CNN(International).com, Executive Education, online article featuring the EagleRacing simulation (pdf)

"Inner circle" series of Economist Intelligence Unit articles published by the in 2009 (pdf);  (initial interview done by Clint Witchalls on June 6, 2007, for the Economist Intelligence Unit)

INSEAD Knowledge article, December 2008 (pdf)

ICT Results interview (pdf)

Bilan interview (pdf)

  • "Serious Games" (by Cyril Jost, Bilan No.250, 21.05.08, in French)


Tackling business problems with online games

LONDON, England (CNN) --

Picture this: You work for a racing car company that needs to raise $18 million in sponsorship. Do you go with a reliable sponsor that can only offer part of that sum, or take the full $18 million from a company getting bad press for selling arms to a Middle Eastern country?

That's the scenario of "Eagle Racing," a video-based business simulation designed to teach collaborative decision making.

It was developed at the Center for Advanced Learning Technologies (CALT), run by business school INSEAD, and it's an example of the kind of simulation used by business schools and companies wanting employees to hone their business acumen.

Business simulations have been around since the 1950s, starting out as little more than business-themed board games. But as technology has improved, simulations have become increasingly sophisticated and widespread.

Realistic simulations can teach general skills, like decision making, or allow participants to try their hand at all manner of specific business disciplines, be it finance, accounting, marketing or human resources.

Dr Annette Halpin is Vice President of the US-based Association for Business Simulation and Experiential Learning, and chair of Business/Health Administration and Economics at Arcadia University in Pennsylvania. She says that computer-based business simulations are now widely used on MBA courses.

"Simulations are becoming increasingly important in business education because they create a reality for students that can't be taught by textbooks," she told CNN.

But simulations aren't only used by business schools -- they are equally in demand with companies wanting to arm employees with new skills.

BTS is an international company that produces simulations for clients including Coca Cola, Procter & Gamble and ING.

Willem Pennings, a Senior Consultant at BTS, told CNN that businesses approach BTS to request custom-made simulations that replicate the way their business functions or that teach specific skills. A custom-made BTS simulation can cost a business anywhere between $500,000 and $800,000.

While the exact nature of any simulation depends on a company's requirements, Pennings says they are often designed to give participants a holistic view of their business, allowing executives to experience how other departments function, without having to actually work in those departments.

He gives the example of a simulation that lets someone who works in marketing make financial decisions so that they develop a better understand budgeting issues.

According to Pennings the advantage of simulations over other teaching methods is that they let users apply the theoretical knowledge they have learned. And he says the economic downturn has benefited BTS as businesses focus on training their staff to be more efficient and more aware of profitability.

Professor Albert Angehrn works at CALT, in Paris, where he develops interactive technology for management training. The simulations developed at CALT are widely used in business schools and by companies including IBM and BMW.

"Simulations are seen as an important component of management development because they put people directly into a scenario, and that means there is stress and emotion," he says.

Angehrn says that business simulations have traditionally taught more quantitative skills -- for example a finance or marketing simulation might allow participants to work out how much money should be allocated to advertising.

But now simulations have been refined to teach more "soft skills," addressing people dynamics, such as driving change in organizations and making companies more collaborative.

He adds that while simulations are suitable for individual learning, their real value comes when they are carried out in groups, with participants from different disciplines working together and sharing knowledge.

The internet has revolutionized the way business simulations are used. Where an administrator once had to manually input the participants' in-game decisions into a computer, users can now input their own decisions online. Online simulations allow employees from different companies to take part in the same simulation and can add an extra dimension to online MBA courses.

Angerhn says there is a trend towards "massive" online simulations that allow hundreds of users to simultaneously participate in a scenario. He says these are popular with big organizations, such as IKEA, that want to rapidly increase know-how across the company.


As for the future, Halpin thinks that business simulations will become more immersive, incorporating the visual elements of virtual worlds like Second Life. That could provide an even more realistic experience, and if the old adage is to be believed, experience is the best teacher.




Enabling Business Flexibility

All change

Companies spend millions of dollars on new systems, and are then surprised when no one wants to use them. If organizations were run by robots, implementing change would be easy; humans, however, are tricky creatures to deal with. Millions of years of evolution have primed us to regard change with suspicion and fear. While a new enterprise resource planning (ERP) system is hardly the same threat as a sabre-toothed tiger, our fight or flight response when faced with something new is hard wired. Even the most benign change triggers some form of resistance, so it is surprising that change management is often treated as an afterthought, a mere tick-box labeled“provide training.”

