Business simulation 'tournaments' encourage learning by doing, not by reading

I should preface this entry by saying that I read ALOT both in hard copy and online, so I'm not necessarily suggesting that you DON'T read new books and blogs and essays that get you thinking about how to manage differently. But experiential learning, especially online, is definitely a trend you should consider.

Some of the world's biggest and most successful companies -- including Nokia, Accenture, Sony, Phillips, Rolls-Royce, Novartis, Ernst & Young, KPMG, IBM, Hewlett-Packard and Cisco -- are encouraging up-and-coming management candidates to participate in such an experience, the BTS Global Business Tournament, to build the skills they need for their next step up the corporate ladder.

What makes the BTS tournament a bit different from other business simulations is the fact that it is run completely online, which means companies do not have to cough up the money for travel while still helping individuals from different branches or locations learn to collaborate with each other. Also, there actually is an end-game: The top three teams each year can win a round trip to Cannes, France.

Rommin Adl, executive vice president of global sales and marketing for BTS and head of its Philadelphia office, says experiential learning has been shown to result in a higher retention rate than other educational methods. But the repeat participants from its bluechip client list, including three-time winner Nokia, also are responding increasingly to the sustainability factor of this learning method: All of the team interactions over the 10-week simulation projects are virtual, which means educational activities won't negatively impact a company's carbon footprint. They can also take place off-hours, which means employees can work during the course of the simulation process.

The simulations work pretty much like you would expect. Participants are introduced to a business that has a certain financial statement and industry profile and certain challenges associated with it. The simulation spans four years in the fictious company's life, and the teams (usually four or five individuals) are required to make management decisions during each phase of the simulation. The decisions require financial, process, human resource and marketing insights. Based on the impact of their decisions, the teams will see after each heat how they stand in comparison to other teams, which keeps things competitive.

Incidentally, BTS hasn't formally added a sustainability component to the simulations it uses but Adl and I discussed this idea. After all, this increasingly will be a factor in future management decisions so it technically should be part of future simulations.

One other note: Adl observes that the simulations are popular with participants in their 20s and early 30s, individuals who are used to the idea of online gaming and who are more comfortable with the experiential learning process. Not really surprising, but a consideration when you're thinking about who to pick as a participant.

There are nine tournament heats every year, and about 900 teams participate in a given year. Many of the participants join through referrals. There is a fee to participate, but Adl would not disclose it. The next heat begins on Sept. 9, 2009.

This post was originally published on Smartplanet.com