Wheeling, dealing clues to success

By VICKI JAYNE

If you want to figure out how today's decisions might affect future company performance, try a dose of virtual reality.

Commercial pilots have long been able to practise their flying skills in a computer-simulated environment before being let loose on the real thing. Now aspiring managers can hone their business acumen in much the same way - but on bicycles.

"Mike's Bikes" functions like any medium-sized company with employees, factory, stock, shareholders, accounts - the works. It can also spit out all the financial or marketing reports you could wish for.

Major differences are that thousands of people can run the company - and that it doesn't really exist.

This particular bike manufacturer is a New Zealand creation designed to accelerate business learning through computer simulation.

It's now being used in some 60 universities worldwide, has been picked up by companies such as Nortel and Sun Microsystems, and is the central tool in what its designers, Auckland-based Smartsims, describe as a mini-MBA.

An MBA because that is the level of learning it is pitched at; mini because it takes just three weeks to get through, explains Smartsims founder Pete Mazany, an associate professor at the University of Auckland Business School.

"Given that time is a scarce asset for most companies these days, there is a market for learning business skills in a condensed, intensive environment," he says.

"This is a very hands-on way of getting the sort of business overview you need to operate at senior management level."

The idea is that the programme puts participants at the controls of a "real" company.

All the decisions that have to be made, from product options to distribution channels, or from business planning to market spending, are the same as those made in the real business world. So is their impact.

Make the wrong moves and you could find yourself with shrinking profit margins, plummeting share values, and facing being swallowed by a virtual business rival.

The game can be played solo against your computer, in which case the player can try out several what-if scenarios, roll the game forward to see how those pan out, and roll it back if they prove a disaster.

Or it can be played on a team basis against other teams. In this case, there is no roll-back option - the decisions made by today's management team determine the company's destiny.

All right for game-playing technophiles, you might think - but how does it translate to the real world?

Stefan Preston is executive director of U-Bix Document Solutions and operations director of the Cullen Group, which has put senior managers from several of its companies through the mini-MBA.

He admits to some initial scepticism, but now rates the programme as fantastic.

"We're using it as a sort of foundation programme for upskilling executives across the group. They get into groups and slug it out in a virtual corporate battle.

"It's a very intensive few weeks. In a high-pressure way they're learning all about how the business works and how to run their companies properly.

"I am amazed at how efficient this type of learning is."

It may be a game, but to play it successfully, you have to know the business theory that backs it, says Preston. The competitive factor gets adrenalin flowing and it all becomes very real to the participants. "One thing you notice is that everyone is very alive to the learning."

Discussion around what decisions are made is not confined to the virtual world but links back into real-life applications, says Preston.

While Smartsims provides the learning framework, the organisation proves its relevance to real-world examples as the game progresses.

The game acts as a centrepiece to accelerate the learning and get everyone applying the knowledge.

Because it's played on a team basis, there's no worry about ending up with executives who are very good at machine interplay but not so good with people, says Preston.

"You don't want to be distracted by the software. It's just a tool. It has exactly the same relevance as your work computer has.

"The business decisions are thrashed out in a team environment, then you just have to press some buttons to find out what happens in the market."

For another Cullen Group player, Craig Percy, the course provided a useful perspective on how various parts of the business interact.

It enabled him a view outside his own role as operations director for Eldercare.

"It's given me confidence to enter other areas of the business and talk about marketing or financial aspects and to take them into account in terms of operations." He also rated the game as a "pretty accurate reflection" of real-world business.

The simulation is based on extensive business modelling and the diligent digger can find all the data that informs its response, says Mazany.

Mazany's own interest in simulation was aroused while he was completing his doctorate in management science at Yale University, his destination after graduating from Auckland University.

He pursued the topic on return to New Zealand, forming VisionPlus Developments, which evolved into Smartsims (www.smartsims.com).

He has also helped to design management systems to support teamwork and accountability for Team NZ's successful challenge for the Americas Cup in 1993-1994 - a role he continues for the 2003 defence.

He believes using computer simulation as a tool to pull out knowledge when it's needed is a powerful adjunct to more traditional learning.

"Used in an environment where people are also learning from other members of their team, it is very effective."

* vjayne@iconz.co.nz