Business Simulation Games Blog

What We Can Learn About Business Acumen From Kodak’s Bankruptcy

Another once-dominant iconic company, Kodak, declares bankruptcy and the stories fly about mismanagement, the lack of visionary leadership, and lost opportunities. After all, Kodak invented the digital camera in 1975 and did nothing with it for 15 years. How could they not see how this would destroy their core business?

I liked Rick Newman’s article about Kodak in U.S.News & World Report. It’s more even-handed than most and comes to the conclusion that maybe there wasn’t anything Kodak could have done to stem their long decline. Kodak projected the rate at which digital photography would displace its core film business and tried to time their entry into digital so it wouldn’t damage their film sales until the technology matured. They tried diversification into pharmaceuticals and medical diagnostics based on their expertise in chemical and imaging technology. They tried hiring CEOs from different industries. All of these are touted as good strategies under these circumstances and all of them failed.

The Economist looks at Kodak and Fujifilm, and wonders why Fujifilm is now doing so well compared to Kodak. Their stories are quite similar. Both enjoyed lucrative near-monopolies in their home markets, both saw that their traditional business, film, would become obsolete, both saw that digital would never be as profitable as film, and both tried to diversify.

And that’s what struck me—how similar their two stories were even in their attempts to deal with their problems. We want simple answers to explain why Kodak went bankrupt and Fujifilm thrived, but there aren’t any because the problems are too complex for a simple answer.

There are a lot of theories for Kodak’s decline:

• They were too slow in responding to market changes
• They tried to create perfect products instead of introducing products quicker and fixing them later
• They changed leadership too often which led to lack of consistency
• They were too complacent because they had been a near-monopoly for too long
• They thought they could just rely on the power of their brand and marketing expertise to move into new fields

The facts are that Kodak was never going to be as successful as the company they were in the in 1976, when they accounted for 90% of film and 85% of camera sales inAmerica.

There’s much to learn in analyzing why some companies succeed and others fail but each company's situation is unique and we aren’t going to end up with simple rules we can put in business books that will tell the next company exactly what to do when they face similar problems.   

That’s why we designed Income/Outcome, our business simulation game, to be open-ended, not favoring one strategy over another. Teams compete to create the most successful business, learning to analyze financial data, create budgets, develop and implement strategies. They have to revise their plans based on market changes and the actions of their competitors. Some companies thrive, others struggle, but each team learns from their successes and failures and by looking at how competing strategies fared, just like in real life.

Learn more about income/outcome business simulation workshops at www.income-outcome.com.

Income/Outcome and Visual Finance in Arab News

Arab News, the national English-language daily of Saudi Arabia, printed a nice half-page story today on Andromeda Training, Income/Outcome and our new Visual Finance app. The article is by Molouk Ba-Isa, Editor for the Gulf Region and an IT specialist.

 

In addition to an overview of Andromeda and our expansion out of the classroom into a new (but related) product line, Arab News has a screen shot of the VF app and a photo of Arab women - fully covered - playing Income/Outcome. 

If you read the story online, please be sure to leave a comment - even if it just says "Thanks!"

 

To find out more on the classroom learning, go to http://income-outcome.com

To find out more on the free iPad app (and its $8 upgrade), go to http://www.visualfinanceapp.com

Decision-Making and Speed of Change in the Gulf Countries

In Saudi Arabia and other Gulf countries such as Bahrain and the UAE, my experience is that nothing gets done without a lot of introductory talk, discussion, negotiation. And it never stops. I hold to my old joke that signing a final contract in the Middle East just gives you one more thing to negotiate about.

But that implies that nothing can ever get done. Not true. The speed of change in the Gulf countries is unbelievable. Once someone at the top mandates a course of action, islands and cities get built in a couple of years.

A culture of slow decision-making and endless renegotiation doesn't need to slow the speed of change, so long as someone is actually in charge.

Visual Finance and Business Simulations as Ideas

We use visualization methodology in the simulation and the new app... so we are always looking for other visual displays of information. There are lots of great visualization techniques being used today, and I would like to share one of them here.  

David McCandless has a beautiful book The Visual Miscellaneum which is also published in the UK as Information is Beautiful (I recommend the book to anyone who likes looking at how information can be displayed). This week he has come up with a Taxonomy of Ideas that is his attempt at finding order in the chaos called creativity. (When I was studying engineering I had a classmate Bill who believed 'a cluttered desk is a cluttered mind'... I always took the opposite side of 'you cannot create in a vacuum'. But keeping Bill in mind, I do clear my desk at the end of each project.) 

