Welcome to the age of the computer-enhanced business simulation, the latest trend in business training. The “serious games” industry, which has been building since the 1980s, is quickly becoming an important tool for teaching and learning at business schools worldwide.
Driving the popularity of business simulations is the fact that they do what case studies, class lectures, and onsite corporate visits cannot, say game designers. They plunge students headfirst into thorny business situations. In a real-time simulated business environment, students strategize, make tough decisions, and see the immediate consequences of their actions. Then, ideally, they learn from their mistakes.
“The Chinese have a saying: ‘When I hear, I forget. When I see, I remember. When I do, I understand.’ Gaming is learning by doing,” says Dennis Meadows, a Ph.D. graduate of MIT’s Sloan School of Management in Cambridge, Massachusetts. Meadows has been designing management simulations for 30 years. “The lessons students learn in simulations are ten times more efficient, more lasting, and more powerful than what they can learn from a lecture.”
The latest games are driven by technology; but they are not ruled by it, say game designers. The best simulated learning experiences, they argue, balance new-tech capabilities with old-tech mainstays, such as pencil-on-paper planning and in-depth group discussions on the lessons learned.
The Internet Connection
The design and capability of today’s games haven’t changed much in the last few years. While the latest technologies have made games easier to design, computer-driven simulations still have much in common with their low- or no-tech counterparts of the 1980s, providing students with business scenarios, a plethora of possible decisions to make, and uncertain outcomes. The most well-known simulation, the “beer distribution game,” developed by MIT professors in the 1960s, is still played on a game board rather than a computer screen.
What has changed simulations most significantly is the world around them, says Dan Smith, president of Management Simulations Inc. in Northfield, Illinois. MSI is the maker of three simulation products, including Capstone, Foundation, and COMP-XM. Also an adjunct professor at DePaul University in Chicago, Smith notes that today’s faster Internet connections and relative technology parity and consistency among business schools have made possible larger simulations involving more diverse, geographically dispersed student teams.
“The lessons students learn are ten times more efficient, more lasting, and more powerful than what they can learn from a lecture.”
—Dennis Meadows, management simulation designer
“A decade ago, we could create applications to bring players together across time and space, but it was clumsy. The bandwidth wasn’t there,” says Smith. “In recent years, bandwidth has gotten broad enough to enable students to collaborate more easily from a distance.”
In fact, the technological capacity and power of today’s computers can be almost too tempting for game designers. There is some concern that business simulations could turn into “virtual realities” that players inhabit like a video game. But such technological complexity often takes too much time for a professor to implement and distracts from the business problem the game is designed to present, says Meadows.
“I can design a game today ten times more quickly than I could 30 years ago; but do people learn more from today’s computer-driven games than they did from those 30 years ago? I don’t think so,” says Meadows. “Computer technology can take over the game and make it so complex that it diverts learning.”
Smith agrees that the best games are based on tools that organizations actually use to conduct business. “Students aren’t going to play a video game at the office,” he says. “In a simulation, we want students to use the same tools that they’re going to use in a real-world office: Excel, the Internet, e-mail, videoconferencing. It’s central to simulation design that we don’t rely heavily on graphics.”
While many of today’s most popular games focus on data-based areas such as supply chain management and marketing, “fuzzier” issues such as ethics, change, and corporate social responsibility can also be captured in a real-time simulation. However, the success of the outcomes may be more difficult to quantify, explains James Chisholm, co-founder of ExperiencePoint, a simulation design company based in Mountain View, California.
ExperiencePoint’s change management simulation takes players through a scenario in which they must learn the agendas of a company’s employees and amass support for a new strategic plan.
One simulation that ExperiencePoint offers to executive training programs focuses on the complexities of change management. Their objective is to move a struggling company in a new direction by choosing among 50 strategies to persuade employees with disparate agendas to buy into the new plan. The simulation assigns each employee one of four personality types—resister, bystander, helper, or champion. It measures each team’s success in amassing critical support by how well its simulated employees react to the strategies it chooses.
“Many people believe business simulations are all about financial statements and quantitative data,” says Chisholm. Games also can help students learn the soft skills in business, he adds, such as those related to communication, team-building, and change management.
Tech in Perspective
The most important part of the learning process may happen outside the game. Faculty who use simulations must provide the learning context to make the simulated business experience valuable, says Meadows.
For example, the well-known game “Fish Banks Ltd.,” which Meadows designed, challenges students to run a fleet of fishing boats profitably without overfishing the ocean. Translated into 12 languages, Fish Banks has been played by students from all over the world. “I’ve seen people kill off all the fish and be quite satisfied with their profits. I’ve seen others kill off all the fish and be ashamed that they got so caught up in the game that they didn’t sustain the fertility of the ocean,” says Meadows. “The game generates data; it gives them a shared experience. But if you want to teach corporate social responsibility, that’s not in the game.”
To be a successful learning experience, a management simulation must be followed by discussion—or “a debriefing,” says Meadows. Through a debriefing, players can ask important questions: Where were they confused? What decisions did they make? What was the outcome? Could they change the game to have a more satisfactory result? Where do they see these phenomena in real life? “I haven’t seen a game yet where people play it and automatically internalize the lessons,” says Meadows.
Chisholm agrees that simulations do not stimulate learning on their own. “Computer-based simulations throw a problem out there and provide a sophisticated model of play; but at the end of the day, the game is a mechanism for conversation among four or five colleagues,” he says. “It provides a shared experience and common language to discuss an issue. The intelligence isn’t in the game. It’s around the table.”
Evidence of Learning
Simulations not only stimulate learning; they also may provide evidence of it. MSI is currently beta testing COMP-XM, a simulation for learning assessment, which will be released to the market this fall. COMP-XM also may be used to provide assessment data useful for accreditation; the company plans to meet with representatives of accrediting bodies to refine the game for that purpose.
“The intelligence isn’t in the game. It’s around the table.”
—James Chisholm of ExperiencePoint
“The first time students participate in a simulation, it’s a lab. They’re learning from their mistakes, so the game can’t be used to evaluate their skill level,” says MSI’s Smith. “But the second time they participate in that simulation and answer questions about their decisions, on a standardized playing field, it’s a test of competence.”
For Meadows, the real test for students is what they do with the knowledge they gain through simulated experiences. “The last step for faculty is to get a commitment from students that they’re going to make changes based on what they’ve learned from the game,” Meadows says. “There’s no point using a simulation to generate insight if the students aren’t going to act on it.”
Implications of Simulations
Professors who are interested in doing more with serious gaming can look forward to new products that make it even easier to bring simulations into the classroom. Soon, says Chisholm of ExperiencePoint, they will have the technology at hand to create their own games, in much the same way as they would design their own Web site using a Web publishing program.
“The question we’re asked the most is, ‘Do you have a game in this discipline?’ Up until six months ago, we would answer, ‘We can build that game, but it will cost a lot of money!’ But we’re now redesigning the engine to allow professors to create their own games, in a do-it-yourself model,” he says. ExperiencePoint plans a soft launch of its game publishing product in August at the Academy of Management’s 2007 Annual Conference in Philadelphia.
The biggest advantage of management simulations may be their impact on business students. Few experiences offer students such immediate insight on their strengths and weaknesses. When done right, simulations cut away the busywork that can accompany business transactions and put key issues in sharp relief, says Meadows. “With computer simulations, players don’t have to calculate depreciation rates. They can focus on the key issues, the crucial aspects of their role in the game.”
In the realm of serious educational games, say Meadows and other game designers, the term “simulation” may be a misnomer. The game itself may be simulated; but the lessons students and faculty take away from it are often real, insightful, and long-lasting.