There are a number of reasons why change initiatives fail: insufficient executive support, unrealistic expectations, ineffective leadership, and so on. But according to Albert Angehrn, professor of information technology and entrepreneurship at business school INSEAD, the biggest cause of failure is resistance to change. “The capability to identify and address different types of resistance is therefore a key competence which is unfortunately not very well-spread,” he says. This may explain why more than seven out of ten change initiatives fail .

Habituating people to something new takes time and repetition. Of course, in the change curve, there are the 10% of early adopters who do not need much convincing, there are the 10% who will never accept the change, no matter what you do, but that still leaves the 80% in the middle who need to be persuaded. The important point in addressing the 80% in the middle is not to treat them as one undifferentiated mass.


Know your audience

Carmel McConnell, author of Change Activist: Make Big Things Happen Fast, says that people’s intelligence is often discounted at the beginning of change programmes by senior managers. “Their view is that I can get my career boosted if I get this project in on time and budget,” she says. “If I can get everyone else to not completely rebel, then that would be wonderful because that would be better than the last change effort.”

Companies need to have enough respect for their employees and other stakeholders to take the time to explain why the change is happening, even if there is not much in it for them. Ms McConnell says that if you want to engage people you have got to be honest.

It is important to consider every group affected by the change and to tailor your message accordingly. A customer is likely to view your new customer relationship management (CRM) system differently from an end-user, who will again see it differently from a C-level executive.

Organizations need to decide what they want from each stakeholder group, whether it is their involvement, their buy-in or simply whether they need to be informed. For change to be successful the communication should be personal and inclusive.

At a different level, change leads to stress, and too much stress leads to people walking out the door. Forward-thinking firms (particularly investment banks and bio-technology companies) have come to realize that if they get the best people and keep the best people, that talent will drive their unique selling proposition. But to attract and retain the best people, you have to treat them with respect, and that includes involving them in change from the outset.


Looking beyond carrots and sticks

Having the right environment to try things out can often go a long way to alleviating fear. Researchers – and, more recently, companies – have discovered that simulation games can provide a safe haven for exploring change before it happens.

At INSEAD, Professor Angehrn has been studying the role of simulation and games in managing change.

For more than ten years now I have been a strong believer that the best way of learning for managers is learning-by-doing (experiential learning) and that the next frontier in experiential learning is learning-by-playing, which adds a collaborative dimension to both learning and action,” he says.

Of course, when you roll-out the finished product – whether a new system, new process or both – the recipients of the change will still meet a number of unintended consequences, but at least they will be more ready and willing to give it a go.

But using simulations and games is not just some ivory-tower exercise; it is starting to be accepted as an effective way to manage change in the corporate world. IKEA has used a simulation tool from INSEAD to successfully support its largest change management projects related to the redesign of their global supply chain processes. The same applies to the FIAT Group, the largest Italian industrial group which had to undergo extreme changes over the last few years.

Even in the public sector, games addressing change management are starting to be used more extensively. A good example is the Scottish Executive, which has used simulations for some years to provide decision makers in the public sector with advanced change management competencies.

Professor Angehrn says that simulation games for addressing change management are emerging as an effective way to help managers understand and master complex organizational interventions. The games give change managers first hand experience of how difficult it is to segue from strategy to implementation. It gives them a chance to try different strategies and management tactics to smoothly introduce change and innovation when faced with different forms of resistance, from defensiveness to apathy. It also gives them an insight into how ideas spread through an organization– change in organizations does not take place linearly, but spreads like epidemics – and the political insight of dealing with informal networks of power.

For successful change to happen, companies do not have to deploy high-tech solutions like the computer simulations, but “learning by doing” should still form a big part of any change initiative. Knowing and interacting with what you are dealing with helps to overcome resistance, especially if the change comes from outside the organization, such as through a merger or acquisition. Remember, change becomes hard wired when personal insight occurs, so provide a safe test environment where those “ah-ha” moments can flourish. But even with this all in place, do not expect change to be easy.


Effecting change management: a reality with the LingHe Simulation?

-- Karen Cho, INSEAD Knowledge, December 2008

With China’s business environment undergoing fast and significant change – partially driven by the introduction of information and communication technologies into business relationships – managers now need to be more effective than ever in implementing change within their organizations.

But just how effective are they? According to Albert A. Angehrn, INSEAD Professor of Information Technology and Director of the Centre for Advanced Learning Technologies (CALT), the truth is that the vast majority of change projects in organizations fail, some miserably. Failure in this case, he says, means that performance targets are not achieved, as new ways of operating are not integrated and adopted to the extent that would allow organizations to profit from them.

