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Learning and changing via business simulations

The core is: flexibility, relevance and realism
by: Abram Janse

Almost anyone can drive a car but there is only one fastest route to Rome, and that is the most logical one. Pulling right up to the car in front at traffic lights is illogical, because what happens if it breaks down? You have to reverse (if there is room) and then go forward again. If you accelerate to get through traffic lights on time, you will need to brake hard if the lights turn red, and that is illogical. It is a waste of fuel and brake pads. Most road users apply the logical knowledge of driving, which they have been taught during driving lessons, in an illogical way in practice. We learn tricks to help us pass our test, and then fail to put them into practice.

Compare this situation with how people work in your organisation. Its a pity about the logic, but the (refresher) course, the master-class and the certication for the best, correct and most logical working methods often do not lead to the intended success on the work oor. In practice, we apparently struggle to properly unite logic and behaviour. Training exercises and the daily situation are too dissimilar, partly due to behaviour and views being poorly linked, if at all, in most training and education courses. The situation changes when you bring the exercises closer to the practical situation, and evaluate the progress more often, as this strengthens the relationship between views and behaviour. Complex forms of communication are sometimes required, because of our reality also becoming increasingly more complex. Classic teaching methods simply fail to come up to scratch within these dynamics.
Three factors The use of business simulations can help strengthen the link between views and behaviour. Natural behaviour is demonstrated in the simulation, while at the same time requesting the motivation for that behaviour. Business simulations ensure a link between what people actually do and what they claim to do.

Simagine Business Simulations Simagine has been specialised in support of change processes in organisations and enterprises for more than seventeen years. We apply self designed business simulations in order to help realise such changes and to make them concrete. The simulations have proven to be extremely effective. They not only facilitate the discussion of required behaviour but also actually put it into practice. We are experienced coaches, and confront the participants as a team (but also individually where necessary) with their behaviour and manner of communication. We then provide insight for all involved, regarding the effect this may have. We subsequently supervise the group in nding (their own) answers to the questions: How can the situation be improved? How shall we achieve this?

About the author: Abram Janse is active in the Game Expertise Centre at Simagine. He gained his Master title in Implementation and Change management at the Open University in 2011. His specialist subject was: The use of business simulations in change processes. He is currently developing an evaluation model for training, for Simagine, which focuses on the use of business simulations. This concerns action based research, whose results must be useful for management and organisations.

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Learning and changing via business simulations

Awareness of any discrepancies between thinking and doing can be a good start for successful learning and change. It is also important to know what drives employees to optimally deploy their cognitive and creative skills. Various studies come to the following conclusion: People work hard when faced with the need to survive (motivation 1.0). The threat of dismissal or the promise of bonuses makes people work harder (motivation 2.0). It has now become apparent that this latter model only works well for simple repetitive tasks, such as in an industrial setting. It has a negative effect on intrinsic motivation however. When creativity and quality are required, the bonus is negative for the employees effectiveness. There are three factors which stimulate employees to work in an intrinsically motivated and effective manner (motivation 3.0): autonomy, mastery and meaning (RSA, 2010 and Pink, 2013). Autonomy refers to leadership through example and self steering principles. Mastery is the strive to perform tasks perfectly. And meaning refers to the requirement that work must be seen to be relevant to people and society. In brief, the presence of a connective purpose (meaning) is a deciding factor for success at the organisation level. The same applies to the feeling of we can do it, that there are sufcient possibilities and that the right skills can be developed for that purpose. Following on from this section, we can clearly show that business simulations can play an important supportive role in learning and change. This only works if important preconditions have been met. In more than eighteen years of developing and implementing business simulations, our experience is as follows. When it comes to the learning results for individual participants and the change results of the organisation as a whole, the core is formed by the concepts of Realistic Relevant - Flexible.
Quality Simagine develops business simulations which are not only exible but are also relevant and realistic. Thanks to the three key concepts, the simulations have an effect on the learning and change situation in question. The business simulations are exible enough that they can even be adapted to the participant group while being enacted. They are relevant enough for specic subjects in a recognisable organisation environment. And they are realistic, so that participants can make the transfer from the business simulation to their daily reality. In the end, the learning results for the individual participants and therefore also for the organisation, depend on the quality of the implementation programme and the quality of the coach.

