These days, many corporate learning functions are turning to simulations to develop and assess proficiency in everything from soft skills to business operations. When properly designed, these experiences give participants the chance to learn by doing in an immersive environment where it’s safe to experiment, fail and take away important lessons.
Now compare that to an MBA candidate competition that involves students evaluating problems presented in the form of business case studies and giving one-shot pitches on solutions to panels of judges that may or may not assess these solutions on objective, determinable criteria. Of these two, which learning experience do you think today’s B-school students would prefer?
Not surprisingly, BTS, a producer of business simulations, believes students would rather take part in the first kind of experience. The company put this conviction to the test when it recently conducted its first-ever University Challenge, a two-day competition held on the 66th floor of the Sears Tower in downtown Chicago.
Five teams of students from business schools at the University of Michigan, Notre Dame, Indiana University, Northwestern University and the University of Chicago participated in the competition. Each team was provided in advance with an overview of the fictitious company they’d be running. All of the businesses were in the biotech industry.
On the first day, after a brief introduction that laid out the parameters of the competition, BTS representatives stepped out of the way and let the teams get to work.
“We gave them the tools they’d use for the next two days, and we let them have at it,” said Steve Toomey, senior vice president and managing director of BTS’ Chicago office. “They effectively ran these businesses. We ran three iterations of operating the business, with each cycle representing about four to seven years, which makes sense in the biotech world.”
One of the first things they had to do was organize themselves into a corporate structure, said Rommin Adl, executive vice president and managing director of the Philadelphia office for BTS. “The teams are put into the senior leadership of these fictitious companies, and they have to organize themselves into the CEO and functional roles of the business,” he said.
Once the teams were organized, they began to formulate strategies according to the characteristics of their respective companies, as well as the “market” they were competing in. At one point or another, they all came across serious challenges, some that were embedded in the simulation.
“We lobbed business grenades into things,” Toomey said. “As they pursued different therapeutic areas, some ran into dead-ends. They expended hundreds of millions of dollars pursuing some new therapy or drug compound, only to find that it had a safety fail or that it wasn’t as effective as they’d hoped it would be or that they have to deal with different dosage requirements.
“It gets very specific in terms of the challenges that people run into while running a business,” he added. “Certain classes of drugs in the industry will get hammered, and anyone working on similar types of drug classes [in the simulation] will find FDA requirements significantly tightened.”
The teams that performed best were the ones that had a good long-term strategy, a good pipeline and efficient investment in resources — and also those that carefully watched the balanced scorecard metrics in the simulation. While the competition was close from top to bottom, Indiana University’s Kelley School of Business prevailed in the end.
However, all of the participants benefited from the experience and cited the iterative nature and clear competitive criteria as their favorite parts of the University Challenge.
“The competition was intense, but we were lucky to have a great team that was really able to focus despite the pressure of the situation,” said Shib Pramanik, a member of the Indiana University Kelley School of Business team. “This was about having a strategy, implementing it and changing it as per-market movements. Strategy, operations, finance, economics and marketing all came together in this competition. [It was] truly an awesome experience.”