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Published on Sunday, July 23, 2000 in HonoluluAdvertiser.com

by Jeff Crawford, Ph.D.

"Many executives fret over a lack of business savvy among their middle and junior level managers. Their difficulty grasping the complete picture of how different departments work together contributes to turf battles, confusion, and internal strife for many companies. Even star individual contributors from specialized areas such as human resources or information systems develop "functional myopia" that significantly degrades their effectiveness.

Until recently, expensive training or the school of hard knocks have been the only options to address this relative naivete, but that may be changing with the publication of Ernest Cadotte's "Marketplace: The Ultimate Business Competition." Marketplace is a computer simulation that exposes its participants to the most crucial aspects of running a successful business. It is the business equivalent to a flight simulator.

This surprisingly sophisticated software, used in undergraduate marketing classes offered by the Hawaii campus of the University of Phoenix, requires students to make design, manufacturing, marketing, and hiring decisions that are faced by all start-up companies. Struggling with these decisions in a "management team" of their peers, the participants gain understanding of the inner workings of each of the major business functions. They also gain some empathy for the people who actually perform those functions back in the real world of work.

The simulation is based on the new economy model of the desktop computer industry. The students begin by learning to raise capital and quickly progress to designing products with features that meet the demands of different types of customers. Sales forecasting, manufacturing capacity and scheduling, creation and placement of advertising, and the hiring of sales associates are just a few of the areas participants cover in the first "quarters" of the game. The software matches the participants' business decisions against projections of employee, customer, and competitor behaviors drawn from the past twenty years of computer industry experience. The student teams see the results of their decisions and learn from their mistakes. Finally, reading cash flow, income statements, and a balance sheet must be mastered to know if the team's decisions are producing profits or bankruptcy.

Despite having consulted to managers in all of the functional areas covered by the simulation, I found the game to be remarkably instructive. It gave me an appreciation of the complexity faced by each functional director as he/she struggles with inevitable tradeoffs. Also, competing against hypothetical competitors furnished by the software, as well as other student management teams, provided motivation and a surprisingly strong sense of realism.

Somewhat complex, the simulation is probably best done with an experienced facilitator who knows the game and can also highlight the participants' interpersonal behavior as they work with each other to solve business problems. This approach gives hands on experience with the business concepts while offering an opportunity to observe one's problem solving style in a team environment. Best of all, the cost of huge mistakes is measured in lost pride rather than dollars or career opportunities.

The Marketplace simulation is a useful tool for private sector decision-makers who want to experience the processes behind critical decisions outside of their area of expertise or public sector managers who wish to better understand the world of business."

Jeff Crawford
Ph.D. of Executive Assessment & Development
He can be reached by contacting the Business Section of the Honolulu Advertiser or by email at ExecDevelopment@usa.net.

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