Business Simulation Game
Every company wants its employees to have the ability to understand how their productivity and decision-making affect the bottom line, but not everyone has the time, inclination or ability to finish an MBA. So William Kay, consultant, Center for Business and Technology, has made a game out of it – literally.
Kay has developed a board game entitled “The Business Simulation Game: How Business Really Works” so non-accounting types understand the world of business and finance.
“Every business wants its employees to have some amount of financial acumen,” Kay said. “This game provides the necessary steps to do that.”
The game is played with tokens, dice, chips, cards and a degree of chance, just like that famous other finance game: Monopoly. However, unlike Monopoly, the decisions are made as a team, not individually, and the outcomes are shared, whether profitable or not.
How is the game played?
Each participant is given a role in a new business. From a pile of chips that represents money, players supply an initial investment, buy equipment, set a margin of profitability and then start rolling the dice.
One key element of the game is “transaction cards.” Similar to Monopoly’s community chest or chance cards, the transaction cards instruct the player. However, these transactions aren’t as simple as moving a token or paying a luxury tax. Instead, the team must weigh the decision to be made. Should the company expand its workforce? Should it fix broken but outdated equipment? Decisions will ultimately affect the bottom line, just like in real life.
“As a team, the majority rules. Everyone has an equal stake in the business. Everyone gets a vote,” Kay explained.
Along the way, the participants must track expenses and income using a cash-flow statement. They also learn about the costs of goods sold, overhead, principal and interest, debt load and all those other words that seem like a foreign language to the non-financially inclined.
“After our training, lawyers, engineers – people who haven’t studied this stuff – can understand financial statements. Most people pick up end-of-the-year reports and end up looking at the pictures in the front because they don’t understand the rest,” Kay said. “After playing this game, they can understand.”
Kay has been working on the game for 15 years and has facilitated sessions with Siemens, Garmin and Pepsico, among others.
Kay even has a capability of customizing the game to reflect the company’s business plan and inventory line.
The easier and more concrete Kay makes the game, the more likely his players are to understand the inner workings of business.
How do players know if they’ve won? At the end of four “quarters” of play, the end-of-the-year balance statement needs to reflect the achievement of the team’s financial goals. Just like in real life, a business can have a good year or a bad one based on a combination of decision-making and luck.
“People start seeing how all this works,” he said. “We ask them what they expected to happen, then what really happened…and then the third W is why. Why the difference? The last W is, What are you going to do to change it?”
Ultimately, though, the real measurement of success is in the process of learning about business. But having a nice pile of chips (that’s cash, remember) is a pretty great feeling, too.“The evaluations have been great,” Kay said. “Companies love having a game to teach these concepts.”