Several years ago, my colleagues and I were asked to design a business simulation based learning and development training program for a multinational package delivery and supply chain management company. The client was planning to restructure its U.S. Package Operations Department by consolidating 46 districts into 20, a change that would significantly affect the company’s district leadership.
As we discovered, there were many challenges inherent in the change:
- Getting newly formed teams with diverse biases, backgrounds, and mental models to collaborate on how to grow and run a district
- Moving from a culture where most decisions were made by the corporate office to an increased span of control at the district level
- Evolving the managers’ approach from general cost management to a true Profit & Loss focus
- Developing an understanding of the short- and long-term trade-offs regarding market segmentation, pricing, value positioning, and globalization
Most of the team members who participated in our business simulations were company veterans, well versed in the old environment. Few participants had much exposure to the new business model. Their success depended on shifting from a tactical to a more strategic approach, collaborating with different team members in new areas, and changing deeply engrained habits.
Company executives recognized that merely telling district teams what to do was insufficient for them to succeed in the challenges ahead. Instead, the Corporate Training and Development manager created a vision for a leadership simulation training program that would span a hypothetical three-year time frame, in which participants could make decisions and follow the impacts of decisions over time. The first step in our process was to create a responsive model that represented both the current and future state of the client.
The model was loaded into our training simulation software, along with market data, global conditions, and company reports. The business simulation required teams to analyze data, set strategies, make both strategic and tactical decisions, and see the performance of the district across many indicators. Time was limited, and teams had to rely on each other to recommend approaches.
The most powerful way to get a diverse group of people together is to give them a difficult problem to solve. In this case, individuals who had never worked together and who were responsible for different parts of the business needed to quickly establish team norms and tackle some very difficult problems.
Because this initiative was so important to the business, the simulation training spanned seven days. Each day, teams faced different challenges as they experienced the consequences of decisions made the previous day. The emotional throttle was set very high in this particular simulation. By the third and fourth day of the learning and development training program, participants were no longer giving high fives for coming out ahead of other teams. Instead, they were trying to unpack why their division was spiraling out of control or how they had reached certain limits to growth.
We gave teams ample time to process and reflect on their decisions and team dynamics between the various rounds of learning and development training. At the conclusion of the week, teams presented and defended their actions, discussed how they would approach things differently, and outlined steps they would need to take to further develop the team.
The company’s Vice President of Global Learning and Development explained that the simulation training was instrumental in accelerating their regional transformation. “The simulation is part of our learning ecosystem. Much like a biological ecosystem in which physical biological organisms interact with every other element, a learning ecosystem integrates both business and learning components to create an adaptive learning environment.”
The restructuring initiative continues to be measured in terms of impact on profitability, revenue growth (by market), sales, and customer indicators, but the initial results of the business simulation were universally very positive.
Michael Vaughan is the CEO of The Regis Company, a global provider of custom business simulations and experiential learning programs. Michael is the author of the books The Thinking Effect: Rethinking Thinking to Create Great Leaders and the New Value Worker and The End of Training: How Business Simulations Are Reshaping Business.