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Learning Best Practice Behaviours through Multimedia Simulators

Leena Kojonen
Andersen Consulting
leena.kojonen@ac.com

Abstract

This paper describes the concept of business simulation and its application in corporate life. It outlines the business context in which effective reskilling of employees, coupled with communication of new strategies is becoming an imperative for companies willing to stay competitive. The paper then gives a definition for business simulation and lists some of its business benefits. A practical example of using a multimedia business simulator is described in brief. Finally, a short list of conclusions follows.

Scope

The paper gives a view of the corporate performance development, focusing on the business context and the related business benefits, and a practical case description. It will outline the pedagogical rationale only on a surface level. Furthermore, any considerations related to developing these kind of solutions are excluded in this paper.

1. Business context

It's no news to mention that the environment where global companies operate today is in an ever-accelerating mode. Company executives will realise this in a wealth of new requirements which determine a company's success the marketplace:

• New operating models due to mergers, globalisation and technological advancements Productivity expectations resulting from heavy technology investments New marketing and distribution models and channels More educated and demanding customers Less time to respond to competitors' moves
• Shortages of key skills

Looking at the requirements from an individual employee's point of view, the following performance challenges will occur:

• Need to make complex decisions Need to apply new technologies quickly and flexibly More sales orientation; more direct contacts with the end customer Requirements for both broad and deep skills
• Constant retraining due to changing responsibilities

This set of requirements clearly calls for several remedies, which are often grouped under such names as competency management, knowledge management, or performance management. A common theme in all of these is reskilling the employees, and helping them learn by doing - preferably in a job-like yet risk-free environment. Business Simulation will try to respond to these growing needs.

2. Definitions

Business Simulation as a concept will have different definitions depending on where one asks. In the context of this paper, the following is being used. Business Simulation means learning through interactive experiences in a simulated work environment, which...

• simulates the learner's work environment looks and feels like work provides realistic outcomes provides customised, point-of-need coaching and feedback
• can be technology-delivered or live.

The last point mentions the distinction between "theatre-style" and multimedia simulators. The same pedagogical design applies; however, the delivery mode will make the development and implementation phases rather different. Within this paper the focus is on simulators delivered through multimedia. In order to distinguish Business Simulation from the wealth of other vaguely similar offerings, it is also useful to state what it is not:

• A game; as a game does not possess integrated feedback mechanisms like Business Simulations do. Role-playing; as role-playing involves playing the part of another person unlike Business Simulations where the learner plays their own role in a simulated environment. CBT; as Computer Based Training involves information dissemination in a "learn by telling" environment. Business Simulation always involves learning by doing.
• Process Simulation; as this type of simulation focuses on business processes and transactions unlike Business Simulations which also develop "people" skills.

Business Simulations are built around an approach to learning called Goal-Based Scenario (GBS). GBSs present real-world problems that allow learners to learn by doing. There are no lectures, no instructors, and participants are allowed considerable freedom to choose their own approach to problem solving. Similar to a flight simulation, a Business Simulation creates a realistic, risk-free environment where the learner can gain practical business experience by exploring options, making mistakes and learning from these mistakes in a virtual workplace. In addition, GBS proponents argue that people learn more and learn better when they are in pursuit of a well-defined goal. To aid the learner in the process of reaching that goal, Business Simulations provide the learner with a variety of resources ranging from expert interviews to written documents. The result is the creation of a learner-directed environment where the learner can spend as much or as little time investigating different areas chosen.

3. Benefits

While the development of full-scale Business Simulators is still a rather novel industry, a set of benefits has already been witnessed in several large client engagements.

Business simulation has lent itself to many different situations, ranging from selling hamburgers to brokering multimillion-pound merger and acquisition deals. In addition to delivering a tailored learning environment to impact specific business imperatives, it also customises the learning experience for individuals. Both high and low performers can strengthen those skills in which they are deficient. Knowledge retention increases and employees are engaged and invested in change.

Companies increasingly depend on their employees to make decisions and judgements that reflect the organisation's values and strategy. Business simulation offers the opportunity to practice decision-making and risk assessment safely, with instant feedback on the appropriateness of those decisions. These can vary from virtually negotiating telecom solution deals to finding an optimal cost structure for a new aircraft engine.

Business simulation raises an organisation's internal "clock speed" and improves business performance by maximising employee flexibility and job performance. Traditional approaches to training require that employees take time away from their jobs in order to learn. Business simulation allows employees to immediately incorporate the simulation into their jobs to build their competency. And the more quickly employees achieve proficiency in their areas, the more quickly the organisation's "clock speed" increases. This often materialises in a significantly shortened time to competency e.g. in the context of new employee induction, or job rotation.

New products, processes, structures and systems carry a massive communication overhead with the risk of rumour, confusion and uncertainty. For an organisation's strategy to be implemented successfully, it is imperative that all employees understand their role in making it happen. Furthermore, workers at all levels must appreciate the impact of their decisions in driving the strategic imperatives. Business simulation allows the organisational strategy to be communicated clearly, consistently and to large audiences, thereby inviting participation and fostering acceptance of change.

Traditional training methods allow an organisation to test retention of training content. However, because these methods are removed from the work environment, they do not allow accurate measurements of training effectiveness on business performance or clock speed. Business simulations, which create a systematic representation of the business context, do. In one business unit of a large investment bank, the payback of using business simulation to train 120 professionals over a three-year period was $13 million. This includes money saved by using business simulation versus other methods, as well as the increased bottom-line contribution made by employees.

