-- When NetApp Inc. executive Suresh Padmanabhan signed up for a class on honing management skills, he expected whiteboards and PowerPoint presentations. Instead he found a conference room full of board games.
“It did look a little bit silly,” said Padmanabhan, senior director of the critical accounts program for the Sunnyvale, California-based company, which makes data-storage technology.
His impression changed fast. The games weren’t checkers or Monopoly -- they were complex role-playing exercises where each team ran a fictional company similar to NetApp. His group won the game by increasing operating margins to 19 percent (NetApp’s real operating margin was 15 percent last quarter).
“I’ve been at NetApp for 12 years, and I came back from this more excited and stimulated than any other class I’ve had here,” said Padmanabhan, 51.
NetApp joins Hewlett-Packard Co. and other Silicon Valley giants in relying more on simulations and role play and shifting away from lecture-led training sessions. The companies are looking to avoid costly mistakes, encourage collaboration and help turn pretend profit into actual earnings. Stockholm-based BTS Group AB, which develops the customized simulations, also counts Cisco Systems Inc., Autodesk Inc., Salesforce.com and VMware Inc. among its customers.
More Realism
The programs provide a more realistic and relevant experience for participants than a lecture or reading materials, said Mike Hochleutner, executive director of the Center for Leadership Development and Research at Stanford University’s Graduate School of Business. The risk is that students who thrive in traditional settings may miss the point in cases where lessons aren’t spelled out clearly.
“While the learning may be deeper on average, you could have some participants come out who didn’t grasp what you were after,” Hochleutner said. Stanford itself has used a similar approach in its MBA program’s core curriculum since 2007.
At Autodesk, sales teams use BTS Group’s games to see the world through the eyes of their customers. Most of the company’s clients have different business models, so it helps to understand how they operate.
“It’s practical learning,” said Ken Bado, executive vice president of sales for San Rafael, California-based Autodesk, the top seller of engineering-design software. “You’re putting emotional energy into it -- it’s not just pure intellect.”
Common Mistakes
Bado said the teams that didn’t perform well tried to do too much without committing enough resources -- say, opening an office in China with only a handful of employees. Seeing the consequences of such actions in the simulation solidifies the lessons, he said. Bado also encourages participants to bet real money on the outcome.
“I say, ‘You think you know what’s going on here, you’re confident? Put $20 in, put $100 in for the team,’” he said.
North American customers bring in the biggest chunk of revenue for BTS, generating 46 percent in the first quarter. Sales for the region increased 9 percent during the period, when adjusted for changes in foreign exchange rates.
Dan Parisi, the director of BTS’s San Francisco office, said companies that stopped spending on employee development during the recession are starting to open their wallets again.
“If you’re in a cost-reduction environment, you can cut some of this stuff,” he said. “You cut back for four or five quarters on development of talent. There’s a point where it’s going to affect a few things -- employee engagement, just general capability of the organization -- if you’re not building it.”
More Cooperation
Life Technologies Corp., a provider of gene-analysis tools for medical research, had 80 of its vice presidents take BTS classes. As a result, collaboration between employees has increased, said Elsa Guynes, the Carlsbad, California-based company’s director of global sales development.
“Even today, two years later, people that were in classrooms together across countries and geographic areas --they still maintain that relationship,” Guynes said. The company plans to use the approach with its sales force too, she said.
NetApp’s Padmanabhan says the simulations were thought- provoking and engaging. He also got free beer out of the experience, thanks to bets he made with a losing team.
“It’s much better than sitting through a 100-page PowerPoint presentation,” he said.
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