Concepts
Please pay attention to the interpretation of terms such as serious games, business games, business simulations and gamication. We should note that while all business simulations can be regarded to be serious games, not all serious games are business simulations. We shall limit ourselves to the use of a number of generally used descriptions of the business simulation term. The game aspect of these interventions refers to the human component and the freedom of choice for participants actions. The simulation aspect refers to the model based manner in which the reality is portrayed. Business simulations offer a simulated but simplied reality in order to offer a controlled experience. There is a simultaneous dialogue which inuences the continuation of the game. Participants play themselves within a framework of roles, rules and targets. Activities, interaction, decisions and results form the relationships between these roles, rules and targets. The time frame is either stretched or shortened in order to stimulate the learning targets and to visualise the effects of behaviour. A balanced and safe environment provides the appropriate amount of effort to become in ow. It also offers the relaxation necessary for free experimentation.

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Learning and changing via business simulations

Methodology A number of steps are followed, from idea to nal design. The organisational reality is rst mapped out in a meeting with the client. The playing eld and players are then identied, using a so-called actors model (see gure 2). This provides insight into how the process works in the organisation. We then lend meaning to this organisational reality by dening the relationships between the various actors. It is important to apply the correct level of abstraction in doing so, in order to develop a relevant and realistic simulation. In a following step, a game concept is devised, with tasks, tools and rules. This is followed by validation of the concept versus reality and the meaning. In other words: is the design still in keeping with the actual process and are the options exible, relevant and realistic enough? Tests are then carried out, with a repeat of the above steps if necessary, until the prototype is correctly calibrated for optimum learning. Motivation 3.0 We referred to Motivation 3.0 in the introduction. It involves three factors designed to help employees perform their work in a motivated and effective manner. These are 1) autonomy, 2) mastery and 3) meaning. The business simulation design offers an environment in which participants can work to reach a common target (meaning). We have chosen a layered construction in developing our business simulations. We distinguish between a layer of tasks carried out by participants, a layer of problems experienced by participants (in which mastery is achieved) and a layer of solutions with which participants can experiment (autonomy). Implementation and coaching We have already referred to the quality of the implementation programme and the coach. These two factors determine the learning results for the individual participants and therefore the results for the organisation. It is essential that the transfer from a business simulation to a coach or supervisor takes place with extreme care. The supervisor must be capable of making the right choice. He must be able to determine precisely which business simulation he uses in a specic context and target group. This must be in line with the subject and with the learning and change targets, of course. He must also be able to determine the point of the process where the business simulation best ts. All situations are unique. A particular learning style may not be the optimum choice for all individuals, for example. The programme must therefore be aimed at dealing with the learning and change targets of participants with various learning styles. In order to achieve this, we use the Kolb learning cycle and relevant learning styles as the starting point for composition of the implementation programme.

Figure 1: Schematic representation of the link between game design, implementation and learning results for the participant and the results for the organisation.

Figure 2: The actors model describes all those involved at their job level, and all the relationships between these actors in terms of input and output.

Figure 3: Steps in the game design

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Learning and changing via business simulations

The game cycle According to Kolb, creation of knowledge is the target of any learning process. The learning cycle shows the preference of people with various learning styles. When translated into the game cycle in a business simulation, this works as follows: The participants start work on a business plan and thus enjoy concrete experiences. The results and experiences from this games round are the subject of reection. What happened and why? What did you think of your own role? How can you avoid the weak elements and promote the good ones? The experiences and points of reection are then placed in a more general framework. What does the theory say about this? What can you say generally about the problems experienced? The nal step in a round is the planning phase. The participants come to agreements with each other in order to improve the results, cooperation and communication in the following round. Participants can be left to do so independently, but steering is also possible by applying existing solution methods or best practices. The following round then begins, in which the new working method is tested. The number of rounds is between three and ve.

