Business Simulation Games Blog

J&J's Financials and CEOs

Robin Helweg-Larsen — Wed, 22 Feb 2012 15:49:00 GMT

Johnson & Johnson is the butt of jokes because of the announcement about their new CEO. As David Shaywitz says, writing in Forbes: "J&J is replacing their current CEO William Weldon (athletic white male and former sales rep who rose through the commercial organization) with Alex Gorsky (athletic white male and former sales rep who rose through the commercial organization)." Shaywitz wonders if innovation can come from people like this, but notes that it's not unusual in the industry.

J&J's financials are not bad, though. Nothing for the outgoing CEO to be ashamed of. Here they are in Visual Finance:

Approx $13bn in profit, on $60-something bn in sales. Not bad. No real debt. Fairly slow-paying customers, but cash flow doesn't look like a problem at all. Add the basic ratios in, and it confirms it:

Good job, Mr. Weldon!

Robin Helweg-Larsen, President, Andromeda Training, Inc.

'Visual Finance' is available as a free app for iPad; a $7.99 upgrade gives you access to many years of the financial statements of 450 publicly traded companies.

Andromeda Training provides classroom training in business acumen, using the same visual methodology in its Income/Outcome boardgame format.

---

Abbott Labs as seen in Visual Finance

Robin Helweg-Larsen — Fri, 17 Feb 2012 12:27:00 GMT

Abbott Labs is often thought of as one of the classic Big Pharma companies, and its structure appears to bear this out (note: 2010 Annual Report information):

Very profitable, at 13% Return On Sales - though the comparatively high Assets reduce its Return On Assets to less than 8%.
Very high R&D spend: some 11% of Sales Revenue is plowed straight back into developing new product.
Slow-paying customers, at 75 Days Sales Outstanding
Debt under control
And the largest Asset item is Goodwill - reflecting aggressive expansion through strategic acquisitions.

At a glance, a perfectly healthy drug company - however, what you don't see in this view is that Abbott doesn't even consider itself as a "pharmaceutical" company any longer, but as belonging to the wider "medical" field. And this is what a lot of both its R&D and its acquisitions have focused on.

Abbott Labs is in a state of transition, not out of desperation as can sometimes be the case, but driven by a strategic vision; and the results are good.

(Andromeda Training is proud to have been providing business acumen training for Abbott Labs in the US, UK and Ireland, using the Income/Outcome simulation.

The Visual Finance app for the iPad is available at the app store; the basic app is free, and there is an $8 upgrade available.)

Robin Helweg-Larsen, President, Andromeda Training, Inc.

---

What Visual Finance highlights for Schneider Electric

Robin Helweg-Larsen — Thu, 16 Feb 2012 19:24:00 GMT

When you look at Schneider Electric's 2010 financial statements (2011 not being publicly available yet) in the Visual Finance app, you can see at once that:

it's a profitable company, with something under 10% Return On Sales (turning on Ratios would give you the actual figure immediately);
long-term debt is under control

but two anomalies also stand out:

It looks like customers are taking an enormously long time to pay - Days Sales Outstanding is well over 90 Days. This is a situation worth checking into in the Notes to the Financial Statements in the Annual Report.
The largest Fixed Assets item, when you click on it or hover over it, turns out to be Goodwill. In other words, the company has been on a major buying binge and, without racking up excessive debt, has paid well over book value for one or more acquisitions - which would have been done to meet the strategic needs of the company.

So Schneider Electric looks like a profitable company, able to generate cash for its major acquisitions, despite some possible glitch in its Receivables process. It is expanding through acquisitions - you'd have to down-arrow to previous years to see how it has changed from before the acquisitions. Whatever its strategic plan is, the company appears it is fulfilling it.

It will be interesting to see how the results for 2011 compare when they are released.

(Andromeda Training is proud to have been providing business acumen training for Schneider Electric's leadership development and new hire engineers for many years in the US and Mexico. The Visual Finance app for the iPad is available at the app store; the basic app is free, and there is an $8 upgrade available.)

Robin Helweg-Larsen, President, Andromeda Training, Inc.

