“Experience is learning. Everything else is just information.”

Einstein

Business simulation games and programs create a learning experience!

Most people agree that ‘experience’ is one of the best ways to learn. However, it’s not without its drawbacks. The biggest problem with learning through experience in business is that it takes years (sometimes decades)to learn key business and financial acumen skills. This can be very costly in terms of lost opportunities (e.g. unrealized margin improvements) or profit leaks where profit dollars just slip away on you in various ways. The other problem is that income statements essentially summarize thousands and sometimes millions of small decisions. This creates a problem because you never get to experience the effect of a single change.

Business simulations solve this problem because they enable you to experience the results of your decisions, experiment with different strategies and effectively gain years of experience in one day. You can implement a strategy and literally see the results one hour later.

However, not all business simulation games are created equal. Some do not let participants choose their strategy, set the pricing, make investments and manage other assets and liabilities.  In other words the facilitator effectively manages the tasks and tells participants what to do so they can control the outcome.  While this makes facilitating easier it’s not how the real world works. Therefore,choose a simulation that gives participants more autonomy in making decisions and implementing strategies.

Despite the benefits business simulation programs offer they should be viewed as just highly effective and engaging learning vehicles. The real key to success is the interpretation of results, the application of leaning and the connections made to your organization.

One of the challenges in developing business and financial acumen skills is that most people in business do not have a financial background. They are unfamiliar with financial terms, statements and ratios. Presenting content through traditional methods like endless slides does not engage people. People learn better when they’re having fun so consider using business simulations that engage your audience, make the learning relevant and then focus on how to apply the principles starting literally tomorrow.