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 had the pleasure of addressing the Research Triangle Park chapter of the International Institute of Business Analysis (IIBA). My presentation (below) was intended to provide attendees with couple tools that many had never used: Causal Loop Diagrams, and Stock-and-Flow Modeling software.
Although I tailored my presentation to the Business Analyst audience, these tools can also provide improved insight and solution simulation in a safe environment to others across an enterprise; for example:
- Impact of different marketing efforts on sales
- Effect of competitive products and pricing on launch activities
- Meeting delivery schedules as demand changes
- Adequacy of after-sales support service teams
- Alternative strategies for business growth
I groaned when I first heard about The Three Rules, a book by Michael Raynor and Mumtaz Ahmed. Based solely on the title, I guessed it would be yet another popular business book that would rise quickly on the bestsellers list only to be replaced by the next such book off a never-ending assembly line of popular business books. The book certainly has the typical features of a best-seller toss-away, including a pithy title that suggests a prescriptive solution for companies that want to achieve “exceptional performance.”
Having read The Three Rules, however, I have a new perspective on the work. Chapter and verse reviews are available at Amazon (http://amzn.to/1dh0UyF) and elsewhere, so my comments below focus more on why I feel that this is an important book to add to your collection.