When Daniel C. Smith, president of Capsim Management Simulations Inc., a global virtual business simulation program provider, blames jet lag for not being able to tell this correspondent how long his company has been operational, it is a tad difficult to believe. Especially after hearing him speak on business strategies at a management simulation training programme at the International Management Institute in New Delhi.
Smith, who is an adjunct professor of management at DePaul University in Chicago, began dabbling in simulations as a management student at Northwestern University’s Kellogg School of Management in the early 1980s. In 1984, he published Stratplan, a simulation designed for MBA programmes. His work includes Capstone—a strategy and business planning simulation set in a manufacturing environment; Foundation—a simulation widely used in business schools and community colleges as an introduction to business; and The Herald-Telegram—a newspaper management simulation developed for the Media Management Center at the Medill School of Journalism, Northwestern University.
Capstone—which teaches strategy, accounting, marketing, finance, human resources, teamwork and leadership, among other topics—provides educational business simulations for universities and large corporations.
Capstone simulators are used by a number of Fortune 100 companies, including Microsoft Corp., General Electric Co., General Motors Corp. and Goldman Sachs, and at universities such as Harvard, Wharton, Northwestern and Vanderbilt.
Last year, the firm recorded $4 million (around Rs17 crore) in sales and a 14% year-on-year growth. Even though it has been a big player in the US, the simulation game provider had few franchises outside the US until about a year-and-a-half ago. Capsim entered the Indian market in 2004 through the franchise route, and has since seen its services being used by Tata Consultancy Services Ltd, Infosys Technologies Ltd, Wipro Ltd, Larsen and Toubro Ltd, Pepsi Foods Pvt. Ltd, Asian Paints Ltd and Kotak Mahindra Bank, among others.
In an interview with Mint, Smith speaks about the advantages of training through business simulators, increasing application of simulators in mapping competencies and the future of simulators in management education.
Edited excerpts:
How do business simulators help students and managers?
Photo illustration by Malay Karmakar / Mint
We know people learn the most by doing and we are wired to remember highly emotional events. Any event that involves the use of many senses has a far greater impact on us. Business simulators are a high-sensory environment designed to mimic a real-life business situation where managers face a complex and rapidly evolving scenario in which business acumen is tested and enhanced through modelling, analysis and strategic planning.