First off, I looked for my personal favourite 'elegant', but McCandless required that the phrase 'elegant idea' be popular on Google search, and it did not make the cut. Fair enough.

Then I wondered where our Visual Vinance ideas would fit in this taxonomy.

Income/Outcome Business Simulations... on the Functional x-axis the speed of learning and the high retention place I/O at superfunctional. On the Conceptual Structure y-axis, I/O is synthesizing (it combines a number of things into a coherent whole). So the Income/Outcome business simulations fall somewhere between beautiful and incredible on this ideas chart. I can live with that.  

Visual Finance App... on the Functional x-axis the app the app lets the user create new relationships from the information, so it is transfunctional. On the Conceptual Structure y-axis, the app is between harmonic (integrated in nature) and synthesizing (it combines a number of things into a coherent whole). So the Visual Finance App falls somewhere between brilliant and incredible on this ideas chart. Which is kind of fun.

Incidentally, there is a legend for the colours as well...  these ideas show up as unexpected and unpredictable.  

I wonder if we will one day get to that top right corner.  

Eliza HL, Co-Founder

 

 

 

 

 

Business Acumen and Game Transfer Phenomenon

I recently read an article about game transfer phenomenon. This is the idea that people merge subjective realities and take a game-related action in real life. The author of the article starts by talking about unexpectedly using Mario-Kart driving reflexes to avoid a real-world collision.

 

I play a lot of games, and I frequently experience GTP. But the article got me wondering - if people do things differently as a result of our training, is this Game Transfer Phenomena? If so, is Game Transfer Phenomena a realistic, desirable, goal for business acumen training? 

 

Here are some scenarios coming out of income/outcome workshops: 

• Years ago we had a senior executive from a credit reporting company come to Chapel Hill to discuss buiding a game that modeled their business. On the first day he participated in a regular workshop. The second day he came into the office and informed us that he had changed hotels that morning... he had been replaying the simulation in his head, and come to the realization that saving $100/night on hotel room meant increasing profits by $100. He actually saw the outcome of his decision in terms of playing pieces on the game board.

• Similarly, we have the story of a manager for a major supplier to the automotive industry. One of the big auto-makers went on strike, and the OEM plant manager had a spontaneous game-board vision of what would happen if he kept up production while the strike was ongoing. (What he saw was inventory building up in his FGI area, and no new sales coming in, and running out of money... so he immediately got on the phone and began changing his operations for the duration of the strike). 

• Last month I ran a Finance for Managers program for social entrepreneurs in Kenya. One woman started the workshop by saying "I hate budgets". I told her my goal was to make her like budgets because they are useful, and at the end of two days she said "Eliza, you were right... my perspective had changed". What had been burdensome before, was now an excellent planning tool.

In each case we merged the business game reality with the real world reality, and changed the real world response. These situations describe Game Transfer Phenomena and they are inherent in the income/outcome simulations, they are another form of 'stealth learning'.    

And yes, they are desirable in business acumen workshops... they drive the experiential learning process. 

Eliza HL, Co-Founder

Four Clouds Helps Bring Visual Finance App to Life

In our last blog post we wrote about launching Visual Finance, an iPad App that makes it easy to quickly evaluate the financial health of a company.

In this one we’d like to thank Four Clouds LLC for their excellent work in developing the app for us. The app is a great extension of the financial visualization methodology we’ve been using for years in our Income/Outcome business acumen workshops.

Four Clouds provided great insights and suggestions that really brought the app to life on the iPad. We’re excited and pleased with how it turned out.

If you’d like to read more about the development of the app read this project description from Four Clouds.

You can download the app at the iTunes or iPad Apps stores or read more about it at www.visualfinanceapp.com.

Visual Finance iPad App Now Available

Andromeda Training has just launched Visual Finance, an iPad App that makes it easy for anyone to quickly evaluate the financial health of a company without having to pore through hard-to-understand financial charts and columns of numbers.

Selected Features

• Shows the income statement and balance sheet in a single view making it easier to see the relationships between all of the financial information
• View up to 30 years of financial data for each company
• Tap to instantly view a company’s key financial ratios
• A glossary that provides definitions about each item
• Upgrade for access to 450+ companies, including most of the Fortune 500®. Free version comes with 12 companies.

Visual Finance is based on the financial visualization methodology we’ve been using since 1996 in our Income/Outcome® business simulation workshops to train employees in business acumen at hundreds of top-ranked companies worldwide. Those of you who’ve attended one of our workshops know what we mean when we say that Visual Finance makes finance easy and intuitive.

