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Reprint From Training Magazine
Simulations: The Next Generation of E-learning
By Sarah Boehle
Robust, interactive online simulations. They often put learners in a virtual
business environment,
encourage them to collaborate, and force them to make
decisions. Participants, immersed in an experience that draws on their
individual expertise as well as teamwork skills,
learn by doing.
And that's why proponents of the technology—not to mention academic research and
anecdotal evidence—suggest that interactive computerized
simulations are one of
the most effective ways to learn tasks
ranging from running a cash register to
running a company.
The experts generally agree that simulations
boost learning retention rates
dramatically. An often-cited study conducted by the NTL Institute for Applied
Behavioral Sciences in Alexandria, Va., found that on average, students retain 5
percent of what they hear in lectures, 10 percent of what they read, and 20
percent of what they see and hear in audiovisual presentations. But add
"practice by doing" and "teach others/immediate use" to the mix—two learning
techniques that computerized simulations possess in spades—and
retention rates
shoot up to a jaw-dropping 75 and 80 percent, respectively.
Some also credit simulations with
accelerating the learning curve. According to
James Lundy, vice president of Gartner, the Stamford, Conn. research firm,
students learning via simulation-based training become proficient more quickly.
When students learn on the job, it usually takes them longer to be able to
perform the same task with the same proficiency, he says.
Proponents also point out that simulations allow students to practice newly
acquired skills and apply new knowledge in a realistic, yet risk-free,
environment. That means, for example,
students feel they can experiment and
explore the cause-and-effect relationships
between operating decisions and
business outcomes without facing real-world consequences—like plummeting a
company into bankruptcy or worse.
That kind of experience simply can't be matched by traditional e-learning or a
lecture-based course, says Chris Musselwhite, president of Discovery Learning, a
company based in Greensboro, N.C. Other types of learning don't get at the real
issues of how people work together and influence each other, he contends.
"Simulations are a way to get people out of their academic understanding of a
subject, to see who they really are and what happens to them under stress when
they are challenged or exposed to change or ambiguity."
Good, Fast—and Not Out of Reach?
If you're now convinced that simulations are good and fast, you may suspect what
comes next. While the military and the aviation industry have used interactive
simulations for decades, large-scale multi-layered simulations have remained out
of the reach of all but a few corporate budgets until recently.
That's beginning to change, thanks in part to the proliferation of technology
and the fact that many simulation vendors are churning out better
semi-customized and plug-and-play simulations that allow for less expensive
customization of content than ever before.
In fact, according to Gartner, computerized simulations, which are the biggest
subset of experiential online learning, will soon emerge as a critical component
of most courseware. Lundy predicts that 70 percent of all off-the-shelf and
custom e-learning content will include simulations of some type.
Time will tell whether such predictions prove accurate, but the growth of the
simulation business is real enough. Revenues at Austin, Texas-based simulation
vendor Enspire Learning have increased more than 80 percent this year over
last—growth that CEO Bjorn Billhardt attributes almost exclusively to clients
buying solutions with an experiential learning component. Likewise, simulation
provider BTS USA in Stamford, Conn., has been growing at a steady clip of 20
percent per year—despite the bursting of the tech bubble earlier in the decade.
"This year our growth rate in the United States will be in excess of that," says
BTS senior vice president Rommin Adl.
Gartner's Lundy isn't surprised by these figures. "annual spending for training
worldwide is over $100 billion right now, and e-learning content accounts for
only a couple of percentage points of that," he says. When it comes to potential
growth in the e-learning content market, "we haven't even gotten near the
iceberg, let alone the tip. Much of that growth will be driven by simulations."
Simulations At Work
That growth, in turn, reflects the results that simulations can produce.
Gartner's Lundy points to a major bank that puts more than two dozen of its
high-potential internal candidates through a multifaceted simulator that asks
them to run a company
for a specified period of time. During the exercise,
candidates try out a variety of jobs and are then assessed on how well they
perform in each role. "The goal is to
determine what skills and abilities they
may have that aren't on their résumé, but that they might be good at anyway,"
says Lundy. The bank then uses the results to identify potential CFOs for its
various branches instead of going outside the company to hire. As a result,
Lundy describes the bank's savings in hiring costs alone as "astronomical."