---

Visual Finance shows Steven Appleton's legacy at Micron

Robin Helweg-Larsen — Tue, 14 Feb 2012 19:01:00 GMT

The death of Micron CEO Steven Appleton this month comes at a time of difficulty and change for the company - but difficulty and change has been the norm for Micron and for the entire semiconductor industry for decades. Mr. Appleton was remarkable for his survival skills in several areas of high risk - he knew the risks and relished them.

As the Wall Street Journal reported:

Mr. Appleton was a stunt-plane flier who had survived a previous crash and also raced motorcycles, cars and off-road vehicles. He cut a maverick figure in the industry, guiding Micron through a turbulent battle against much larger Asian competitors in the boom-and-bust market for memory chips.

Micron is the last remaining U.S. competitor in an industry that American companies once dominated, showing a knack for endurance that earned Mr. Appleton the semiconductor industry's highest award in November.

Mr. Appleton's legacy is a company that posted a profit in its last Annual Report. In the semiconductor industry, that is always an accomplishment in itself.

Here are Micron's 2011 Financial Statements in Visual Finance view.

Andromeda Training has provided Income/Outcome business acumen training to managers at Micron for many years. We share their sense of loss, and wish them well in the future.

Robin Helweg-Larsen, President, Andromeda Training, Inc.

---

Apple in Visual Finance

Robin Helweg-Larsen — Mon, 13 Feb 2012 13:21:00 GMT

Apple has been posting amazing financial results for several years, and those results are so good that they are hard to describe.

Look at them in the Visual Finance app (yes, on the iPad from Apple)

With every stack worth $5bn, you can see that its near-25% profitability is giving over $25bn for the year ending September 2011. On the Balance Sheet, it has almost no long-term debt. The largest amount of Fixed Assets is over $55bn of long-term Investments - the largest amount of Other Assets is over $15bn of short-term Investments. Add that to the $10bn in Cash on hand, and you've got $80bn in Cash and Securities that just seems to be sitting there.

Their Return On Assets may be high, at over 20%... but if they disposed of all their unnecessary Cash and Securities (say as Dividends), they would be perfectly functional with ROA at an amazing 70%.

Given that their 2012 Q1 results (not included here) were hugely better than anything prior, and that they are now the highest-worth company in the world, and that their cash and investments are up around the $100bn mark now... all I can say is that Steve Jobs' vision paid off, and CEO Tim Cook is an operational genius.

But what is Apple going to do with that much spare cash? Apple doesn't have a culture of buying things... but it doesn't have a culture of paying dividends, either. The rumor mills are talking about the latter, though.

---

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

Stuart Somer — Fri, 03 Feb 2012 03:49:00 GMT

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

Robin Helweg-Larsen — Thu, 02 Feb 2012 08:57:00 GMT

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

Robin Helweg-Larsen — Fri, 27 Jan 2012 14:04:00 GMT

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

eliza d — Thu, 19 Jan 2012 16:48:00 GMT

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

eliza d — Wed, 18 Jan 2012 16:09:00 GMT

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

Stuart Somer — Fri, 13 Jan 2012 18:11:00 GMT

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

Stuart Somer — Fri, 06 Jan 2012 00:45:00 GMT

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

Stuart Somer — Wed, 04 Jan 2012 16:23:00 GMT

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

Robin Helweg-Larsen — Sun, 01 Jan 2012 19:06:00 GMT

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

Stuart Somer — Fri, 30 Dec 2011 15:33:00 GMT

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.

---

Resisting SOPA, boycotting its advocates

Robin Helweg-Larsen — Wed, 28 Dec 2011 03:51:00 GMT

The "Stop Online Piracy Act" (SOPA) explicitly states that companies will be liable for everything their users post. Sites like Facebook, YouTube, Twitter, Reddit, Wikipedia, or any sites that allow user generated content CANNOT exist under these laws. Immediately after this bill is passed, you will see the media mafia (MPIAA, RIAA, etc) replacing websites like Wikipedia with commercialized encyclopedia software. Mainstream media outlets will not cover this bill because they are the ones lobbying for it.

There is a petition against it here.

