Darwin showed that animals which adapt survive. He also recognised that the direction and the pace of evolution was determined by changes in the environment. As businesses evolve, a market downturn or credit crunch can pose similar threats. The challenge is not whether to adapt but what, where, when, why and how - and that's where simulations can make a unique contribution. There are four basic types:
Bespoke simulations address strategic decision-making on time-critical and sensitive issues. These are extremely powerful but the demands on management time mean relatively high costs. Consequently, they are more often used by the larger organisations.
Specialist business simulations focus on a specific aspect of a business, such as marketing strategy, financial analysis or project management.
Generic simulations are designed to broaden awareness of business principles and basic cause-and-effect relationships. Applications range from team-building to creative problem-solving. While these can be just as expensive and time-consuming to develop and test, their wider range of applications allows these to be spread over a much larger number of events over a longer period, making them highly cost-effective.
Holistic simulations bring together all of the primary functions of an organisation. This helps deepen understanding how a decision in one area produces consequences in another.
Business Games are both generic and holistic. A typical challenge is to turn round an under-performing company in a highly competitive market, with several years’ experience condensed into a few hours. The economic climate is unpredictable, just as in real life.
Each management team determines its own strategy and sets its own policies. The more diverse the background, personalities, skills and cultures in a team, the more likely it is that assumptions will challenged and that new answers emerge. Initially, the will to win motivates adaptability. As successes accumulate, the process of seeking continuous improvement becomes a deeply-embedded commitment.
As simulations eliminate the delay between decisions and consequences, the rate of acquiring knowledge and experience is dramatically increased. Since each individual has just one internal set of behaviours, the initial response in a simulation is identical to that displayed in real life.