At Humana, Inc., a health-insurance company headquartered in Louisville, Ky.,
simulations have proven to be just the right medicine for helping the company's
executives to better navigate complex change initiatives. The company sent 150
of its top executives through an exercise in which teams of trainees ran a
virtual version of their company in a two-day business simulator workshop.
Only four months after the workshop, CLO Ray Vigil says participants
attributed
savings that amount to an ROI of 14 to 1 directly to the program—not
to mention the immeasurable benefits accrued through enhanced teamwork and
cross-departmental collaboration. By year's end, when participants' final
simulation projects are due, he predicts that savings attributable to the
simulator will far exceed that ratio.
For Humana, the decision to use a customized simulation resulted from a shift in
organization strategy. "We had to rethink the competencies and skills we had
among our senior executives," says Vigil. "As we looked at moving from being a
product-focused company to a more consumer-centric enterprise, we realized that
it would require a pretty dramatic learning curve and a whole new set of
competencies from our leadership team."
In response, Vigil hired BTS USA, which worked closely with Humana's top
executives to create an interactive, multi-player spreadsheet of the company.
Twenty-five participants at a time in cross-functional teams of five went
through a two-day simulation called the Business Simulator Workshop that modeled
Humana's business at all levels. During the simulation, students were confronted
with investment and trade-off decisions similar to those that Humana's senior
executives, particularly the CEO, face throughout the year. Through it all,
students
raced against the clock—and their classmates—to win by growing revenues
by introducing new products and initiatives that reflected Humana's new consumer
focus over a three-year operating cycle.
Of course, just as in the real world, limitations were imposed on participants.
Students had to allocate a limited budget among 56 different priorities, which
ranged from budgeting and designing employee benefits packages to setting target
service levels and beyond. "Wobblers," or
unexpected events
such as a corporate
service center burning down, were frequently introduced into the simulation to
mimic the uncertainty of everyday business.
"We were trying to get at the big questions, like how much you want to grow the
business, and how you manage costs," says Vigil. While the underlying goal of
the simulation was to develop the business acumen of Humana's high-ranking
managers and executives and equip them to
function in a rapidly changing
marketplace, other benefits accumulated as well.
Because each team consisted of individuals from different departments, for
example, they returned to their jobs with a better understanding of the many
factors and influences that have an impact on business decisions, as well as the
complex processes that exist in Humana's business. "We wanted people to
understand all of the interrelationships and trade-offs that need to be made,
and some of the challenges associated with making decisions in a growing
business," says Vigil. "The best way to do that was to create what I like to
think of as a flight simulator on steroids for our executives that gave them
hands-on control of the business at all levels."
According to Vigil, the simulation also encouraged participants from across the
organization to focus more on long-term strategic decision-making and less on
short-term profits. For Leslie Andrews, vice president of sales for the
company's Colorado market, that lesson hit home early on. "It was an eye-opening
experience," she says. "Right off the bat, people had an increased overall
awareness and appreciation for the fact that
every decision we make doesn't
affect just us; it affects every segment of the organization." That knowledge,
she says, has not only affected the decisions she makes, but also her working
relationships with other departments. "Do I work better? I think I now work
smarter with other functions in the company and have a much clearer
understanding of how my decisions affect others, as well as
how to form more
effective relationships with other departments."
Based on her experience, it also appears that the simulation showed participants
the
value of long-term strategic decision-making. The competitive environment of
the simulation at first led many teams to focus on the short term, using any
means necessary to balloon profits and to pull off a big win, Andrews says. But
it didn't take long for simulation participants to realize that short-term
decision-making often led to disastrous results; steady, long-term growth
strategies often proved to be the most effective.
Today, Andrews uses that knowledge in her interactions with the company's
pricing department. "From a financial perspective, I have probably formed a much
stronger alliance with the folks who do pricing, and now I do a much better of
job of understanding their needs and getting them to understand mine. I
recognize that they are dealing with certain restrictions in order to give me
the pricing that I need to be competitive, and that we have to meet in the
middle."