Some of the most despicable people support SOPA. The most obvious is the elephant-killing CEO of domain registration company GoDaddy, Bob Parsons. Over 100,000 people have switched their domain registrations away from GoDaddy in protest. The step-by-step guide to do it is here.

The future of the Internet is at stake, and with it the future of everything that Andromeda Training stands for: intellectual freedom, rapid technological and cultural change, the thrashing out of ideas in forums like Wikipedia, the empowerment of the individual, the development of entrepreneurship...

I encourage you to investigate the issue, and take personal action.

---

What Type of Year Was it for Your Company’s Training Programs?

Stuart Somer — Fri, 23 Dec 2011 15:17:00 GMT

As the new year creeps up on us, our inclination is to reflect back on the triumphs and failures of the previous twelve months. Magazines and newspapers are full of Ten Best and Ten Worst lists of all kinds. Political pundits are full of lists of missteps and after-the-fact insights. From our collective habit of coming up with New Year's Resolutions, we might guess that individuals do their own internal list making as well, mostly of the Ten Worst sort. And businesses, too, would do well to reflect on the relative successes and failures of the past year.

Einstein is usually credited with saying "Insanity is doing the same thing over and over again but expecting different results." A business that is steadily losing ground in our ever-increasingly competitive world, or merely treading water and hoping for better times, is in urgent need of an internal assessment to avoid doings the same thing over and over and expecting a different result.

What type of year was it for your company’s training programs?

We’re betting that the most successful training you ran involved experiential learning in which teams of employees were actively engaged in a hands-on thought provoking activity as opposed to those in which they were passive participants.

Why are we such strong believers in experiential learning? Because we’ve been running business game simulation workshops since 1996. We’ve seen how even the most finance phobic of participants can enjoy learning how to balance a budget when they are part of a team making decisions that affect the financial fate of their company vs. their competitors. And we’ve seen how much they can learn in even a short half day program.

Contact us so we can share out enthusiasm about experiential business training with you and suggest programs that would work best for your company.

---

Keep Up Employee Training Programs in a Down Economy

Stuart Somer — Thu, 15 Dec 2011 18:27:00 GMT

Some say it’s still a recession, others say it’s a very slow recovery. Either way, the money is tight. So what's a company to do?

While some companies are slashing their budgets in every direction, smart companies know to nurture and nourish their advertising budget. And smarter companies do the same for their training programs.

A MarketSense study of the recession of 1989-91 points an approving finger at Pizza Hut and Taco Bell, who both increased their advertising and saw sales jump by 61 percent and 40 percent, respectively. At the same time, a shall-remain-nameless fast food giant slashed its ad budget and saw sales drop 28 percent.

Quick, kids, write that down-- a perfect example of that old saw: penny wise, pound foolish.

Advertising in a down economy is important because

You maintain continuity and build on past marketing/branding efforts
You maintain a healthy, positive image of your company
You maintain good relationships with your current customers

All this good maintenance translates into real --ka-ching-- gains in sales and market share over your competitors who cut their ad budgets.

Advertising is an investment in your customers. Training is an investment in your employees, your most valuable asset. Good training makes good employees great, giving them the skills and confidence to innovate, suggest improvements that cut expenses, and improve profitability.

Training programs help you retain your high performing employees and future leaders by

Making them feel valued
Keeping up company morale
Making them feel there is room for advancement in the company

High-performer employees are most likely to seek other jobs if they don't feel valued or if they feel stuck in a job going nowhere. Training programs give all employees an added value to their work, a sense that they are continuing their education, increasing their status and worth in measurable ways.

In tight times, choosing the right training program is more important than ever. Need help? Read our guide to comparing business acumen training solutions.

---

The Speed of Change: the Flying Robots are here

Robin Helweg-Larsen — Fri, 09 Dec 2011 12:56:00 GMT

"Robots" and "flying" have always had futuristic connotations, even though they are already part of our daily lives. Now comes another symptom of the speed of change - flying robots that can construct a 6-meter (20-foot) tower on their own. The video is here.

