Learning professionals have long known of the power of gaming to assist learning programs in delivering more engaging experiences, higher retention rates and better reinforcement of the workforce behaviors needed to execute business strategy. Simulation games in support of workforce effectiveness can be fun, but they also are serious business.
However, even as learning executives are expanding their use of gaming as an effective means of knowledge transfer to employees at all levels of an organization, they also should consider the power of simulation gaming to support higher-impact strategic areas. Because simulations can model complex organizational and market systems, they also can be a means of knowledge creation about how markets are developing, the strategies a company should pursue to drive high performance and organizational and workforce capabilities needed to execute those strategies effectively and cost efficiently.
Obviously, these are games that go well beyond entertainment value. By helping senior executives better understand their companies, simulations can become an essential tool for competitive advantage.
Workforce Effectiveness Simulations
Gaming gets increasing attention today in part because more gamers are entering the workforce with expectations for online learning experiences. According to Peter Butler, head of learning for telecommunications company BT Group, “With the younger generation in particular, it’s important to attract such workers with the kinds of technology they’ve come to expect, including simulation games and Web 2.0 capabilities.
“Those applications are part of an overall mix of learning experiences we’re pursuing depending on who is doing the learning, what their responsibilities are and what kind of learning can help them become productive the fastest and most cost effectively.”
No one has to tell gamers there is an inherent learning component to games and simulations. Whether it’s a single-player racing game or a multiplayer online role-playing game such as “World of Warcraft,” a learning process is involved. The gamers — or learners — attempt to meet a goal, succeed or fail, learn from their progress or failure, and adjust their strategies.
In a corporate setting, simulation games place workers in a realistic performance environment —on a computer or, increasingly, over the Web — and allow them to practice and even make errors, all in the name of advancing their skills and competence more rapidly.
In a challenging economic environment in which organizations must rapidly skill and deploy workers to areas where they are most needed, simulations offer an efficient and effective approach to develop workforce skills while also containing costs. Butler noted that companies leveraging learning providers to contain costs also should look to those providers for innovations such as simulations.
“I’m adamant about tapping into innovations wherever they come from, as long as they contribute to the overall goal of driving better business performance from learning,” Butler said. “Sometimes you need to engage external organizations to keep you aware of new trends in the learning marketplace.”
Simulation-based learning experiences can result in the increased effectiveness of critical workforces. Performance simulations can result in a significantly higher retention of content than traditional classroom learning. Compared with traditional classroom learning, simulations help participants master content and new behaviors 40-70 percent faster. In some situations, a performance simulation can reduce the time needed for new employees to reach a level of competent performance by 80 percent.
Speeding workers to competency means business results can be delivered more quickly. For example, GE Money, the financial services unit of GE’s global enterprise, used simulation-based learning in support of an organic growth strategy, equipping its customer-service workforce to be more effective at cross selling to existing customers. Developers began by analyzing the behaviors of its top sellers from around the world, identifying the key behaviors for successful cross selling and defining a sales model that could be replicated across business lines.
Based on this design, the team created an interactive, Web-based simulation that placed the learner into a realistic performance environment using simulated customer conversations. The learner was challenged first to resolve the customer’s needs and then to appropriately transition the conversation to cross-sell solutions based on the customer’s specific needs. To aid learning, the simulation tool also included a virtual coach to provide feedback at each step and access to expert stories and reference topics.
Similar simulations can support manager-level employees. German railway company Deutsche Bahn, for example, employed a simulation solution to help its cost-center managers — whose backgrounds were primarily in engineering — acquire the financial management skills that would increase their entrepreneurial capabilities. During the course of the simulation experience, participants engaged in increasingly complex role-playing, helping them manage events and perform operational and planning activities similar to actual situations encountered on the job.
Simulations provide an important capability to perform “what if” analyses. They are, in effect, a representation of the complex web of cause-and-effect relationships in the particular environment being modeled. The human mind has a difficult time tracking multiple interactions, where one action may have an effect on parts of the system, each of which then affects 10 more things, some of which loop back and cause additional changes to some of the prior influencers.
A simulation of the marketplace in which a business works can therefore be an important organizational learning tool to guide business-critical investments. Consider the telecommunications industry, which is undergoing enormous change driven by new technologies and network infrastructures. Before a company invests millions into something such as fiber optics, it wants to know what return it might realize from the investment and on what timetable.
Predicting performance of a business based on a new fiber optic infrastructure would be difficult using more traditional forms of market analysis. The environment is quite complex, incorporating a large number of connections in a short time frame, many interdependent business processes and a complex IT architecture.
A dynamic business simulation and planning tool developed for this environment gives a company insight into future performance under a range of possible rollout and performance improvement scenarios. Such a tool can simulate the performance, over time, of a company’s business processes relevant to the fiber business, modeling the interaction of people, IT and materials. In fact, the simulation models the interaction of more than 1 million different entities in the market system.
Using the tool, executive decision makers can run multiple scenarios pulling different levers each time: rollout dates for areas, go-live dates and expected impact of improvement initiatives, availability of resources and productivity norms.
Simulations that model an organization’s structures and business plans can enable executives to gain more insight into the dynamic relationships affecting relevant business processes and can help improve the ability of a company to execute business strategy.
For example, a simulation developed for Shell, the global resources company, has helped the company understand the dynamic nature of its maintenance processes. Corrective and preventive maintenance is a big item in the budget of a resources company, since improving maintenance processes represents an opportunity for significant savings and increased business value.
Shell was able to construct a dynamic simulation of this maintenance environment using actual data from its enterprise resource planning (ERP) system. Although the simulation models a number of key performance indicators for the company’s maintenance capabilities, the most important key performance indicator is compliance, the performance of corrective maintenance within an acceptable time frame. The model created for the environment lets those in charge of the maintenance function experiment with different numbers of employees and different work processes to see the effect on maintenance compliance.
One of the interesting insights acquired from the simulation was that decreasing the size of the workforce in the model had an immediate negative effect on compliance, but increasing the workforce also had an unintended effect of creating capacity bottlenecks. These are the kinds of insights almost impossible to obtain through traditional strategic planning analyses. In this case, Shell was able to anticipate the workforce requirements of changes to its maintenance processes.
Keys to Success
Although each of these types of simulations involves different kinds of models and has different uses, the following common steps are crucial for learning executives interested in developing simulation capabilities that can both transfer knowledge and create it:
1. Develop a clear understanding of the need and the value to be delivered.
2. Understand your stakeholders and develop effective sponsorship programs.
3. Make the objectives of the simulation clear, specific and measurable.
4. Communicate the results and translate the learning into action.
One of the objectives of most learning professionals today is to increase their impact on business performance. One way this can happen is to expand the domain of enterprise learning such that its charge is both to help individuals learn and to help the organization as a whole to learn. Simulations can improve organizational learning by creating insights about current marketplace and strategic challenges and opportunities, as well as the organizational and workforce capabilities needed to achieve high performance.