don't use business calculations much more complicated than can be done on the back of a cigarette packet. Not too many readers of this article will be in the dinosaur age group. Those few who belong to it may know that in 1965 there was available a manually controlled device called The Small Business Management Exercise. In this, playing teams made decisions about 'how to run the company', and the administrator worked out 'what had happened' by using charts and simple arithmetic. It was entirely satisfactory as a means of demonstrating what General Management is all about. Running it was within the competence of anybody able to control his/her personal domestic finances. It was just necessary to read the manual, to think about what was required and why, and to practice the routine a few times.

(The collection of rules which the administrator - or the computer - applies is called THE MODEL. An example of a rule might be 'For every £1 a team increases its selling price above a certain bench mark, the attractiveness of its product decreases by 2%'. The rules can vary from few and basic to multitudinous and desperately complex, but the former type are quite adequate for first level management training. The latter type often reach the point where their interaction is so complicated that in the time span of a training session nobody has the slightest hope of working out the relationships.)

There are a few manually controlled devices around today. Others have been discarded because the computer can work out the numbers much quicker, and because of a climate in which people feel "If it is not on a computer it is not credible". The idea being offered here is that the training specialist can either find and use manually controlled simulations or spend some time experimenting with the simpler computer-based ones and puzzle out how they work by making different decisions and comparing the results. Get the disk and play around with the program on your own PC or a borrowed one. Don't get into the clutches of your systems department because you won't then do the personal mind-bashing that is necessary. One needs to understand how the model works because competing teams frequently get results far below what they have hoped for and are apt to say "We can't have done that badly. There must be a mistake. How can you possibly justify these terrible results you have given us?" In The Small Business Management Exercise the administrator was able to make comments like "There was a mismatch between the quality of product you were making and the price you asked. In situations like that the benefit you get from your advertising is reduced because you are not advertising a credible package. So although you spent hugely on promotion, it did not do you very much good." The administrator felt 'in control' because the workings had been made transparent to him. By contrast, computer programs hide all the calculations away inside a black box and the administrator feels vulnerable. Sometimes one is reduced to replying "That is what the computer says and you will have to live with it".

Why should you make this learning effort? Well, if your organisation never has any requirement to promote learning about 'how a business fits together', then forget it. If there is such a requirement then it is worth doing for three reasons. Firstly, every manager in a financially controlled business ought to have modest competence in this area. Secondly, it enables one to enlarge to enlarge the field of knowledge in which one can contribute personally to training activities. Thirdly, it is a process of learning-by-experiment that contributes to personal growth.

DETAILED UNDERSTANDING IS NOT ALWAYS NECESSARY

The second piece of advice offered is this - "There are several uses of the more complicated business simulation where detailed understanding is not needed. So don't worry that you have not got it but focus instead upon the non-technical learning outcomes".

Usage related to teambuilding

If participants are asked - five years after taking part in such an event - what was the principal benefit gained, very few will talk about technical knowledge: a far larger number will say something like "I learn a great deal about my limited cooperative skills, and a great deal about how improve my contribution to a team". So when the clever, numerate, computer-based people suggest that the value of their device is that it will give participants a detailed understanding of, say, discounted cash flow, accept the claims with reservations. That may be what the device is designed to do. It may be what they want it to do. It may even succeed in the short term. But the details will be quickly forgotten by all participants who don't have to work regularly with discounted cash flow. By contrast, the memories of how they behaved, and how their fellow team members behaved, will last.

Quite often human relations specialists stand aside from the complex business simulation in the belief that 'It will all be about numbers' when the reality is that they have an excellent field for study and helpful comment. The subject of the talk will be numbers and economic relationships but the quality of the talk (and therefore team success) will be determined by personal characteristics and behaviour. It will be conditioned by considerations like:

How committed team members were in the sense of paying attention, being physically present, and completing reliably such tasks as were assigned to them.

Whether there was internal strife to obtain a leadership position or whether team success was accepted as the greater good.

How well those who felt knowledgeable about an issue explained the details to those who were less informed.

How determined people were to demand information from others when they felt themselves to be ignorant.

Whether the functional roles in the group (Using the Belbin terminology) were adequately carried out.

Whether there was a conscious attempt to ensure that all team members found some satisfaction in the activity.

Such games have frequently been won by the team that worked most effectively as a unit rather than by the team whose members apparently possessed the most relevant expertise. This, surely, is the area that human relations specialists want to study.