Figure 4: Kolb learning cycle including learning styles

It is very important that the game cycle is completed three times. Some researchers even advocate four to ve times, in order to give permanent results (De Caluw, 2002). The reasons for repeating the game cycle a number of times are: This deals with all participants, with their different learning styles. It brings what people claim to do and what they actually do, closer together. It helps participants in gaining mastery of their learning targets. They learn that their skills and knowledge are less than expected (consciously incapable). They then work constructively at success and at the insight that successful action can still be taken even in the event of adversity (consciously capable).
To flow or not to flow Business simulations are a means with which to communicate. They are an excellent tool to enable a simultaneous dialogue (multilogue) with the purpose of achieving broader understanding of a subject and tasks. Business simulations intervene in the level of reality (simplication of reality) and time perception (acceleration or delay), so that participants master specic learning targets. The implementation of business simulation is the responsibility of the supervisor, who acts on the basis of his own style. In many cases, business simulations are deployed in order to visualise participants behaviour and consequently to reect on it. This can be done in various ways, also when it comes to choosing reection moments.

Figure 5: The game cycle

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Learning and changing via business simulations

Some coaches believe that participants should become completely immersed in the game, without being distracted during the process. These coaches attach great value to the ow concept. The best learning results can be achieved when in the ow is their motto. We believe it very important, on the other hand, that participants are taken out of the simulated reality after each round, in order to establish the link to their practical situation. The ow is interrupted for periodic reection. We can then ask questions such as What were you doing during the simulation? How could you apply that solution in your organisation? Participants must be given the opportunity to discover the overlap between the business simulation and the reality in their organisation. This unites what people claim and what they actually do, which improves the results of the business simulation.
Feasible results Whatever style the coach applies, it is important that clients are made aware of the feasible learning and change results to be achieved via business simulations. Simagine has formulated a transfer plan for this purpose, which enables visualisation and safeguarding of the results of each participant and at the organisational level.

Figure 6: the process towards mastery

Figure 7: Transfer of knowledge

The transfer plan indicates that learning is a step-by-step process, which begins with a new experience being gained by means of a business simulation, for example the simulation of a future working method. During implementation, the business simulation works with new concepts and theories to be learned. In transfer A, the theory is explained and tested. This theory is then applied to general situations and to situations which occurred in the business simulation. Transfer B entails testing of whether participants have sufcient know-how to be able to recognise and apply it in practical situations. They are then ready to work more effectively as soon as the new working method is implemented, thanks to the new experiences, knowledge and skills.

Gaining mastery Mastery is gained via a cyclical transformation process from unconsciously incompetent to unconsciously competent. This process takes time, but can be accelerated by repeating actions and evaluation often. Business simulations are very helpful in awakening consciousness of unproductive behaviour and the automation of productive behaviour. There are advantages to unconscious choices. They are made more readily for example, and people are subsequently more satised. Moreover, unconscious choices are often more correct than rationally considered choices in the case of a complex situation, with the same knowledge beforehand. Without the necessary knowledge, unconscious choices can be incorrect ones however. While a decision is taken more quickly and more satisfactorily, there is a real chance that the choice was not the right one. (Dijksterhuis, 2005). This transformation process has an own valley of despair (see Figure 11), in which the participant is aware of his lack of knowledge and the need to work hard to gain and master more knowledge.

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Learning and changing via business simulations

Engagement, knowledge and capability Let us assume that the game subject has been well designed and is sufciently exible, relevant and realistic. The business simulation is also well embedded in a learning or change process, and is implemented well by the coach, appealing to all learning styles. This is the basis upon which organisations can change and learn. At whom is this aimed? ` Simagine offers support to organisations who wish to work at increasing their motivation, knowledge and skills. We have operationalised the principles of Motivation 3.0 into engagement, knowledge and capability. This can be rendered concrete per client. We can steer in terms of increasing motivation to actively participate in a change process (engagement). We can work to increase knowledge regarding the imminent change (knowledge). Greater experience can also be gained with specic change elements, by practising them beforehand (capability). Skills With regard to the knowledge and capability, we often aim at the following participant skills: Process awareness: to what degree is the participant aware of the processes and developments in the organisation and its environment? Awareness of the working environment will result in a more adequate reaction to customer needs and to (unforeseen) problems. Process based working: to what extent is action undertaken on the basis of role distribution, targets and chain based thinking? This includes translation of proactive behaviour and process awareness into correct actions. Customer orientation: to what extent is action undertaken from the point of view of attention for customers and quality levels? Think in terms of determining the customers needs and actually offering solutions. This may not be in line with process based working, because a role of working process has limitations which are of little interest to the customer but which can be restrictive in terms of offering solutions. Cooperation: to what extent is there a team effort, and working together within and outside the team? For example: What can you do if you are restricted by your task package but the customer requires a total solution? An exponent of this is the fusion capacity, leadership.

