Imagine you are assigned to a team that will start and run a new venture for your company. You and your team are entrusted with funding to obtain a facility, manufacture products, hire employees, and market and sell your products. You and your team must decide everything from product pricing, to taking loans for improvements and paying expenses as you work toward the goal of building equity and net worth.
You make mistakes along your journey and in doing so learn firsthand why “cash is king” and how your venture can be profitable while tottering on the brink of bankruptcy. And while you and your team benefit from these valuable business experiences, you are never in danger of financial ruin or suffering the many other life-changing pitfalls of running a business.
Welcome to the world of simulation business training.
I recently attended a live training event as a participant in a simulated company like the one described above. The other attendees were skilled in their current roles but most had little or no training in or experience in finance or running a startup business. The others were attending the course because their company executives realized that the better their managers understood finance and business practice, the better business decisions they would make. What I witnessed and experienced included the three observations below.
1. Business Acumen is More Quickly Achieved Through Simulation Training
A primary goal of the simulation I attended was to learn financial basics by running a virtual company. As decisions were made, tokens were moved on a game board to reflect the movement of cash and noncash transactions.
The transactions represented on the board playing pieces were then translated into an income statement and a balance sheet, establishing a clear understanding of how financial statements “work.”
Well-designed simulation training like the one I attended enables participants to quickly learn financial basics from the very start while avoiding numbing PowerPoint slides and potentially challenging concepts like depreciation and cash flow.
2. Live Simulation Training Creates a Realistic Critical Thinking, Problem Solving, and Team Building Environment
Simulation training is often associated with a simulation software program where learners click buttons to make decisions and results are expressed in reports and graphs. While these tools can be useful, they lack a critical component — the human element.
In live simulation training, participants are required to work together in a team setting and to navigate a wide spectrum of human issues and emotions that arise from uncertainty, negotiation, and leadership — just as they must do when they return to their real company.
3. Simulated Training Benefits People of All Skill Levels
The Stoic philosopher Epictetus wryly observed, “It is impossible for a man to learn what he thinks he already knows.” Learning is lifelong nourishment that will die if you let yourself believe that you already know everything based on your prior training and experience.
I have been involved in various businesses from startups to international leaders where I created pro forma projections and then managed actual outcomes, earning an MBA along the way. I approached the training event with skepticism but my participation in the simulation was rewarding and insightful.
Simulation training brings academic knowledge to life in a close approximation of the real-world where the dynamics of the training design ensure an unpredictable outcome — just as in the real world.
Educational, entertaining, realistic yet safe — these are important facets that live simulation business training uniquely provides. Click here now to discuss how business simulation can benefit you and your company.