That work, Andrews says, has essentially turned Humana's Colorado market around
financially, allowing it to operate on a profitable basis. "We haven't grown
from a membership perspective yet, but we now are employing a long-term pricing
strategy to facilitate profitable membership growth as opposed to growing very
fast. We might not have devised that strategy before going through the
simulation."
Trying This at Home
Intrigued with the possibilities a computerized simulation may offer your
organization? Before you give it a try, heed the experts' advice.
1. Select the right simulation for the right need. When
should you use simulations? Clark Aldrich, lead designer of Simulearn Inc. in
Norwalk, Conn., and author of Simulations and the Future of Learning (Pfieffer,
2004) and the forthcoming Learning by Doing (Pfieffer, 2005), doesn't mince
words when asked that question:
"If the learning actually matters, use
simulations.
If it doesn't, don't worry about it," he says.
Some simulations are better equipped to handle certain types of learning than
others. "If what needs to be conveyed to learners is a set of step-by-step
instructions on how to fill out paperwork, you don't need a full-blown
experiential learning simulation," says Enspire's Billhardt.
But if learning goals entail teaching participants to
deal with conceptual
content like ethics, business acumen, teamwork and leadership, or major change
initiatives
like a significant shift in an organization's strategic direction,
then it's time to consider large-scale systems simulations. "If you want to
change employees' mind-set and behavioral patterns, you have to let them
experience,
in a visceral sense, the outcomes of their actions," says Billhardt.
Enspire's The Executive Challenge and BTS USA's Business Simulator Workshop, for
example, both allow students to manage a high-level virtual model of an
organization and refine their understanding of the strategic, tactical and
financial implications of business decisions.
If a full-scale, multi-player simulation doesn't fit your organization's needs,
however, you may still want to consider the simulation option. "It doesn't have
to be all or nothing," Gartner's Lundy says. Large-scale simulations may be the
wave of the future, but less expensive, smaller-scale versions are already being
embedded into other types of e-learning, such as call-center and technical
training. These simulations—sometimes referred to as branching stories, virtual
products or virtual labs—typically teach key skills, then enable learners to
apply those skills in a simulated business environment.
In the fast-food industry, for instance, cash register simulators are used to
teach new hires not only how to run a cash register, but also how to do so while
they interact with different types of customers. Similarly, Circuit City, a
consumer electronics retailer headquartered in Richmond, Va., recently replaced
its training workbooks and videotapes with e-learning courseware in which every
product introduction contains a simulation exercise that helps put students'
learning into context. They deal with different types of customers describing
what they want in products ranging from coffee pots to camcorders.
2. Rethink your evaluation method. Simulations
are not just a different version of a linear, straightforward program, says
Aldrich. "People who are new to simulations tend to judge them against the old
standard, which is
like evaluating a car against the horse and buggy," he says.
His recommendation? Develop a formalized process for evaluating simulations.
"For instance, you might take three to five people who are part of your target
audience and ask them to take a simulation without telling them that they will
be asked to evaluate it. Instead, make them take the course and tell them that
the results will go on their record."
If students care about the results and act accordingly during the simulation, he
says, their actions will give you a much clearer understanding of a simulation's
value to your organization.
3. Decide what your
goals are up front, and be specific. Do your homework before you start looking
for the right simulation. What are the real problems you want to solve, and what
are the real goals?
Discovery Learning's Musselwhite says clients all too often, identify a training
problem and then suddenly decide that they want to use a simulation to solve it.
To achieve substantive results, he says, specific objectives need to be set
early on. "What I always ask people is, 'Let's assume we do this and it's very
successful. When people walk out of the door, what are they doing or saying
differently? What will their behavior look like?'"
Another element to consider, he says, is the relevance of a given simulation to
your target learners. A simulator that's more strategic in nature, for instance,
is more likely to work well with senior executives who understand the nuances of
upper-level decision-making. The same simulation would probably fall flat with
lower-level workers who lack a strategic perspective.