Figure 8: Operationalisation of Motivation 3.0 into engagement, knowledge and capability

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Learning and changing via business simulations

A look at a business simulation In order to illustrate the subjects referred to above, we shall give a number of examples from the Control-IT business simulation. This simulation is based on the blueprint of an IT service management organisation, represented in a metaphor. The metaphor takes place in the logistics environment of a global port and can be described as follows:

The examples:
The customer has contacted the service manager due to a problem. He thinks it is taking far too long to nd a solution. The service manager agrees that it is taking too long, and decides to intervene in the incidents process. From a process based point of view, this is wrong. The service manager is personally helping to nd a solution. It would be better for the service manager to request the status of the incident from the customer service department. This shows the eld of tension between the customer oriented approach and possible cooperation. The help desk calls the malfunctions specialist with the request to provide a solution for a problem. The specialist sets to work directly and presents an adequate solution after a period of time. In the end, there is insufcient budget for this specic maintenance and the changes made are inadequate. It is apparent that the specialist has provided more service than was covered by the contract. This was certainly a customer oriented approach, but improvements are required in process based working and in cooperation/consultation. Following the earlier experiences during rounds one and two of the business simulation, agreements are reached on priorities and the incidents process. A pitfall lies in simply asking the customer about his priorities. After all, there must also be contact with the production employees, the problem solvers. This concerns process awareness and cooperation.

Mainport (client) has contracted out the storage, distribution and supply of parts and the maintenance of the rails to Logistic Services (service organisation). Logistic Services offers 100 percent service 24 hours per day, 7 days per week. The well-trained and extremely motivated employees are able to translate customer wishes into efcient solutions without losing sight of exibility. Mainport and Logistic Services are ctional companies of course, the tasks are not real, but the problems closely resemble those encountered by an IT Service management organisation on a daily basis. And these are precisely the problems which deserve further attention. Figure 9 shows the results of the analysis according to the actors model referred to earlier. The gure shows which roles are included in the business simulation. The activities in the business simulation provide participants with experience and insight into various processes. The main processes of the business simulation are: availability of parts, solving malfunctions, solving structural malfunctions, implementing changes, entering into contracts, collection and payment of fees.

Figure 9: Results of the analysis according to the actors model

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Learning and changing via business simulations

Learning methods: experimental versus classic

Unlike classic learning by reading or listening, business simulations make demands of an individuals creativity, decisiveness, integration of various information ows, problem solving, risk taking and interpersonal skills. Business simulations therefore have the potential to develop both knowledge and skills (Lee, 2010; Thorne et al., 1999; Cadotte, 1995). TNO has conducted research into the effectiveness of business games versus classic learning styles, at a number of universities. Simagine participated in this research with the Ease-it business simulation (TNO, 2013). The conclusions of this research indicate that learning by means of business games is generally more effective than classic learning methods. This was particularly apparent for factors directly related to the engagement, knowledge and capability of participants. These results were derived from self-assessment and from knowledge and competence tests. The self assessment is related to self efcacy, which improves learning results. Self efcacy is the belief in ones own abilities, and the conviction of being able to deal efciently with any given situation. Business simulations have a positive effect on the autonomous approach, motivation and active learning. In other words, the learning process is more effective. The graph shows the specic results of learning characteristics following deployment of the Ease-it business simulation. The engagement and learning targets (knowledge) are shown to be more strongly improved using the business simulation when compared with classic learning methods. Participants also experience a greater degree of autonomy, more useful feedback and more effective cooperation, which enables them to (be able to) perform better.

