Using Simulations for Business Acumen Development

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Using Simulations for Business Acumen Development

  1. 1. Using Simulations for Business Acumen Development <ul><li>Nathan Kracklauer </li></ul><ul><li>Enspire Learning </li></ul>Copyright © Enspire Learning
  2. 2. The Business Problem <ul><li>Good managers are hard to find </li></ul><ul><li>… and getting harder </li></ul>Copyright © Enspire Learning Manager Cohort: 40-59 Retiree Cohort: 60-79 Source: United Nations Department of Social Affairs
  3. 3. Strategies for Talent Development <ul><li>Headhunting </li></ul><ul><li>Promoting/Training </li></ul>Copyright © Enspire Learning
  4. 4. Poll: Headhunting vs. Promoting <ul><li>Which do you think is a better approach for your company or industry? </li></ul>Copyright © Enspire Learning
  5. 5. Headhunting <ul><li>Pros </li></ul><ul><ul><li>Insight into competition </li></ul></ul><ul><ul><li>Management experience </li></ul></ul><ul><ul><li>Industry knowledge (sometimes) </li></ul></ul><ul><li>Cons </li></ul><ul><ul><li>Unknown quantities </li></ul></ul><ul><ul><li>No company tacit knowledge </li></ul></ul><ul><ul><li>Uncertain loyalty </li></ul></ul><ul><li>DOESN’T INCREASE THE TALENT POOL  higher costs for everyone </li></ul>Copyright © Enspire Learning
  6. 6. Promoting and Training <ul><li>Cons </li></ul><ul><ul><li>Ramp-up time and costs </li></ul></ul><ul><ul><li>Peter Principle </li></ul></ul><ul><li>Pros </li></ul><ul><ul><li>Known quantities </li></ul></ul><ul><ul><li>Industry and company tacit knowledge </li></ul></ul><ul><ul><li>Loyalty and motivation through promotion carrot </li></ul></ul><ul><li>INCREASES THE TALENT POOL  lower pricing pressure </li></ul>Copyright © Enspire Learning
  7. 7. What Does A Manager Do All Day? <ul><li>Coaching </li></ul><ul><li>Performance management </li></ul><ul><li>Team management </li></ul><ul><li>Project management </li></ul><ul><li>Business plan development </li></ul><ul><li>Reporting </li></ul><ul><li>… . </li></ul><ul><li>Decision-making </li></ul>Copyright © Enspire Learning
  8. 8. Business Acumen <ul><li>The ability to reliably predict the impact of a given business decision on key company financial metrics. </li></ul>Copyright © Enspire Learning
  9. 9. Business Acumen – Who Needs It? Copyright © Enspire Learning
  10. 10. Key Types Of Managerial Decisions <ul><li>Managing changes in business volume </li></ul><ul><ul><li>Changing utilization of facilities and personnel </li></ul></ul><ul><ul><li>Increasing and decreasing staffing levels </li></ul></ul><ul><ul><li>Shifting the cost structure: fixed costs versus variable costs </li></ul></ul><ul><li>Negotiations with vendors and customers </li></ul><ul><ul><li>Pricing and discounting </li></ul></ul><ul><ul><li>Changing terms of payment </li></ul></ul><ul><li>Investing for growth </li></ul><ul><ul><li>Purchasing capital goods </li></ul></ul><ul><ul><li>Implementing new processes </li></ul></ul><ul><ul><li>Creating new offerings </li></ul></ul><ul><li>Many, many more… </li></ul>Copyright © Enspire Learning
  11. 11. Business Acumen – How Do You Get It? <ul><li>Learn concepts </li></ul><ul><li>Practice </li></ul><ul><li>Practice </li></ul><ul><li>Practice </li></ul>Copyright © Enspire Learning
  12. 12. Poll: Learning Needs of New Managers <ul><li>What do you think are the most important learning needs of new managers? </li></ul>Copyright © Enspire Learning
  13. 13. Learning Needs Of New Managers <ul><li>Flexible scheduling </li></ul><ul><li>Self-paced learning </li></ul><ul><li>Application-oriented learning </li></ul><ul><li>Access to expertise </li></ul><ul><li>Informal and social learning </li></ul>Copyright © Enspire Learning
  14. 14. Learning Financial Concepts <ul><li>Flexible scheduling </li></ul><ul><li>Self-paced learning </li></ul><ul><li>Application-oriented learning </li></ul><ul><li>E-Learning </li></ul>Copyright © Enspire Learning
  15. 15. Practicing Business Acumen – Decisions <ul><li>Application-oriented learning </li></ul><ul><li>Access to expertise </li></ul><ul><li>Informal and social learning </li></ul><ul><li>Facilitated team-based simulations </li></ul>Copyright © Enspire Learning A game is a series of interesting decisions. -- Sid Meier, Creator of “Civilization”
  16. 16. Applied Business Acumen Simulation <ul><li>Run a virtual company </li></ul><ul><li>Compete with other companies </li></ul><ul><li>Make business decisions in operations, sales, research, and finance </li></ul><ul><li>Review results in terms of realistic financial statements </li></ul>Copyright © Enspire Learning
  17. 17. Access to Expertise <ul><li>Facilitated debriefs with an instructor </li></ul><ul><ul><li>Review key financial concepts </li></ul></ul><ul><ul><li>Analyze simulation decisions using financial toolkit </li></ul></ul><ul><ul><li>Relate simulation decisions to real-world decisions on-the-job </li></ul></ul>Copyright © Enspire Learning
  18. 18. Informal and Social Learning <ul><li>Best practice: cross-functional 3-4 person teams jointly run a virtual company </li></ul>Copyright © Enspire Learning
  19. 19. Business Challenge Copyright © Enspire Learning
  20. 20. Scalability Through Web-Based Delivery Copyright © Enspire Learning Classroom Delivery Virtual Delivery Play takes place over one day, including introduction and debriefs. Turns of the simulation advance every 15 minutes. Play takes place over 3-4 weeks. Introduction and debriefs take place through virtual meeting software. Turns advance daily. Teams meet in daily phone conferences to make decisions. 8am – 10am Introduction 10am – 11am Turns 1–4 11am – 11:30am Debrief 1 11:30am – 12:30pm Turns 5–8 12:30pm – 2:30pm Debrief 2/Lunch 2:30pm – 3:30pm Turns 9–12 3:30pm – 5pm Final Debrief Day 1 Introduction Days 2–5 Turns 1–4 Day 6 Online Debrief 1 Days 7–10 Turns 5–8 Day 11 Online Debrief 2 Days 12–15 Turns 9–12 Day 16 Final Debrief
  21. 21. Wrap-Up <ul><li>The coming management deficit </li></ul><ul><li>To manage is to decide </li></ul><ul><li>Business acumen: understanding financial implications of decisions </li></ul><ul><li>Learning needs of new managers </li></ul><ul><li>Simulations: practicing decision-making </li></ul><ul><li>Scalable delivery of simulation-based training through web-delivery </li></ul>Copyright © Enspire Learning
  22. 22. Questions and Answers Copyright © Enspire Learning Nathan Kracklauer Enspire Learning [email_address] Presentation slides and a recording will be available at http://www.enspire.com/thought-leadership/webinars/business-acumen-simulations For more information on Business Challenge, contact us at sales@enspire.com.

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