4. Look for the right mix of collaboration and feedback. Make
sure the simulation you select provides an
adequate feedback strategy, says Enspire's Billhardt. "With a linear e-learning application, you don't
necessarily need feedback; all you need is a multiple-choice test at the end,"
he says. But with sophisticated large-scale simulations where the stakes are
high, participant interaction and collaboration are focal points. The
participants must have a
time and a place to interact, exchange ideas and
synthesize their experiences. "You can't simply put a full-scale experiential
learning experience up on a learning management system platform by itself and
expect it to be effective," says Billhardt.
That's why many large-scale simulations take place in a blended environment, he
notes. "A simple branching story simulation that involves no collaboration or
interaction with other people is easier to do alone in front of a computer
because you are walking through the story on your own as its protagonist.
Spreadsheet simulations, however, are better suited to blended delivery where
you have both the computer in front of you and also an
environment that is
conducive to discussing your choices and making decisions as a team
while
competing against other people."
5. Simulate the real world, but not too closely. The
more specific the behaviors you are trying to teach—think customer service and
technical training—the more like reality your simulation should be, says
Discovery Learning's Musselwhite. On the other hand, the more abstract the
learning concepts—like teamwork or change management—the more abstract your
simulation should be.
This may seem counterintuitive, he acknowledges. "But if you make a simulation
too realistic or too like the real industry that students are in, they have a
tendency to get bogged down in the details instead of focusing on the bigger
issues that the simulation is trying to teach," he says. If you want to teach
highly conceptual content, Musselwhite recommends
using a simulation that is a
metaphor for what you do, but not identical to it.
6. Involve senior management. When
Humana's Vigil decided to create a simulation to prepare upper-level workers for
a major shift in the organization's strategy, he made certain that his fellow
senior executives were involved in every step of the process. "One of the key
things we did was to spend time connecting with senior leaders and have them be
part of the design," says Vigil. That strategy included launching a design
committee with various representatives from across the enterprise, who helped to
identify (and subsequently simulate) the driving forces and parameters of
Humana's business.
Humana executives also volunteered to serve as guinea pigs for the first
simulation session. "Our executive committee decided that they would go through
it first and, if they liked it, others would do it, too," Vigil says. "We were
kind of holding our breath at first, but the good news is that they loved it
immediately. They dove in and were competing like crazy and had a lot of fun—but
they also immediately saw the benefits of the experience." They were so
enthusiastic, in fact, that many of them subsequently volunteered to serve as
teachers and facilitators in future simulation sessions—participation which
Vigil believes has been crucial to the simulation's success.
Involving senior management up front also is imperative to gaining their buy-in,
especially given some assumptions about simulations. Some executives, for
example, may be put off by what they consider a high price tag. Still others may
have a tendency to view simulations as just a game, rather than as a form of
learning that is suitable for a serious business environment.
If you face such resistance, Musselwhite suggests the best tactic is to give
would-be naysayers a better understanding of simulation and what it is capable
of accomplishing. "One of biggest challenges is trying to articulate what
happens in a really good experience," he says. "So we always try to emphasize
the fact that we have seen
teams accomplish things in one to three days in a
simulation that would take them six months to work through and learn
if they
were left to the trial and error of their day-to-day activities."
Then there's the all-important marketing component. For example, Aldrich
recommends showing simulation newcomers video clips of people who have just
spent two to three hours in a simulated experience. "Three days ago," says
Aldrich, "I was running a simulation at United Technologies Corp. and there were
lots of parts of the simulation that were really intense. At the end of it, the
students were exhausted, but if I had put a camera on one of them and pressed
record and asked her to tell me what she just did, the person explaining it to
me would do so with this incredible amount of nuance and would sound like some
super-expert who had spent 10 to 20 years working on this stuff. And that's
after only two to three hours of actual exposure to the content."
In the end, Aldrich says, capturing the impressions of those who have
experienced a simulation, and allowing others to see and hear the excitement in
their eyes and voices, may be the most effective way to demonstrate the
"incredibly sophisticated mastery" of material that can be achieved with the aid
of a worthy simulation.
January 01, 2005 Training Magazine