Go to the app store and check out Visual Finance today! It’s a whole new way of looking at finance.

More information and screenshots available at www.visualfinanceapp.com.

Business Success Involves More Than Asking the Right Questions

I love a good business success story, especially one in which a leader is able to transform a company like this one by Steve Lohr in the NY Times about IBM’s success over the last decade under the leadership of Samuel J. Palmisano

During his tenure, I.B.M. has been a textbook case of how to drive change in a big company. Unlike so much of the study of business innovation that focuses on start-ups and entrepreneurs, Palmisano understands pivotal elements that apply to any business at any stage. His guiding framework for change boils down to just four questions:

• "Why would someone spend their money with you — what is unique about you?"
• "Why would somebody work for you?"
• "Why would society allow you to operate in their defined geography — their country?"
• "And why would somebody invest their money with you?"

Palmisano succeeded at IBM by innovating and taking risks, mostly by answering the first question – What is unique about IBM? He grew the company in areas that took advantage of IBM's unique strengths and had the courage to divest large departments, like personal computers, that didn’t play to those strengths.

What struck me was that his questions aren't company-centric. Each question asks how the company can provide value to others – customers, clients, employees, and investors. When you look at the needs of who you are serving, you are more likely to give them what they want, which in turn leads to your success.

The untold story in this article is that these questions, just like mission, vision and values statements, are useless without a good HR department conducting regular training and communication, to make these questions resonant throughout the company. It takes a critical mass of staff and leadership who live and breathe these messages, to actualize the company's vision.

Stuart Somer

Learn about how Andromeda Training Inc. can help you achieve success with business acumen training through their Income/Outcome^® business simulation game workshops. 

2-day Management Development with a 1-day business simulation

Someone on a LinkedIn forum recently asked: "What kinds of topics would you like to see covered in a 2-day Management Development workshop?" My reply was:

"I recommend that the first day be a team-competition business finance simulation: a good one will engage all participants, will be extremely useful (in different ways) to people with or without a financial background in making them better decision-makers, and will provide a platform and common experience for the second day's activities.

"How the teams made decisions can be tracked and debriefed and used for Leadership or Team-Building work the second day. DISC profiling and 360 analysis can be done on a shared experience which is fresh in everyone's mind. Communication issues, accountability, whatever is important in a company can be looked at from the experience of running a simulated company.

"And specifically the Income/Outcome simulation is invaluable for in-company workshops (as opposed to open enrolment ones) because - although it starts with a simple generic company model - the workshop ends by modeling the financial statements of the client company in the gameboard format that the participants have been playing with all day. That allows for a fresh view of the health, structure, ratios and strategic position of the company, and a discussion of the concerns of senior management, and appropriate metrics and future direction."

I acknowledged my vested interest as President of Andromeda Training, but I still hold to the truth of what I said: that I would do a good team-competition business simulation for the first day, and use that to launch into detailed company-specific issues on the second. And, yes, the business finance simulation that can accomplish that most appropriately is Income/Outcome, because of our unique Visual Finance module as the wrap-up to our part of such a program.

Doodle Your Way to Creative Thinking

I have a confession. I’m a doodler. Whenever I have a pen and paper to take notes; in meetings, on the phone, when I’m bored and when I’m not. Since I’ve often been “the creative guy” at many of my jobs, it hasn’t been a big issue. But many people have been discouraged from doodling by teachers, parents, and bosses who call it a wasteful activity.

So I was glad to see this TED video today: "Doodlers, Unite!" by Sunni Brown. It’s only six minutes and if you’re a doodler it will make you feel better about your addiction. And if you’re not, it has some great info on Visual Thinking.

Her main point is that doodling is a powerful tool that actually helps people think. We can retain information at a higher rate when we doodle, and we are able to process that information more efficiently, because it engages more of our senses, mind and body. Need to solve a problem? Try doodling your way to a solution.

During the past fifty years we have made huge leaps in our understanding of how our brain works and how people learn. The old model of learning via a professor lecturing to a roomful of note taking students, or by studying the linguistically dense textbook, has been found to be inefficient and a weak purveyor of knowledge. Reading or listening to someone inform us of facts is fleeting knowledge, easily lost. Just ask a student a week after the exam how much they actually remember. No one wants a medical student to operate who has only read about an operation or listened to a lecture about operating.

At Andromeda Training, we run workshops in which teams learn business and finance by running a business in a game-based simulation. It’s fun, competitive and provides a rich learning experience engaging students on many levels.  

I hope you enjoyed Sunni’s video as much as I did. Check out our video if you want to see our business training game in action.