While there’s no lack of knowledge as to how to address change initiatives, Angehrn says we have not been successful in translating that knowledge into practice. We simply don’t know how to move from the relatively comfortable area of ‘knowing’ to one of actually ‘doing.’

Change is coming

This is further compounded with Chinese managers operating in China. China’s policy of economic reform has opened her markets to foreign trade and investment. The resulting increase in collaboration between Chinese and foreign managers has brought an interesting new dimension to learning how effectively to introduce innovation – and change – in culturally-mixed environments.

Chinese managers today are facing change on a scale and at a pace that have previously been unseen, and for which there exists little or no relevant past experience. Western managers are not exempt either, as they too need to adapt their managerial styles to better suit the Chinese context and environment.

Enter the LingHe Simulation, a computer-based interactive multimedia simulation that models the dynamics of organizational change in a typical Chinese business environment. Its purpose: to simulate real-life scenarios faced by Chinese and foreign managers who want, or need, to implement organizational change at China Inc.

Creating the LingHe Simulation

Modeled after the Executive Information System (EIS) Simulation, which has already been used extensively as a learning tool in MBA and corporate management training programmes in Western organizations, LingHe is unique in that it is tailor-made for the China market. More specifically, it is aimed at those responsible for introducing and implementing knowledge and innovation strategies in China. This includes CEOs, CIOs, general and project managers, heads of departments, and other key decision makers.

To authenticate the simulation, a framework for the company was constructed. Angehrn and his partners invented a fictitious business enterprise called the LingHe Company (LHC), a switching equipment manufacturer located in Changsha, the capital of Hunan province. The intention was to portray a company that was still relatively remote from Western influence, based in a region with a moderate pace of economic change so that the need for further change was not felt very strongly. The description of the company as moderately profitable further reduced any urgency to change.

However, a twist of fate saw LHC being sold to SinoCom, China’s largest national telecom operator. The move was intended to induce LHC to adopt managerial best practices and to consolidate the national telecom industry in the face of foreign competition. An employee from SinoCom has been dispatched to help LHC executives adopt its highly-regarded computer-based performance management system. An uphill task no less, especially when computer literacy, profitability and personal objectives are not yet standard operating procedures at LHC.

Therein lies the challenge of the simulation, a critical component being the influence tactics or initiatives that managers choose to convince the people in an organization during the process of adopting proposed changes. With no two organizations being identical, tactics that may work for one may be ineffective or counter-effective for another.

After conducting more than 100 interviews with top and middle-level Chinese business managers, 19 typical tactics for organizational change in China were shortlisted, and these would become the template for the simulation. The simulation was tested yet again, this time on both Chinese and Western managers in a series of four workshops held in Nanjing, Beijing and Europe.

Learning by mistakes

Besides being recognizable and realistic, Angehrn says the simulation also has to be challenging in order to “force” managers to make mistakes and avoid “quick-fix” solutions.

Though the simulation provides immediate feedback (positive, neutral or negative) following each decision taken, this unorthodox approach is not without its detractors. Angehrn notes some initial resistance by Chinese managers in particular, because the simulation does not correspond with traditional Chinese methods. His research has also revealed that people in higher positions were less willing to “play” along, as they would rather not fail in front of their subordinates. Most however, he says, gradually warmed to the “game” dimension, where making mistakes is permissible and even intended.

“Simulations are effective pedagogical tools. They are designed to make you fall into traps and make you aware of what you could do wrong. They show that you are going to fail so that we can discuss this and open up issues, and really understand where we can add value to develop further competencies,” he says.

“Now this approach is clearly exposing the individual, which in my belief is key for learning. If people are not put at their limit of their incompetence and realize that they can fail, they have no motivation to really learn. We try to advocate that it is only through failure that we can learn something.

“For instance, only through a simulation as LingHe, can managers fully realize that much of the resistance faced when implementing change is actually the indirect result of their own way of proceeding. Ultimately, they themselves are the ones generating the very resistance that kills their projects. It’s a very important insight that can only be fully understood through experiential learning approaches as the LingHe Simulation.”

The payoff

By and large, simulations can trump traditional learning tools and techniques, such as lectures, or even participating in short role-playing exercises, as they can capture a significantly higher level of complexity and create a life-like experience in a risk-free environment.

For example, of the 19 listed change tactics, the ‘task force’ tactic, which is often used in Western companies to engage selected individuals from within the organization as change agents, did not receive strong backing from the participating Chinese managers. This indicates that Chinese managers would not be active in appointing change agents or in wishing to be appointed to perform that role.

