How UW-Madison’s innovative business simulation program builds business expertise “risk free” in a simulated environment that tests and improves strategic planning and decision-making skills.

By Bill Shepard

There’s a lot to be said for the school of hard knocks.

But in the business world, “hard knocks” can be devastating.

One or two bad decisions could result in the loss of lead times, market share, competitive advantages and revenue.

If only you could boost your business experience “risk free” in a simulated environment where you also could test and improve your strategic planning and decision-making skills.

Luckily, the University of Wisconsin-Madison has a solution.

That’s because UW-Madison Executive Education within the School of Business offers precisely this kind of valuable learning experience through “Building Value and Driving Profits,” an innovative business simulation course that has drawn rave reviews from executives throughout Wisconsin and beyond.

“Business failures usually don’t result from bad strategies but instead from poor implementation,” says Program Director Chuck Krueger, who also is an associate professor and chair of Executive Education at UW-Madison’s School of Business. “This program focuses heavily on implementation that is grounded in sound business strategy. It gets business people out of their ‘silos’ and gives them a result-oriented learning experience that will help them succeed professionally.”

Krueger conducts each session of the program along with co-presenter Jim Tarala, chief information officer/chief technical officer of Schenck Business Solutions, a Wisconsin-based business-consulting firm. Although the program is tailor-made for newly promoted managers, management teams and those responsible for multiple business units, Krueger says a number of people have benefited from taking part in it.

“We’ve had everyone from technicians through company presidents take this course,” Krueger says.

“And they’ve run the gamut in terms of the different kinds of businesses they represent, including manufacturing, banking, insurance and utilities,” adds Tarala. “This is a great program because participants from different industries work together to test themselves in ways they normally cannot in the ‘real world.’”

Learning by doing

“Building Value and Driving Profits” packs five “years” of experience into three days, simulating the complex level of planning, tactics, decision-making and trouble-shooting involved in running a multimillion-dollar enterprise. During each virtual year, participants see how their decisions impact their customers, market share and the bottom line.

How does the program work?

During the first day, participants take part in wide-ranging discussions on best practices, goals, change and other topics. Next, they form into management teams, each of which is responsible for running a $100 million company, using the Capstone® computer-based simulation program. Each team decides on a corporate strategy — as a value leader or price leader, or as a low- or high-volume boutique business. And then the teams go head-to-head, vying for first place at the end of the three-day learning experience.

“I really enjoyed the friendly competition in the program, which gave it an interactive, ‘real world’ feel, where you try to outmaneuver and outsmart your business rivals,” says Todd Martin, vice president of manufacturing at Metal Technologies in West Allis, Wis.

Throughout the remainder of the program, the teams continue to navigate their virtual companies through an increasingly complex simulated business environment, learning to build value and maximize profits through a range of initiatives, including:

• optimizing the mix of product lines;
• pricing products effectively;
• ensuring that production can meet demand;
• developing marketing and sales strategies and tactics;
• focusing on customer needs;
• interpreting financial data for key business decisions; and
• developing operating metrics to maximize efficiency, productivity and profitability.

The program also helps its participants develop the skills and know-how needed to successfully take on external challenges, including:

• changing material and labor costs;
• increasing competition; and
• technological and financial market changes.

“I gained a greater understanding of how these external factors impact operations, which is my area of focus, as well as how they affect other internal processes,” says Tracy Gundert, vice president of operations at Omnipress in Madison, Wis. “This outward focus has helped my effectiveness at work by offering greater insights about how to better respond operationally to a dynamic market.”

Immediate results, lifelong lessons

At every step of the way, each team’s key business decisions are entered into the Capstone® business simulation program, which immediately produces the results for all to discuss and analyze.

“It’s a tremendous learning experience when these teams can see the results of their business decisions almost instantaneously,” explains Krueger.

Martin points out that his company already has reaped financial rewards from the lessons he learned.

“By increasing plant utilization and spreading it out evenly among our five plants, we’re more efficient and boosting productivity,” he says.

Tim Sievert, a product development manager at Strattec Security Corp. in Milwaukee, notes the program gave him a “much broader, well-rounded picture” of how the various parts of his company affect each other.

“It’s helped me build better relationships with sales, marketing, finance and other parts of my company, because I have a much greater understanding of their priorities, needs and objectives,” explains Sievert.

“For me, the biggest benefit was getting more in-depth knowledge about financial metrics as a tool to measure performance,” Gundert comments. “The program also helped me realize how fast the competition can change, and how to develop a proactive strategy to stay ahead of it.”

A cost-effective, flexible program

Businesses are attracted to the high value and low cost of “Building Value and Driving Profits.” It costs $1,895 for one to two people from the same organization, and up to $7,995 for groups of five to six people.

Not bad, considering the vast amount of hands-on learning that participants gain.

“I looked at similar programs at other schools in Wisconsin and Michigan, and the ‘Building Value and Driving Profits’ was the overall best for cost and content,” says Sievert.

The program is flexible in terms of where it can be offered: at the world-renowned Fluno Center for Executive Education at UW-Madison, or on location at the companies that enroll their employees in the program.

“Professor Krueger’s experience, skill set and knowledge of the topics made the class very educational, interesting and fun,” exclaims Martin. “I truly believe UW-Madison's Executive Education program is the best in the country, and I'll continue to utilize the program for my future educational needs.”

Visit our archives to read articles from previous issues of the UW Business Wire.

UW-Madison on the cutting edge:
Then and now

Business simulation is nothing new to UW-Madison, says Chuck Krueger.

“This format of learning dates back to the 1970s on the UW campus, even before my time,” Krueger explains. “In the early 1980s, I originally became enthralled with business simulation used in an Executive Education course while working with my predecessor, Professor Ray VanderWeele.”

At the time, simulations were crude by today’s standards, but since then, the increasing power of the personal computer made simulations more dynamic and robust. For approximately 15 years, Krueger has been offering and refining his business simulation course, now known as “Building Value and Driving Profits,” in both public and custom programs.

“As the software of the actual ‘game’ has evolved, so has our structure and instruction,” Krueger comments. “We combine traditional classroom segments to introduce new topics for each round, and then the teams go directly into their analysis and decision-making mode, integrating the most recent subject matter with what they have learned. Every round will be different, based on each team’s unique set of circumstances and decisions.”

But the theoretical foundation of this innovative high-tech business experience dates back thousands of years.

“This approach to learning and application points to the Socratic method of teaching by asking instead of telling,” says Krueger. “In the program, we guide the participants to find the answers on their own instead of telling them.”