It's fascinating, it's inevitable, but it warns that yet another human occupation is under threat from automation - or rather from robotics, because this is more than mere automation.What happens when first the menial jobs, and then all the skilled jobs, and then all the professions, are found over time to be more cheaply performed - and more competently - by robots? Will governments collect enough wealth to provide a reasonable standard of income for the masses of people who can't find work? Only 10 to 20% of the workforce is unemployed at present in developed countries; what happens when it is 80 to 90%?

And even if everyone has enough money to be happy (yeah? really?), what will they do to feel fulfilled? I believe we will all have to take control of our lives, create our own work, whether by starting our own businesses, or creating our own artistry, or caring for other family members. We will have to seek out areas where human contact and creative vision are important, and give up on the idea of a paid job in any area that is essentially routine.

In the widest sense of the word, we will all have to become entrepreneurs. That would not necessarily be a bad thing!

---

Saudi Arabia and business acumen

Robin Helweg-Larsen — Thu, 08 Dec 2011 07:32:00 GMT

There is an element of culture shock in working in Saudi Arabia.

What? My business partner can't co-teach with me in the classroom, even though she is the co-developer of all the workshops, and my wife as well? - What? She has to wear an abaya even to go down the hotel hallway for breakfast? - What? She can't drive?... And so on.

But the people are so friendly that it makes the archaic feel of the place into something charming and Olde Worlde.

The speed of change in Saudi Arabia and the other Gulf countries is hard to believe. The governments are all acutely aware that they have a time-limited opportunity to leap from the fishing villages and camel-herding of 50 years ago, into the forefront of the global economy - if they can use their oil and gas revenues appropriately and develop the physical and cultural infrastructure necessary to compete on the world stage.

So the awareness is there of the need for training in business acumen, and there is the willingness and the ability to pay for the best in the world in education, as in everything else. Income/Outcome has been extremely well received by Saudi Electricity in five workshops for various audiences: Department Managers, Division Managers, Engineers, and High Potentials. We are committed to continued workshops in 2012 - and from April most of the workshops are scheduled to be in Arabic.

---

Building Business Acumen in 4 hours or less.

eliza d — Thu, 03 Nov 2011 20:30:00 GMT

Recently I wrote about using the Entrepreneurial Challenge business simulation to overcome Fear of Finance. We also surveyed EMBA students at Vanderbit Owen College of Business to see if they felt that the workshop helped business acumen.

After the 3 hour (and 20 minute) workshop was over, 93% of the non-finance students, and 83% of the finance students, felt their business acumen knowledge was improved as a result of going through the simulation.

---

Using a Business Simulation to Overcome the Fear of Finance

eliza d — Wed, 02 Nov 2011 19:08:00 GMT

Lots of people have 'fear of finance'... students, investors, even business owners (we have met a suprising number of entrepreneurs who let their accountant manage the finance portoin of the business). In the past few months we have worked with several universities to look at the impact of our business simulations in overcoming Fear of Finance.

In August, we used the Entrepreneurial Challenge business simulation in the opening residency of the Executive MBA program at Vanderbilt's Owen College of Management. The 3+ hour workshop ran on Day 3 of the program, and followed 6 hours of accounting lectures. Survey instrument was applied immediately prior to the simulation (=Before) and the following morning (=After) - certainly not ideal, but we believed it was important that we try to isolate the effect of the simulation.

We looked at Fear from 2 directions.

1) Their comfort level with financial concepts - how comfortable did they feel reading and interpreting their company's P&L and Balance Sheet, and how comfortable did they feel interpreting and explaining Retained Earnings.

2) How did they see themselves in relation to their colleagues. We believed that a person who was not comfortable with finance would perceive themselves to be lacking in business acumen skills.

Approximately 25% of the class had worked in finance and there was no significant change in their comfort level with the financial concepts.

For the other (non-finance) students there was a dramatic increase in comfort level.

The number of students who felt they could explain and interpret a company's Retained Earnings went from 10.8% (before) to 47.8% (after).
Initially 30% of the students felt their business acumen skills were below those of their classmates; after the simulation this was reduced to 20%.

These students will be studying a lot more finance over the next two years, we will be looking to see if that learning process has been smoothed by the simulation.

