Professor Carl Voigt, Academic Director for International Business Education and Research & Professor of Clinical Management and Organization at the Marshall School of Business, University of Southern California, shares some of his background in using business simulations, and describes his experience using Cesim Firm, our General Management Business Simulation, for an MBA orientation program with over 200 participants.
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What is your background in using business simulations?
Let me begin by admitting very clearly that I was a business simulation skeptic. I used simulations when they first came out and had a very disappointing experience. The students spent more time trying to guess the algorithm than trying to learn from it. So in teaching group meetings I would do everything I possibly could to badmouth the use of simulations. I have come complete 180 from that early experience. Most recently, we used the General Management Business Simulation in our first course in our MBA program. We bring in, in our professional and manager program, that's our part-time program, over 200 MBAs every year. And their first course, which occurs during orientation, requires them to get an understanding of business. And so this year, as an experiment, I decided that I would use a business simulation. Let me simply say it was a huge success.
What are the key objectives you wanted to achieve with the simulation?
At USC Marshall, in our MBA programs, we always bookend the core experience, the first-year learning experience with strategy. We do it right at the very beginning. It's the first course, and then we come back at the end of the year and we do another course to wrap it up. We believe it's important to give students a sense of the overall holistic view of a business, and putting in a simulation did that in a way that I have not been able to do with case studie s. We gave the students, in teams, an opportunity to run their own business. In terms of learning objectives, the purpose of using a simulation was to ask the students the puzzle about how an entire business works, not simply looking at marketing or accounting or finance, but how all the pieces work together, and offering them a simulation to, as it were, throw them in the deep end and have them struggle with numbers that they'd never seen before. They also had to manage their own teams, put in a team structure, have somebody responsible for being the overall CEO, somebody responsible for marketing, strategy, operations, provided them a microcosm of what a business would really be like. And I have found no other way to do that, as well as putting them in a business simulation.
What were the most important learning outcomes?
Unique to our program, this is a first course done in an intensive way, done over two weekends with two weeks in between. There wasn't a lot of opportunity to ask them to do a major report on their experience. So we asked them to give a two-page debrief. One, how well did they do in the simulation? What did they learn? And then each of the team members were asked to write a paragraph on their own learning from this. And it turned out to be amazing. The teams that failed completely had to own up to it, admit to their strategic errors. Many of them simply said, "We didn't know what we were doing. We tried this, we tried that and nothing worked." Other teams were confident that they'd pick the strategy, followed it through. But for me, the most important part of the simulation was asking the students about what they learned themselves, asking them to, in a few words, articulate how the simulation advanced their learning. Most talked about the complexity of business. They had no idea the difficulty of making these holistic decisions, thinking about cash flows, thinking about inventory, thinking about marketing decisions, pricing decisions, all in the context of aggressive rivals gave them a chance to think about how they really have to focus on learning the skills of business. The other part of that was learning to work in a team. They had to rely on others to fill in the gaps where they were, as it were, "ignorant" about different parts of business. And this gave them an opportunity to work in a very, very quick way to master some of these skills. One of the key advantages of using the Cesim business simulations is the way that they're set up. Even teams that make poor decisions in early rounds are engaged in the process. They struggle. Even the teams that failed learned a lot, because as they try to introduce corrective strategies, they saw that other teams responded to them or anticipated them and it gave them a real sense of what business is like. It's not just making decisions in a vacuum. It's making decisions in a world where other teams will anticipate and respond in ways that can make it even more difficult. And so the teams that didn't do well, actually in my mind, learned the most, because they had to figure out why they were not successful.
What were the main challenges you faced with implementing the simulation? How did you solve them?
For this particular course, with so many students, over 200 students, we have them broken into three cohorts. And putting them in teams meant that we have 13 teams per cohort, which meant that we had to create two industries per cohort, six industries at all with six or seven teams in an industry. That initially, for me, was a nightmare, and even had me thinking about not doing the simulation, but I reached out to the team at Cesim. They just said, "Carl, we will take care of it." From the backend point of view, it was the most seamless process that I could even imagine.
What advice would you give to someone who is considering to use a simulation for an orientation program?
What the simulations do is it gives students a real opportunity to manage a business, something that most of them will have to wait many, many years to do in a business situation. And so giving them the overall perspective, what we refer to in strategy as the general manager's perspective of managing a corporation as a whole, to me, is an absolute win. So if you're looking to replicate that experience to have people understand the holistic view of business, I strongly recommend that you consider using a business simulation.