Executive Sims

Trained as a scientist and an engineer, I never went through the 'case study' approach of the business school. Now it seems that many of the top business schools are starting to replace some of their case studies with more interactive simulations or games that can predictively present the outcome of various choices the players make. This is mentioned in the March 27 BW: The Sims: Executive Edition and a previous article on Virtual Workplaces in the Classroom.

As an engineer I applaud the idea, with some caution. Just like Sim City cannot really be used for effective city planning, simulations cannot be used to construct completely realistic models of the real world. Model building, we were taught, is often more about what is left out of the model, than what is included. Simulations like this are not new in the business world. In the mid 70s, new marketers at P&G were trained with an economic simulation that helped them understand the relationship of marketing investments to sales. That worked well because it helped them understand all the issues involved and their relationships. It could also be operated in a group like a competitive game. At the right is a more modern example screenshot of a system from the vendor Capsim.

What we have now are better and faster graphical interfaces which can make it look like you understand the many entities in a real-world simulation and how they interact. Building a complete and accurate model that can predictively determine the results of choices made is much harder. I see this as a requirement that the model needs to be combined with a 'case study', which includes many of the non quantitative, softer aspects of business relationships needed to understand the real world. One way to do this would be to introduce ways to include intelligence concepts that combine hard and soft aspects of the system.

The use of the models should also be more systematically brought into the business world. MBAs have been seeing less rigorous quantitative training over the last ten years. The use of simulations could lead students back into questioning the validity of the results they see. Or blinding following the predictions that simple models make! There is much work to do.