Eliza Helweg-Larsen, Co-Founder

---

Teaching Income/Outcome in Zambia

Robin Helweg-Larsen — Fri, 28 Oct 2011 13:33:00 GMT

In 2001 Eliza and I went to Kitwe in the Copper Belt area of Zambia, to run Income/Outcome workshops for Chambishi Metals and to license them to do their own training.

We ran a 'Finance For Everyone' (Level 2) workshop for their Managers (mostly South African expats), and a 'Business Basics' workshop for their Union shop stewards (local Zambians). We then licensed the Training Manager to continue teaching 'Business Basics'.

We found the local Zambians to be extremely intelligent and entrepreneurial - each typically spoke four languages fluently, and they tended to be developing a small business on the side within their family.

But their formal business understanding was non-existent. We took a full day to run what is normally a 4-hour workshop in the US. We began with an exercise I created spontaneously to explain the concept of Equity, telling the story of buying and selling a house.

All fundamental business concepts were as new to them as they would be to American high school students:

understanding your total costs, and your cost structure
the difference between cash flow and profit
the need to control working capital
the double benefit of increased efficiency - higher volume AND lower cost per unit
the use of Income Statement and Balance Sheet
basic ratios like debt-to-equity and Return on Assets

There is an enormous need for basic business literacy in less developed economies, to give people the tools to improve their lives. Business simulations are the most effective in speed and clarity of learning, but the challenge is in rolling them out in an efficient and affordable way. Andromeda Training is always improving its solutions.

---

Experiential Learning: Thoughts Through the Ages

Robin Helweg-Larsen — Mon, 26 Sep 2011 14:14:00 GMT

"We are usually convinced more easily by reasons we have found ourselves than by those which have occurred to others," said Blaise Pascal.

The value of experiential learning is something that has been noted throughout time, from the sayings of Confucius, who said:

“I hear and I forget. I see and I remember. I do and I understand.”

to the 17th century mathematician Blaise Pascal, who said:

"We are usually convinced more easily by reasons we have found ourselves than by those which have occurred to others."

Despite the best efforts of marketers and the WorldWide Web, we all remain individuals. Despite our tendencies to laziness, we remain inescapably responsible for ourselves.

There is a Danish proverb, "That man who can figure out how one person can piss for another, will make a fortune." But some things remain most effective when you do them yourself. Learning is one of them.

That's why we developed the Income/Outcome business simulations, to allow individuals to develop their business acumen by experimenting, reviewing, discussing, and trying again. It's the best way to learn.

Robin Helweg-Larsen, Co-Founder

---

Use a "Stakeholder Checklist" to Find the Best Business Simulation

eliza d — Mon, 12 Sep 2011 10:00:00 GMT

A simulation that only looks at one department will be encouraging silo thinking, and may be inadvertently hurting other departments.

The value of the ‘big picture’

The purpose of business acumen training is to improve people's decision-making skills and thereby improve the long-term health of a company. This requires an understanding of how all the components of the business work together to achieve results, and how decisions in one area don’t just impact the bottom line, but also impact the ability of other areas and departments to make good decisions.

Ripple effects

For example, if Finance decides not to raise more capital, then Operations can’t expand, and then Sales can’t go after the largest (and potentially most profitable) customers. A simulation that only looks at one department will be encouraging silo thinking, and may be inadvertently hurting other departments.

Similarly, if only the views of a few of the stakeholders are given weight in the simulation, it may distance the learner from engagement and accountability. Why should they take that extra care if it only benefits, say, the shareholder? Including more stakeholders will help to create a big picture understanding of the needs of the business.

Stakeholder checklist

The best business simulations provide the view of all the stakeholders in the business:

Customers who want value: low price, high quality, extended payment terms, and more
Salespeople trying to increase market share
Operations, trying to improve efficiency
R&D and Marketing, both creating the future
Finance, trying to reduce cash flow needs
Suppliers who have their own businesses and want to be paid in a timely manner
Bankers who want to minimize risk
Investors who are prepared to accept risk in order to gain "shareholder value": short-term reward (dividends, share price) and long-term stability and growth
Senior managers who are responsible for holding it all together

Your turn

Which perspectives are emphasized in the business simulations you use? Which aren't included?

Eliza Helweg-Larsen, Co-Founder

---