4. Description of a simulator

4.1 Components of a simulator

In general, each simulator will involve three main components:

This phase means "trying and flying the mission" i.e. pursuing the goal in the simulated environment. This simulation looks and feels like work, and enables learners to learn by doing; their actions result in realistic outcomes. However, this experience is risk free and, therefore, allows learners to freely explore. The environment also incorporates coaching and support.

Remediation - process of assessing and providing feedback to maintain or improve a learner's performance - can be delivered using direct feedback (using a tutor/coach) or indirect feedback (learner experiences real-world consequences/results during the simulation). The tutor identifies mistakes and provides on-the-spot coaching, which is customised for every learner.

Initiated by the tutor, the simulator will bring relevant Best Practices, Stories and "Lessons Learned" to the learner's attention, thus enforcing selected learning points.

The following describes briefly a typical session using a simulator called Marketing Strategies and Tactics. This simulator is part of a three-module series called Generate Demand which has been designed and built for Andersen Consulting's internal use. The goal of this approximately 4-5 hour simulation is to prepare consultants for assignments where they need to deal with marketing strategies and tactics. The case company used in the simulation operates in the consumer product market; however, the same principles apply mostly in other industries as well. The following picture shows the structure of the simulator.

Figure 1 - Generate Demand / Market Strategies & Tactics main menu

In the following, the modules of the simulator are briefly described. (These will be expanded on in a live demonstration.)

Intro - Market Planning Process - Assignment - Java House story

The introductory phases set the business scene with a series of videos and introduce the learner to his/her new job as a new Brand Manager for Java House coffee.

From now on, the learner is taken through a set of predefined phases which (s)he can only pass by developing and exercising judgement - and often doing plenty of research work. This can be done using the built-in knowledge system: the Documents and Ask Experts sections are always available on the screen.

Develop Business Objectives

In the beginning of the "job assignment", the learner will study Java House's market position and trends in the beverage market. (S)he must then decide on the overall business objectives to be able to continue the assignment.

Develop Product Market Strategy

Next, the learner will study further documents, hear more expert advice and, in the end, develop alternative product market strategies. These are then analysed immediately in the same manner as in real business i.e. through market reports, which enables the learner to use feedback effectively and correct any incomplete choices.

Develop Marketing Objectives & Develop Marketing Strategy

At the end of these two modules, the learner must create his/her marketing objectives for the next year and decide how to reach them in each quarter - by dividing the efforts between advertising, customer promotion and trade campaigns. These choices are not evaluated but will be used as reference levels in the final exercise.

Develop Marketing Tactics

The last module is where most of the learning takes place. The learner must select detailed marketing tactics for each quarter of the year, using an annual budget of 80 MUSD. The selection will include the following considerations:

• Select advertising copy Select advertising, promotion and trade tactics for each quarter within the budget; this involves carefully studying and selecting among a number of choices of newspapers, magazines, TV networks, supermarket campaigns etc.
• Analyse one quarter at a time based on feedback, make adjustments, and improve the model until it "fits" i.e. brings the budgeted revenues, market shares and profits.

The selection of tactics, submitting the choices and getting feedback is a very intensive process where the learner typically explores the various considerations of each tactic and compares those against the market situation. The feedback then comes in the form of several experts' views included in video clips. This is a powerful means of making the learner to analyse each choice (s)he's made. To succeed in the "mission", (s)he still needs to incorporate the various pieces of feedback into a holistic set of conclusions and tactical choices. 4.3 User experience and learning effect Going through this particular simulator is a captivating experience. The feeling of "getting inside the story" is very strong, and motivates the learner to strive towards the goal. While the first 1-2 hours of use are usually spent on studying the industry, and the company status, the latter 2-3 hours of making the tactical choices often engage the learner so that (s)he fully forgets time and space (writer's own experience!). In terms of learning benefits, a number of learning objectives are met at the end of the course. The learner knows how to select an appropriate product market strategy, develop a high level marketing strategy, develop and apply marketing tactics, and evaluate the feasibility of applied tactics and improve them accordingly. An interesting observation has also been that these learning experiences are rather strong, thus the retention and probability of applying the acquired skills in one's own work are also higher.

Conclusions

Business Simulations draw on basic adult learning principles, such as...

• People learn best when presented with information in context People remember situations that have unexpected outcomes and interesting storylines People make sense of new situations by applying previous experience
• People gain confidence when learning in a risk-free environment

Through simulations, professionals are challenged to respond with a deeper, more holistic view to problem solving. They are forced to address the root cause of the problem rather than just the symptoms. Based on increasing client experience, and some of the writer's own observations, Business Simulation is a promising instrument for top executives to induct their new employees, and reskill the existing ones according to changing demands in the workplace. It enables fast learning and better content than traditional methods and thus results in stronger ownership of new methods and practices. Due to the rather heavy design and development investment though the benefits are best realised when the user audience involves sufficient numbers of employees, or when the job to be modelled is a complex and risky one. Those companies that have engaged themselves in the rigour of modelling their core processes and best practices for simulator design will have realised another major benefit: the increased understanding of their core capabilities and thus competitiveness. The building of a simulator has often just initiated this work; nevertheless this has turned out to increase the company's understanding of its success factors significantly better than before.

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