Most business people don’t really like accounting and finance. They avoid the topics. And this is why the largest knowledge gap that we find in our business simulation participants is “the numbers” side of business. And this is true across all industries. Business simulations are excellent at teaching “the numbers” side.
While finance and accounting illiteracy might be acceptable in more junior-level audiences, it becomes inexcusable for someone more senior. Which brings me to my current pet peeve – the difficulty that some people have in discussing the ROI of their business decisions and actions. The first character in any solid answer to the ROI question MUST contain a $ or a € or similar. An answer may include statements like “we’ll get more done” or “employees will appreciate” or “customer experience will improve”. However, only if these statements are accompanied by numbers and dollars and cents is it a true ROI.
As business decisions get made there are intended and unintended consequences. And qualitative statements can be made regarding the first and second order impacts of actions that one takes. But as you improve your business acumen, and your financial acumen, and your leadership acumen, you must develop the skills and the knowledge to push past qualitative statements of ROI, and drill down to the hard numbers that measure the true ROI of your decision (or at least an educated estimate).
ROIs are difficult, time consuming and sometime extremely uncertain. ROIs do not need to be calculated and studied for all actions. However, conducting an ROI or just discussing an ROI can be incredibly enlightening.
Some of the ROIs/Benefits from running a PriSim business simulation exercise may include (and you are correct, the first character of each one is not a $ but I’d be happy to discuss!):
- Improved employee retention, engagement, recruitment because employees feel valued and invested in.
- Quicker leadership pipeline (identification/development/succession implementation).
- Bring new employees up to speed more quickly.
- Bigger “bang” for your training buck. Experiential approach is more efficient and effective at teaching and retaining complex, interconnected, tacit knowledge vs. traditional approaches.
- Make better decisions driving a tangible/measurable benefit ($ ROI).
- New strategy implementation (“play” it/experiment first!). Better communicate the new approach.
- Help customers better by getting outside of our core service and advising them – Understanding our clients. Walk in their shoes.
- Participant “networks”/relationships with fellow participants are enhanced significantly in a shorter amount of time than it would take without the immersive, shared experience.
- Improved organization alignment and agility. People resolve conflicts by better working together and understanding where everyone fits and how they impact one another. Develop a common language and mental model of the business & key drivers of success.
- Required for certification/continuing education.