You might be saying, "Behavioral economics? I'm outa here!" But hang tight because it's actually pretty interesting. I'm going to pull everything from online sources and I won't get into the math or anything overly deep. It is worth reading because behavioral economics goes right to the core of the reason why relativity based business simulations are superior to static model based simulations. Let's dive it.
Behavioral Economics studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and resource allocation, although not always that narrowly, but also more generally, of the impact of different kinds of behavior, in different environments of varying experimental values. (source: Wikipedia). I have to say that this is actually a pretty easy to understand and overall nicely laid out description of such a complicated topic.
Business Simulations are tools utilized to reinforce corporate training and development program material. In most cases, these tools are in the form of a game based method where teams are making decisions in order to see an outcome.
There is a substantial criteria that you need to think about when you think about business simulations: Relativity Modeling. This basically means the business simulation should be setup in order for participants to compete with each other. You are probably able to see why behavioral econ and relativity based simulation modeling go hand in hand.
By utilizing a relativity model, you are more in line with the advantages of behavioral economics. The nice thing about behavioral econ is that it takes into account the human emotion part of the economics equation(s). Thus, this is why business simulations is such a great fit for leadership development programs. Leadership, at its core, is a behavior. By implementing a business simulation that takes into account the behavior of the program, you are by default adding a real-real world scenario that can be found in no other place.
So yes, behavioral economics and relativity based business simulations are cut from the same cloth. This might seem somewhat esoteric, but the general gist is that when you're looking for a business simulation for leadership development, it is important to look for a solution where teams are competing against each other and not against the computer. Also, make sure they aren't competing against the computer and then comparing their scores. This is basically the same thing. Relativity based solutions are more real, more engaging, and proven to be more effective.
Business Acumen Training Gamification
First, let's define gamification. According to Wikipedia, Gamification is: …the application of game-design elements and game principles in non-game contexts (source: Wikipedia.org). This tells us a little, but let's just think of Gamficiation as turning something boring into a game. Much easier. Now, let's just combine what we're talking about (business acumen training), and we're talking about making a business acumen training game.
Second, let's now take your company and add it to the game. I'm talking about your industry, culture, products, etc. Bringing this element of realism makes it more interesting for you and applicable for your company. Now that we have these two elements, lets look how it behaves:
In a business acumen training session we teach, participants are divided into teams. The teams then compete against each other in how effectively they can obtain profitability: Profits (at it's most simple level). Teams must control R&D, marketing, operations, people development, IT, etc.. Any decision they make has an impact on the business. This is basically a real-time business war games. Teams compete in real time business simulations that gamify the boring process of traditional business acumen training. This is training for this generation: Real, Engaging, and Applicable.
In summary, business acumen training gamification makes leadership, management, or even individual contributor corporate training exciting, applicable and incredibly valuable. Have a look soon. You'll love it!
- Business Acumen
- Leadership Development
- Employee Assessment
- Employee Management
- Corporate Strategy
- Business Management
- A lot more
Using a business simulator for leadership development puts future leaders into management situations well ahead of their time. These leaders can practice and fail without introducing danger to the business. It is important to note that tools such as these do not need to be big, complicated, or expensive. Starting small and focusing on the learning objectives is important.
Creating a large and complicated solution is very unnecessary. Here are some tips to think about:
3 Tips to Getting Started With Business Simulations:
- Start small and focus only on what is absolutely necessary- You'll see great temptation to go big and include everything. Resist the temptation!
- Make certain to align behind clearly defined learning objectives- Don't stray from what you're trying to train participants. Stay focused on the objectives
- If you're going to spend money, spend it on your training content first! Don't be tempted to put a majority of your budget into a business simulator. You should spend a majority of your budget a great training and development content!
In summary, large companies have been successfully using a business simulator to training employees for many years. If you start small, focus, and build from the foundation, you'll do great!
Using a business simulation for leadership development, business acumen, or any other specific training program is great. Like other tools for learning, you need to make certain the solution is grounded in a solid foundation. Here are some tips to attain the correct focus when using sims and games for learning:
Three Simple Tips That Create Focus:
1. Write down the three reasons you want to use a business simulation- Make certain these reasons are very clear and detailed. A reason such as, "Because it will be engaging" is probably a little weak. Instead, how about, "Challenge learning participants to apply the training content in a level slightly above their current capability." Think hard about the details.
2. Write down and get buy in on the three measurable goals of your training program- This is important! Having very clearly and agreed upon goals of your training program will help create grounded focus for your business training simulation. Having these written down will decrease your chance of scope creep.
3. Keep the program goals and reasons in sight at all times- Keeping the goals and reasons for using a business simulation will ensure focus. If you create these and then put them away in a folder, scope creep is almost guaranteed.
Using a simulation for corporate development is a great way to reinforce your training content. Sims can also act a little like candy: Once you get a taste of it, you're going to want more. The single biggest reason programs fail is size. Once a simulation becomes too large, it falls under it's own weight. The trick to keeping a 'skinny' sim is focus. Just make sure the sim does not do anything beyond your focus and you'll be fine.