Should Business Simulations for Senior Managers Include More Detail?

Sometimes, conversations with clients turn to how much detail a business simulation for senior executives should have.

Here are my two cents.

The Temptation to Mirror Reality

When planning a business simulation for managers, it's tempting to try to model the real world as closely as possible.

It feels like common sense:

The more detail a simulation includes, the easier it will be for a leader to apply the learning back in the office.

Not Seeing the Forest for the Trees

The problem is that more detail can distract from the fundamental concepts.

And many senior managers lack basic financial understanding because their career paths have focused on other areas.

In fact, even finance professionals sometimes lack broader business acumen:

They might understand the finance side of the business but not necessarily the drivers of a competitive market.

To Teach the Foundations, Simplify

Think of a good business simulation like a good cartoon:

It conveys an idea with just a few frames.

A business simulation isn't, and shouldn't try to be, a detailed blueprint.

Its power lies in simplifying:

• Leaving out unnecessary details
• Highlighting the essentials

When it comes to business fundamentals, the essentials include:

• The difference between cash flow and profit
• The importance of supply and demand
• Understanding cost structure

Why Board Game Simulations Work

Generally, a board game simulation is better suited to teaching concepts than conveying details.

Why?

Because it uses physical objects instead of fractions and decimals.

This naturally emphasizes:

• The big-picture dynamics (financial statements, marketplace pressures, inventory control, etc.)
• Core financial principles (profit vs. cash flow, cost structure, and more)

It doesn't get bogged down in the complex modeling of activity-based costing or other granular details.

Where Computer Simulations Fit In

Detailed 'black box' computer simulations can be valuable for:

• Modeling detailed financial relationships
• Analyzing dollars and cents

However, they're less effective for teaching fundamental concepts.

‍

So here's my recommendation:

Don't introduce detailed complexity until your team has a solid grasp of the big-picture dynamics.

Once they've mastered the basics, you can:

• Introduce a more detailed computer simulation
• Challenge them with more detailed scenarios
• Dive deeper into the specifics of your business

The Takeaway

Everyone benefits from a simplified model that highlights the key drivers of financial results.

So:

1. Start with a strong foundation of core business concepts.
2. Then introduce more detail and fine-tune the learning.

What’s Your Experience?

Have you experimented with different levels of detail in business simulations?

Chime in below—we'd love to hear your thoughts.

‍