Similarly, the management training tactic is not used by Chinese managers, whereas it is widely used by Western managers.

The ‘electronic mail’ tactic, broadly used by Western managers, is also not popular with Chinese managers, who do not have the habit of checking their email frequently and are inclined to use traditional communication tools.

While the overall evaluation of the LingHe Simulation among groups of Chinese managers has consistently showed positive feedback regarding its realism, Angehrn says more substantive testing is required in order to validate further the use of the LingHe Simulation as a learning tool for Western managers who wish to introduce change in a Chinese environment.


Designing effective simulation games to address complex management subjects such as change, collaboration and innovation is one of the key challenges of INSEAD’s Centre for Advanced Learning Technologies (CALT). This activity goes hand in hand with the analysis of the impact, be it short or long-term, that such simulations have on the organizations which deploy them with their managers.

As an example, take for instance ChangeMasters, which was a large EC-funded study that CALT has recently completed on the impact of change management simulations on organizations as IKEA, the FIAT Group, and the Scottish Government. Similar studies are now ongoing that will serve to better understand and validate the impact of the “China-centered” LingHe simulation on increasing the change readiness of individual managers and organizations.”


Teaching experience

Business veterans claim you cannot teach ‘experience’, but European researchers say you can. The team developed software that helps players acquire real-life skills and realistic experiences through game playing. But this game is no executive toy.

The interactive software has caught the imagination of world-class business colleges in the USA and elsewhere and it has prompted enormous interest in Europe’s leading corporations. ChangeMasters represents an emerging shift in business education, based on realistic computer games.

Colleges and companies believe it gives students real-world skills through ‘experience’. “Experience is the best and simplest way to learn anything, that is why it is so valued in the business world,” explains Professor Albert Angehrn.

ChangeMasters focused on change management, one of the most important elements of modern business. Change is essential to responding to dynamic markets, consumers, competitors and innovation, and change is one of the most important themes in corporation history.

Protectionism was replaced by globalization, in-house departments to outsourcing, functional to process-oriented organization. Change is constant. Even housekeeping tasks, like moving to new computer systems, or daily business activities like new product development require changes to the way an organization works.

Executive games, seriously

But change is hard, rarely goes smoothly and often courts disaster. ChangeMasters plans to make the process easier by equipping executives with real-life skills and realistic project management experience using a serious game. Serious games attempt to achieve real-world results through video game technology.

The ChangeMasters game contains hundreds of parameters to define the corporation, its people and the project.  “It defines the corporation’s character and culture, formal and informal networks, all the elements that compose the dynamics of an organization,” reveals Angehrn.

It can even represent Western, Latin American or Asian cultural attitudes accurately. “In China, for example, etiquette and attitudes are very different, so a successful strategy in Europe might fail in China. ChangeMasters can reflect these cultural differences,” Angehrn notes.

But it also makes clever use of informal aspects of corporate life. Informal networks, like the water cooler or coffee room, the psychological attitude of individuals, like openness or resistance to change, and even the status of individuals within the organization.

“Some people have enormous influence in a corporation or department through their reputation, or their informal networks of co-workers,” notes Angehrn.

Typically, teams of managers work together to play a game for 90 minutes. “It is not aimed at individuals,” says Angehrn, “And we recommend that it is run as a seminar, with a large number of staff forming teams to run through the change scenario, but some companies, like Ikea, run the game in small workshops.”

The limits of compulsion

The game allows teams to employ theory through various strategies, including compulsion, but each strategy chosen affects other parameters that can blow up later. “Compulsion is not very effective,” warns Angehrn, “Because it can increase resistance.” Just like in real life.

Afterwards, the game players are debriefed on their strategy and the lessons of the exercise are driven home.

The game is very difficult. “Nobody wins, nobody manages a painless project. I think this is the way it should be, it should be challenging and it should reflect real life. It tests the limits of managers’ confidence. The idea is for people to learn lessons and acquire new skills before carrying out a task in a realistic scenario,” Angehrn explains.

But for all its difficulty, ChangeMasters is not insincere. “People wouldn't play the game, or would complain about it loudly if they thought it was ‘fixed’,” reveals Angehrn.

In fact the opposite is the case, and players rave about the impact of learning sessions with ChangeMasters, commenting that it has changed their way of approaching a project. They say it gives them new tools, and a new understanding of the issues involved in change management.

Not quite Second Life

The game does not look like many modern games. “We initially produced an interface like the online game, Second Life. It had a 3D, richly visual environment. But executives spent too much time exploring the environment rather than playing through the games,” he says.

