Simulation Model - Scenario, Stylisation and Simplification
Here I discuss the meta-compositional design of the simulation model (business modelled - scenario) in terms of stylisation and simplification.
Home > Meta-Composition Overview > Business Simulation Interactions
A business simulation is positioned on the model domain with one axis defining the degree of stylisation and the other defining the degree of simplicity and the position on the domain defines the simulation's scenario - business replica, industry reflection, generic, imaginary or surreal.
When I keynoted the 2008 ISAGA (International Society for Simulation and Gaming) Conference I illustrated the stylisation aspects of the Model Domain by placing three human faces to illustrate stylisation and simplification. (see below). Just as the human mind can recognise all three pictures as human faces, participants can learn from business simulations spread across the model domain.
Stylisation involves amplifying the way the model responds and embellishing and engineering the model to ease identifying the link between cause and effect and thus support and improve learning and, to an extent, shorten duration.
Changing productive capacity in my Management Challenge simulation took a year to be installed and it was not possible to cut capacity. The long delay was to emphasise the need for and reward planning as with no or a short implementation delay would allow participants to act reactively rather than proactively. Secondly, disallowing capacity cuts forced participants to consider the impact of capital expenditure on cash flow and live with the consequences if they did not.
A second example is my Distrain simulation. Here the client wanted the simulation to replicate a US Electrical Equipment Distributor so their sales force would understand the business problems and issues facing their clients. A problem with these distributors is that they have very low profit margins and levels of profitability (ROI). My concern was that if this was replicated it would be disengaging. As a consequence, although, initially, profitability was very low it was possible to increase this substantially (to unreal levels) - stylisation to ensure engagement. However, this did not impact learning. One participant who left the company to work as a distributor branch manager said the class helped him understand and prepare for the job and that he had a real benefit understanding the business from the simulation approach.
Simplification involves reducing the complexity of decisions and results and through this focus on learning objectives and reduce cognitive load and the simulation's duration. My PriceWize pricing simulation simplified and focused by having the same basic costs and nominal market sizes for all market sectors. This simplification meant that sector profit contribution was directly comparable. What if the market sectors differed? This would have clouded the assessment of the impact of price differences between sectors and overtime, slowed and, perhaps, blocked learning.
But simplification is from the participants viewpoint and may necessitate complex simulation models. For my SEED (entrepreneurial planning simulation) I did not want participants to waste time with the operational scheduling of production and capacity building. This was done with a complex model that automated scheduling and capacity purchases.
Here I describe the spread of scenarios (business modeled) across the model domain and in the following section the impact of the most usual types of scenario on relevance, complexity, duration, cost and learning.
Before I started designing and using business simulation models for learning, I was involved in designing them and advising on their design for corporate and financial planning. Although some companies tried to create a model of their whole. business they failed because the task was too daunting, too time consuming and before the model was completed the business changed.
Developing a business simulation for learning to replicate a "real" or your business is equally perhaps more foolish. It will result in a simulation that is too complex, takes too long to run, includes irrelevant decisions, results and issues and completely misses the point - you are not trying to create a photo-exact replica - you are trying to create a simulation that delivers learning.
Admittedly, in my early business simulation design days, I indulged in designing complex simulations - simulations where their purpose was to replicate the real world rather than deliver learning. Today, I see creating a complex, "real" simulation is the result of an artistic self-indulgent, autotelic quest - "l'art pour l'art".
An Industry Reflection Simulation has the financial, operational and marketing structures and issues of the learners' industry but does not try to replicate an actual company. These simulations are positioned on the model domain above and to the right of Business Replica simulations - that is to say they are appropriately stylised and simplified.
When running my Distribution Challenge simulation with the senior management of a middle sized distribution company one of the CEOs came up to me and said "You must have spent a huge amount of time making the simulation look exactly like my company." This was not true but importantly that the markets, financial and operational structures reflected his company and its issues. Actually, the only customisation was to change terminology and market sector names to reflect the client's - about two hours work. But, this is not to say the simulation may not need to be more closely aligned. When I customised my Distribution Challenge simulation for Schneider Electric, although the core models remained the same I added decisions and reports and recalibrated the simulation - work that took substantially longer than the two hours but still a fraction of the time required to create a new simulation.
