Strategic Entrepreneurship - Learning from Business Simulation Games

Strategic Entrepreneurship - Learning from Business Simulation Games

Antarpreet Singh, Director – Digital Learning, Indian School of Business, 0

Antarpreet is a leading thought leader in Digital Education and Human Capital development space.

I led a three member team from Fujitsu to 6th National Management Games (hosted by AIMA). There were 50 teams in all – each representing a well-known company/business group in India. We kept advancing in the competition – slicing & dicing huge data coming our way thru management reports after every round (a financial quarter), learning from mistakes and continuously refining our business strategy. On the penultimate day, we had made it to the finals (8 teams). The competition was intense – we were the lone team (among the finalists) which was playing the tournament for the first time. The competition reached a climax with just two fiscal quarters left. I must say that it was a nerve-wracking experience. Simulations Game is not about numbers – it tests leadership & team skills, ability to withstand pressure and translating strategy into actual decisions, besides taking measured risks. We continued to hold our strong position and emerged as 2nd best company – finishing just behind a three-time national champion. The champion team from India qualified for the International management games.

Since then, my interest grew in business simulation models and I closely started watching the domain, as an experiential tool for Leadership development, Strategic Management education & Entrepreneurship development in B-Schools & industry. Let me demystify a business simulation games framework first, which focuses on three key perspectives:

a)Strategic Entrepreneurship
b)Business model
c)Digital architecture & advanced computing

A simulation model mimics a real business – the simulation designer must think like an entrepreneur. Let me make the concept of Strategic Entrepreneurship clear. I was delivering a guest lecture on ‘Strategic Entrepreneurship’ for a leading B-School. A young student asked me an interesting question ‘An entrepreneur does everything from strategy to operations – so why do we particularly use the term Strategic Entrepreneurship’? I answered by saying that Entrepreneurship deals with putting your organization in the right direction in alignment with your core purpose of business thereby making the right strategic choices. So Strategic Entrepreneurship will involve taking business decisions that will create sustainable competitive advantage for a company and as a consequence wealth creation for the stakeholders. Simulation games present a great way to learn Strategic Entrepreneurship experientially and deeply reflect upon the strategic choices you make. A good game would involve continuous debriefing by an experienced faculty, who will help participants learn from their mistakes (bad decisions) and handhold them to fine-tune their business strategy, thereby improving the quality of their business decisions.

It’s often said in the context of Strategic Management that the absence of competition in the industry will keep it in a state of equilibrium. The competition puts the overall industry ecosystem in a state of disequilibrium – creates inequalities. There is a common saying in entrepreneurial circles that in industry, a winner ‘takes it all’. A simulation game manipulates a number of industry
variables in a way that a winner creates much more wealth compared to all the other players (companies), put together. The winner is thus seen as an industry leader. This is a very important lesson for a management student/entrepreneur. This strategic entrepreneurship perspective helps participants in the simulation game acquire the mindset of a winner. The industry rewards winners disproportionately and in the same way, punishes laggards.

The next key perspective for a simulation game is centricity to a business model. The games for long have represented a conventional manufacturing industry, characterized by a scenario in which participants manage a plant, take key decisions related to capital equipment, maintain optimum inventory levels, distribute goods to fulfill customers demand ensuring that there are no excess inventories and no lost demand due to stock-outs. Our economy has transitioned to a state where services contribute heavily to country’s GDP. The new generation simulation games now use business models which represent services sectors such as retail, banking, insurance, and hospitality. We have also seen, in last eight-10 years, the emergence of new-age digitally powered businesses (B2B and B2C) – which leverage consumer internet such as e-commerce, digital payments, education, to name the few. SAAS (software as a service) business model too is emerging as new ways of offering business solutions to customers in OPEX mode. While we have plenty of simulation game versions available, representing a manufacturing and services environment – I have not come across games representing new-age digital businesses. Its time, the games industry starts building simulations centered around digitally powered new generation business models.

The third key perspective is to have a robust digital architecture while building the product (game) with focus on key capabilities:

a)Presentation – a UI which gives superior experience (CX) to a participant
b)Applications – mimicking the given business model & associated biz processes
c)Processing – advanced computing capabilities (processing based on robust logic)
d)Data management – organizing and securely managing companies & industry data

What we have seen in last 25-30 years is what I will term as ‘Static’ simulations. Though it’s tough for students to decode the business logic while playing, repeated use of a simulation game can help a student unbundle the business logic and understand business behaviour of the game. The students/entrepreneurs will be significantly challenged if the game becomes “dynamic”. The “Dynamic simulations” can be built leveraging the Artificial Intelligence stacks of today.

What we have seen in last 25-30 years is what I will term as ‘Static’ simulations

Machine learning algorithms can make the simulation game smarter (game will learn by itself) by posing new challenges to participants at different stages of the game and at times suddenly bringing in big disruptions (like COVID-19).

AI in next few years, will bring more dynamism to simulation games space and there will be an added thrill of playing in a marketplace with cutthroat competition and an added element of uncertainty. In addition to robust business strategy and high level of efficiency – students & young entrepreneurs will also learn how to make their (virtual) businesses highly resilient.