Instead, the screen uses graphs, text and buttons to offer an overview of the game status, track emerging developments and offer players a choice of actions.

The game incorporates the familiar tools of corporate communication, including newsletters, emails, memos, executive information systems (EIS) and formal networks like personnel in a specific department.

Ultimately, though, the game is about helping executives to acquire and practice useful skills, and many organizations, like Ikea, Fiat and the Scottish government, believe ChangeMasters achieves that.

Some of the world’s top universities, too, are enthusiastic, and ChangeMasters is used at Cambridge and INSEAD in Europe, Yale, MIT, Stanford and many other of the top-tier institutions in the USA, and CEIBS, the top Chinese school. The ChangeMasters simulations were based on work at INSEAD’s Centre for Advanced Learning Technologies (CALT).

ChangeMasters has refined the technical platform and is launching offices all over Europe under the brand AlphaExperiences. Initially, it is offering change management as the primary product, but the game engine itself could be adapted to other scenarios, like product development, and the partners will work on expanding that content.

Ultimately, however, ChangeMasters has an even larger vision, where it will offer a channel for other high-quality business education software to one day, perhaps, become the Amazon of executive education.

The ChangeMasters project received co-funding from the eTen Programme of the European Commission.

«Les jeux de simulation poussent les employés à se surpasser»

Albert Angehrn, professeur à l'INSEAD, est l'un des précurseurs de l'apprentissage du Management au travers des «serious games». Une méthode de plus en plus souvent utilisée dans les entreprises.

Par Cyril Jost - Bilan No.250 - 21.05.2008

Comment favoriser les processus d'apprentissage au sein de l'entreprise?

Depuis quelques années, les serious games (littéralement: «jeux sérieux») proposent une réponse à travers la simulation informatisée. A l'occasion d'une conférence atelier organisée en partenariat avec Bilan (lire en bas de page), nous avons posé quelques questions à Albert Angehrn, professeur à l'INSEAD et inventeur de la méthode Executive Information System (EIS), un outil de formation utilisé dans des entreprises comme Ikea, Credit Suisse, BMW ou DHL.

A quoi servent les «serious games»?

Les cadres supérieurs sont souvent entourés de gens qui leur disent qu'ils font tout juste. Ils perdent ainsi l'habitude de se mesurer aux autres. Le jeu est une excellente façon de motiver ces gens à se surpasser. C'est aussi l'occasion de leur permettre de tenter des expériences et de se tromper, ce qui n'est pas toujours possible dans la vraie vie d'une entreprise.

Le Management ne s'apprend tout de même pas grâce à un atelier d'une demi-journée…
Bien sûr, le Management est souvent une affaire d'expérience et de bon sens. Mais il y a aussi des phénomènes plus complexes, que l'on n'apprend pas forcément par la pratique. Par exemple, avec notre simulation, les participants apprennent qu'un changement important se diffuse comme une épidémie, en s'appuyant sur les 2 à 5% de personnes au sein de l'organisation qui se chargeront ensuite de convaincre tous les autres. Cette notion de diffusion «virale» du changement ne s'acquiert pas par intuition. C'est seulement à travers le jeu et la simulation qu'on peut véritablement s'entraîner.

A quoi ressemble concrètement une simulation EIS?

On divise l'assistance en petits groupes de 3 à 5 personnes. Chaque groupe se met en face d'un ordinateur et joue le rôle d'une équipe de consultants. L'entreprise qui les engage souhaite harmoniser les processus dans l'ensemble de ses filiales. Les consultants se retrouvent dans l'une de ces filiales et ont six mois (soit une heure et demie) pour convaincre le Management d'adopter ces changements. C'est typiquement le genre de situation que l'on rencontre en cas de fusion de deux entreprises.

D'autres scénarios possibles?

On peut changer les paramètres et situer le jeu en Chine; du coup, les règles de Management sont évidemment totalement différentes! On peut aussi décider de conduire cette simulation au sein d'une entreprise familiale ou dans une université. A chaque fois, il faut adopter une nouvelle stratégie pour introduire le changement avec succès.

Hormis la résistance au changement, y a-t-il d'autres thèmes que l'on peut modéliser?

Nous avons mis l'accent sur trois domaines: le changement, la collaboration et l'innovation.

Des pays sont-ils plus réceptifs que d'autres aux «serious games»?

Les pays scandinaves et les Etats-Unis sont des précurseurs. En revanche, au sud de l'Europe et notamment en France, les gens sont encore très sceptiques. En Asie, les méthodes d'apprentissage sont traditionnellement très peu interactives, mais c'est en train de changer rapidement.



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