Figure 10: Ease-it results in TNO research

When to use business simulations? The context within which the change takes place (Homan, 2008), where the acquired knowledge must be put into practice, is regarded to be the working field for our business simulations. This allows assessment of the success and failure factors of the proposed changes. Vision and strategy are shared in an appealing manner and employees are actively involved in innovation of the organisation. Business simulations are enacted in order to facilitate organisational changes. We can distinguish between various moments in time which are extremely suitable for the deployment of business simulations. 1. The first moment is when the plans are made - what is the nature of the change and what will it influence? We want to react more adequately to our environment but how can we generate an innovative culture? 2. A second moment is directly before the change is implemented - how do we get a head start and how do we ensure a positive experience for our employees? How can we clearly show the intention and the purpose of the change? 3. A third moment is during the change - weve been working for a year now, but the process has reached a stalemate, how to proceed? Which buttons need to be pressed, and exactly how in order to achieve success.

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Learning and changing via business simulations

The transition curve The transition curve becomes attened through intervention with the aid of business simulations. Awareness, acceptance, testing and integration may already take place before the actual change. The dreaded valley of despair is then no longer as deep and hopeless.

Figure 11: Transition curve with the valley of despair

At the organisational level, the deployment of business simulations leads to a number of important results. Those involved have greater insight into the situation as a whole, and therefore better understand the context within which change takes place. The use of the business simulation allows participants to follow training in the future organisation, as it were. They have experienced success in the context of the business simulation, and that results in self efcacy with regard to the change to take place in the organisation reality. Finally, experience has been gained in the mobilisation of knowledge, by learning from each other within the context of the business simulation. These targets (Wenzler, 2008) touch directly on the effect of business simulations on the engagement, knowledge and capability of the participants. Finally, we should note that the results of business simulations need to be safeguarded within the organisation. Appropriate preconditions must be in place in the organisational reality, in order to actually arrive at change. Once the lessons learned from business simulation have been formalised, employees have the space (autonomy) required to match their reality to the organisational reality. This stimulates motivation and further learning (mastery). It is also important to clarify the communication on the role played by the business simulation within the planned change, and the purpose of these two (meaning). These conditions are based on the concept of organisational decay described by Mastenbroek, 2006, among others. When there is no room for formalisation and adequate communication, employees may learn a great deal but their new-found knowledge will not take root.

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Learning and changing via business simulations

Credits & Review

We thank the following partners of Simagine Business Simulations: Erik Stroek, Maarten Versteegh and Herman van der Bij.

Literature sources
Caluw and Stoppelenburg (2002): Gaming: een krachtig leermiddel. in HRD magazine, themanummer Het vak trainer, nummer 03, 2002. Dijksterhuis A. & Olden Z. Van (2005) On the benets of thinking unconsciously: Unconscious thought can increase post-choice satisfaction. Journal of experimental social psychology 42 (2006) 627-631. Homan T. (2008), de binnenkant van organisatieverandering. Kluwer, Alphen aan de Rijn. Kolb, D.A. (1984). Experiential learning. Experience as the source of learning and development. New Jersey: Prentice-Hall, Inc., Englewoord Cliffs. Lee, A. (2010). Simulation Games: Shifting from Conceptual Learning to experiential learning. University of Hertfordshire. Thorne, L.D., Farrell, L., Montuori, L. and Willems, C. (1999) The use of a behavioural simulation to teach business ethics. Teaching Business Ethics. Vol. 3, No. 3, pp. 28396. In Lee (2010). Cadotte, E.R. (1995) Business Simulations: The next step in management training. The Magazine of the Graduate Management Admission Council, Autumn. In Lee (2010). Mastenbroek W. (2006), Cynisme en organisatierot bij verandering: de donkere kant van organisaties, Verandermanagement webforum, 12 september 2006. Pink. D. (2013). Drive, de verrassende waarheid over wat ons motiveert. Business contact, 5e druk, 2013. RSA Animate (2010). Online! Drive: the surprising truth about what motivates us https://www.youtube.com/watch?v=u6XAPnuFjJc&feature=player_embedded [QR-Code.png] TNO (2013). TNO-rapport Effectiviteit van serious gaming in het onderwijs. TNO 2013 R10415. Wenzler, I. (2008) The role of simulation games in transformational change. In Kritz, W.C. (ed.) Planspiele fr die Organisationsentwicklung. Berlin, WVB.

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