Using simulation games for business planning & decision making

The benefits of using simulation games in training and education are now well understood. With simulation games, people become active participants in their learning journey and are able to make better connections between the course contents and its application in the real world. The result is more engaged learners and improved learning outcomes.

In executive education, using simulations can also serve as a way to build the skills and enthusiasm required to involve employees in business planning and organizational change. This article describes how the Sustainability Management Simulation: Net Zero can be used to develop a corporate plan for the reduction of greenhouse gas emissions. The structure explained here can be adapted to other simulations for all types of corporate decision-making.

Simulation games for professional development

In the Sustainability Management Simulation: Net Zero, learners manage a 4-star city center hotel towards a 50% reduction in greenhouse gas emissions over a period of 7 years, while at the same time optimizing business performance. By playing the simulation, participants learn that making significant reductions in corporate emissions is possible and does not need to go at the expense of financial results. If the simulation is used to help design a company’s own emissions reduction plan, the first step is to deploy the simulation for training purposes. This involves the following steps:

Brief: In this phase, the facilitator first ensures that participants have the required climate change knowledge to be able to play the game. Relevant information is available through text on screens, videos, a glossary of terms and in the briefing slides that are available to facilitators. Topics covered in the simulation include different types of greenhouse gas emissions and their emission factors, the Paris Agreement, emissions reporting (Scopes 1, 2, 3) and offsets.

Once participants have the required knowledge of climate change, the facilitator explains how the simulation works. This can be done by using the brief sides, showing the learner video or by playing one round of the simulation with the participants.

Play: During this phase, participants play the simulation with minimal support and interference from the facilitator. Since business planning is likely to be a collaborative exercise, it is recommended to let learners play in small groups (around three people per group).

Debrief: The debrief can begin in a traditional way by asking participants for their feedback about the simulation experience, followed by sharing and analyzing the game results obtained by different groups. In this way, the debrief discussion reinforces and consolidates the learning outcomes from the use of the simulation.

From professional development to business planning

The debrief phase can morph into a valuable planning exercise that results in a business plan (in this case; a corporate emissions reduction plan) that is ambitious and realistic, and has the buy-in of the team members who worked on its development. Developing such a plan involves the following steps:

1.?????? Build a shared understanding of the simulation game. This should be achieved as much as possible by the participants themselves through analysis of information, decisions and results, but the facilitator can provide support with information available in the debrief slides and other facilitator resources (such as the facilitator manual).

2.?????? Critical evaluation of the simulation model in the context of the circumstances of the organization of participants. Every simulation model is ‘wrong’ in the sense that it represents a simplification of reality that corresponds to a specific setting.? Analyzing how the simulation is different from the situation of the company (e.g. in terms of industry, location, company size) enables participants to build their own model of baseline data, actions and impacts that form the basis of any corporate emissions reduction plan.

In the Net Zero simulation, the facilitator can change key model parameters to reflect the conditions of participants (e.g. emission factors, electricity prices, efficiency of solar panels). The simulation’s facilitator Class Settings screen provides a way to set these parameters as a collaborative exercise between the facilitator and participants. This possibility also exists in many other simulations.

3.?????? Analysis of available initiatives in the simulation. The different emission reduction initiatives that are available can be analyzed in the context of their relevance to the organization. For each initiative, participants can discuss how effective it would be in their context.?

4.?????? Identification of new initiatives. The simulation game does not include all conceivable emission reduction initiatives that exist. Playing the game will stimulate participants to generate new ideas about initiatives that are relevant to their context.

5.?????? Estimate impact and costs for each initiative. The simulation game provides a template for the analysis of initiatives. For each initiative that is considered for the company’s own plan, participants can quantify:

·?????? The expected reduction in emissions (e.g. as a result of energy savings).

·?????? Any embodied carbon as a result of purchases.

·?????? Cost impacts (both investments and cost savings).

·?????? Impact on other elements of business performance, including staff engagement, customer satisfaction, revenues, company reputation.

This analysis can be done both for technical solutions (e.g. an air-conditioning upgrade) and for initiatives that result in behavior change (e.g. staff training), even though the impact of technical solutions will probably be easier to quantify. The facilitator can provide a simple template for participants (modelled on the structure used in the Net Zero simulation) so that proposed initiatives are presented in a consistent manner.

6.?????? Consolidation of initiatives into business plan. After evaluation of different initiatives, the selected ones can be incorporated into a plan, which can then be evaluated, refined, accepted and implemented.

This structure allows for the generation of different, alternative business plans that are developed by small groups or individuals, which can then be compared and combined. Alternatively, just one plan can be developed by the entire team as a group exercise.

General applicability

The example discussed here is specific to a corporate emissions reduction simulation game and plan, but it can easily be adapted and used in different contexts. Different simulations cover different topics and can be linked to different types of corporate decisions and plans. By using simulations in this way, corporate training becomes a vehicle for skills development, improved corporate planning and decision-making, and the achievement of real organizational change.

Contact us at Sim Institute if you are interested in using simulations to formulate your organization's emissions reduction strategy.