Good business simulations do two things well

Much as I love them, I don't think simulations are the answer to every learning problem.

If someone needs to understand a process, e-learning is consistent, accessible and can reach large numbers of people very efficiently.

If the objective is to transfer knowledge, a good teacher can often do that faster than a simulation ever could.

If the aim is to build trust or improve communication, I've seen practical team activities create enormous energy and enthusiasm and some great conversations about teamwork or leadership.

Different approaches are good at different things. So what is it that business simulations do well? Over the past 33 years I've watched thousands of people work in simulations. Looking back, I think they combine two characteristics that rarely occur together.

The first is emotional engagement. People care. They care because they're responsible for the decisions. They care because they're competing. They care because their choices have consequences. Before long, they're arguing over pricing, worrying about a lack of cash, celebrating success (or sometimes failure!). Nobody has to tell them to engage.

The second is commercial realism. Unlike many practical activities, the decisions are recognisably business decisions. Should we invest? How will we fund it? Should we protect margins or pursue sales? Should we collaborate with competitors? Should we sacrifice short-term performance for long-term advantage? There are rarely perfect answers. Only trade-offs.

If your organisation makes commercial trade-offs then business simulations sit in an unusual and special space. A space where people care about decisions that feel commercially real. And because they care, the reflection afterwards becomes that much richer.