Lecturer's blog 14: "Serious gaming in workshops" by Charlie Carroll

I had been struggling for a long time trying to get students engaged in a strategic management course. The students were in a different program and they didn’t see the relevance of strategy. That apathy quickly changed when I introduced a business simulation (a.k.a. serious gaming) in the workshops. More specifically, GoVenture CEO was integrated into the course, and students started competing head-to-head as smartphone manufacturers. Subsequently, the average response to the statement “I was more engaged in the course because of the CEO strategy simulation” was 4.8 (out of 5)!

The teachers were equally enthusiastic because it reduced their workload. Students always complain that they want more (and quicker) feedback. The simulation shifted (most of) the heavy lifting off the shoulders of the overworked teachers by providing extraordinary detailed feedback immediately after the end of each round. So students were working more, teachers were working less, and both sides were happy.

Of course, education isn’t simply about entertaining students. There are important learning objectives that need to be achieved. Rather than just having students memorizing the content of a course, I would like them to learn how to think strategically. There are lots of different types of simulations. Many have students play against an artificial intelligence (AI) algorithm, which is often based on a narrow theoretical perspective. Those simulations often have a trick to winning, and once that is posted on the Internet, the learning effect of the game is lost. Instead, I chose a simulation in which the students compete head-to-head against each other. The simulation is merely the platform on which they compete.

The simulation is based on decision-making rounds in which all firms (teams of students) lock in their decisions at the same time without knowing what their rivals are planning to do. Typically, teams start with a very naïve approach by choosing the most profitable characteristics of their phone based on consumer profiles—as if they were the only firm in the industry. Of course, all of the other teams are looking at exactly the same data. If all the teams make the same (naïve) choice, the niche that initially looked so attractive would be flooded with far too many rivals, making it extremely unprofitable.

Consequently, the greatest challenge for each firm is to predict what their rivals will do so they can make more informed decisions about their own actions. However, no one can know for sure what their rivals will do until the round is over and the actions of all the firms are published. The point is that strategy does not occur in a vacuum. Teams need to predict their rivals’ actions, and then try to outmaneuver them. For instance, if competition is likely to be very intense in the most obvious (naïve) strategic positions, a clever team might identify a “blue ocean” strategy—going where the rivals will not be. It might be more profitable to be the only firm serving a smaller market than being one of many firms fighting for survival in a larger market. Metaphorically, it might be a smaller pie, but you get a bigger piece of it.

Notably, the winning strategy will depend on what all the firms do, and this changes every time the game is played. Students are encouraged to learn from experience—not just about the game, but also about their rivals. Do they show predictable patterns? Of course, it is easy to see what the winning firm did in the previous round, and losing firms have incentives to copy that strategy in the next round. Arguably, this can be as naïve as targeting customers without recognizing that rivals can see the same information and can make the same choice. If many copy-cat rivals swarm to the same position, then that formerly winning strategy will become the newest losing strategy. The lesson being that it takes creative thinking to find a successful strategy that other firms have overlooked. In contrast, “me-too” strategies require very little thought, but the rewards are correspondingly low. There is little point in entering a blue ocean just as it starts turning red.

Students need to put themselves in their rivals shoes and consider what they would do under those circumstances. This can lead to bluffs and counter bluffs as teams try to send false signals to mislead their rivals. One team got carried away with trying to get into the minds of their rivals. They literally copied the name and logo of a rival firm, “just to mess with their heads.” I gently explained to them that it is also possible to simulate being sued for copyright and trademark infringement in the game, so they should stop immediately. But, on the bright side, at least they were thinking strategically about their rivals.

Business simulations can be very flexible. Instructors can decide to turn business functions on or off to fit the topic of the course and the level of the students. For example, I use a stripped-down version of the CEO game for second year bachelor students. For master students in Accountancy & Controlling, I create a more complex version by turning on the accounting and financial functions which provide detailed spreadsheets. So, there is the potential for synergies (economies of scope) across courses and programs.

I also link weekly assignments to the game. To reduce the workload for teachers, each paper must be less than 300 words. To put it in terms of a thesis, we skip the literature review and the methods sections. Those details are easily assessed on an exam. I only want to see the results & discussion section. How did the results of your analyses guide your actions in the game? While the topic changes from week to week, this question always remains the same.

If you are currently thinking about updating the cases used in your own workshops, you might want to check out the simulations that are available in your specific field of study. Simulations can provide a welcome change of pace, and the dynamic, interactive nature of simulations can enrich the learning experience for your students.