Usage related to introducing technology

Sometimes there is a need for students to learn what present technology can do, and to gain experience of actually using it. This is a door-opening thing: changing attitudes so that people no longer think "That is all far too complicated for me" and begin to think instead "That sort of technology could be used to do so-and-so" or "With that sort of technology we would no longer be stuck with such-and-such a problem". A topical example is use of the Internet. It is possible to run a business simulation on the Internet and give people a valuable, novel experience. If it happens to be a simulation in which the business relationships are quite hard to master, it does not matter too much because they are not the prime objective.

Usage related to prestige

There are times when a complex business simulation is used - or perhaps a company team is entered for one of the national competitions - with reward or prestige-giving as the real motive. The intention might be verbalised as "Let's give these people a chance to try something really difficult. Let's show them that we view them as people who will respond to that sort of challenge!" Complexity, and novelty and the breaking of new ground then become positive merits. It does not matter that participants have to admit, afterwards "Even at the end I did not understand fully how the model worked". The admission is also a way of saying "What an advanced level we were competing at! Not everybody can do it!"

However, those who go down this route must be aware of the dangers attached. If something is new - a genuine first-ever - then there will certainly be teething problems. It is, for instance, possible to have a competition played on the Internet with all sort of exciting graphics and up-to-the-minute management information - and then find that the server is down or the screen takes such ages to fill that everybody loses interest.

Usage related to conditions of uncertainty

Managers today can easily find themselves in situations where they don't know the 'right' answer, and don't have the time to research it, but are nevertheless required to take some positive, immediate action. The focus is then upon personal disciples that should be applied in order to separate broadly 'good' decisions from the reverse. In a business simulation it will be possible to identify teams that make better or worse use of the data they do have available. Likewise there will be teams that spell out what assumptions they are making and there will be teams that never realise they are making assumptions at all. There will be teams that allocate their time in a disciplined manner and there will be teams that don't plan it at all. There will be teams in which some member supplies clear direction and purpose, and there will be other teams which behave like headless chickens. In tackling any problem there processes that should be carried out - like defining objectives, developing alternatives and assessing probabilities. It is sometimes easier to study these processes when they are not overshadowed by reaching or failing to reach some obviously 'right' conclusion. The complex exercise offers a more meaningful test.

Usage associated with awareness of possible futures

Some computer-based games are about planning and project management. The computer program accepts data about a wide range of future plans and conditions. It is able to project their effects forward in time and say, as it were "Because you did THIS then THAT would happen in Week 9, except that it will be delayed by one week on account of THE ACTION BY SO-AND-SO which will, of course, mean that MACHINE X will not be available because it is down for maintenance." This sort of juggling with numbers and time scales is exactly what the computer does well. Human beings can theoretically do it, but it takes them a terribly long time and they usually give up. It is a bit like chess: one knows that all sorts of terrible things might happen ten moves hence, but the vast majority of casual chess players look one or two moves ahead only. They lose faith in their ability to generate meaningful long term scenarios so they move a piece and hope. The beauty of the computer program is that it will follow out quickly and exactly the implications of the rules and the data programmed into it. In this respect it really does open new ground. It is as if the computer was saying "Do you appreciate that if you make these decisions, and the conditions are really as you have stated them, then there is a danger of such-and-such happening?" The implication for the planners (who might be amongst the participants in such a simulation) is that:

They have not stated accurately the conditions and relationships that link different parts of the project; and/or

They have made poor decisions about managing the project; and/or

They have been unable to look far enough into the future to perceive the interaction of all the variables.

What the computer is doing here is making one more sensitive to possible futures and at the same time showing a way to test for them. If a simulation makes a planner aware that something might happen then he will consider the possibility when dealing with real life projects. If he has never conceived of it, then he can't evaluate it.

SUMMARY

The advice offered can be summarised like this:

1. Don't be put off by the fact that other specialists (accountants and computer people) seem to be the 'owners' of computer-based business simulations. The principles are not mind-boggling though a high level of detail can be.

2. Get hold of one of the simpler ones and experiment with it privately. You will have a few early headaches but the effort will be worth while.

3. Define carefully the objectives of any session you are planning. It may be that the characteristics of a simulation which seemed negative when you were thinking of one objective will seem positive when you are thinking of another.