A Generic Business Simulation is one where the simulation scenario was created with no thought about the learners' industry, its structures or issues. Typically, a manufacturing company is replicated. Where the simulation is to be used with students to teach business theory a generic simulation is appropriate. However, I feel that to develop business experience and wisdom for business people in a company a generic simulation is generally not appropriate.
Over the years I have invented products and services that do not actually exist. For example, in 1980 my Global Operations simulation involved the "Virtual Patient" a high tech manikin used to train doctors (ok technology has caught up). In 2001 in partnership with Imperial I developed a entrepreneurial planning simulation selling intelligent Cuddl-Etoys to three market sectors (see below) - support early learning, help socialise autistic children and as companions for the elderly - (again after well over a decade technology is catching up with robot companions for the elderly and robots are helping children with autism but so far nothing to support early learning but it is happening).
In the late Naughties I developed my Service Launch simulation where participants ran "Chucker Cabs" a floor to door taxi service for the party animal with a unique, hoseable rear cage (see below)!
I feel that imaginary scenarios are appropriate for very short simulations (Chucker Cabs take two hours), use with academic students (the Cuddl-Etoy simulation was developed in partnership with Imperial for their students) or experienced, mature management (the Virtual Patient simulation is a strategic level simulation for senior managers).
Over the years, I've only designed on simulation that can be described as "surreal". This involved a person running the UK political system against the computer (the participant played the role of one party and the computer the other party). To do this , each period, participants and the computer chose an area to make a policy statement about and based on the area chosen and the current concerns of the electorate this swung them towards one party or the other. Irregularly there were by-elections and when the party did not support their own followers' enough then there were problems with their own MPs (the message "backbenchers are revolting"). The party in power could call a General Election at any time before they were forced to do at the end of five years in power. The simulation was written in the early 1970's. Today, reflecting on the simulation, I wonder whether it is surreal or is an accurate replica of the British political system and it is the British Political System that is surreal.
The business model defines the simulation's of scenario and this impacts relevance, complexity, duration, cost and learning. As discussed below, I feel that for most business learning, an Industry Reflection simulation is the best.
Although a generic. manufacturing industry simulation may be relevant for university students or on a business course where the learners come from a range of industries, for learners from a bank or a service company a generic, manufacturing scenario will not be relevant.
For a business simulation to deliver relevant learning it must have a similar financial, marketing and operational structure and involve the issues that are faced by the industry.
Although one might expect that a business simulation that replicates the learners' business would be more relevant, this is not true. This is because its complexity will cause confusion and the learners may feel and argue that the replica is insufficiently accurate.
In terms of complexity a Business Replica simulation will be far, far more complex than a Generic simulation because a really accurate model of a real business is very complex with an Industry Reflection simulation only slightly more or no more complex than a Generic Simulation. Some 40 years ago, I advised companies about building corporate models to help with their business/financial planning. Despite costing £100,000 (in the early 1970's), no company managed to create a full business replica.
As a business simulation's duration is strongly correlated with complexity  its duration follows the complexity curve (above) with generic and industry reflection scenarios have reasonable durations but with business replica simulations requiring significantly longer durations.
As a business simulation's running cost is strongly correlated with duration and its development cost is strongly correlated with complexity  its acquisition and use cost follows the complexity curve (above) with generic and industry reflection scenarios having reasonable costs but with business replica simulations having a significantly higher cost.
So, a business replica is both expensive to develop and has a long duration. Further, focusing on replicating a business misses the point that using a business simulation is to deliver learning.
Although relevance improves learning, complexity (as in the real world) can become confusing and detract from learning. Perceptions influence learning and I believe that learning peaks for Industry Specific simulation with Generic simulations less effective and Business Replica simulations significantly less effective.
My experience with actual use on company training courses means that I feel that the Business Replica simulations do not provide good company training. However the position of the peak depends on maturity with immature students requiring a business simulation closer to being a replica of their business with more experienced business people being able to handle a greater abstraction.
Most recent update: 20/07/15
Hall Marketing, Studio 11, Colman's Wharf, 45 Morris Road, London E14 6PA, ENGLAND
Phone +44 (0)20 7537 2982 E-mail email@example.com