Information
about Enterprise Profitability®
- Understand the basic
principles of running a business
- Understand profit
and cash flow
- Learn how to create
and implement a business plan
- Understand how I
impact the bottom line
- What can I do to
increase profitability
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Table of Contents)
Overview
Enterprise ProfitAbility
is a board-based simulation, designed to teach the basic principles
of running a business to people at every level in an organization.
To get a feel for what
playing Enterprise ProfitAbility is like, image yourself on a team
with 2-3 other participants. You and your teammates are seated in
front of a simulation board that is a visual representation of the
business you will be running. There are 4-5 other teams in the room
each seated around their simulation boards. Your team will be competing
with all of the other teams for both customers and shareholder approval.
Money in the simulation
is represented by silver chips, products or services by colored
chips, and debt by red chips. There are spaces on the board for
the various assets and liabilities found in a real business: equipment,
inventories, cash, receivables, as well as bank loans and supplier
accounts. There is also an expense area where recruitment, wages,
rent, administration and interest are paid. Each team competes in
three different markets. Teams are encouraged to view the teams'
boards to assess their competitors' position and anticipate future
business plans. Unlike computer-based simulations, in Enterprise
ProfitAbility you can see how every decision causes good or bad
results. Nothing is hidden. Consequently,
the learning is very rapid. For example, if your team runs out of
cash, you see why by just looking at the board.
The simulation is run
in monthly business cycles. The actions taken during the cycle are
governed by steps on a checklist. In the later business cycles,
participants learn the key elements of putting together a sound
business plan. You learn to how to determine break-even, pricing
strategies, and how to forecast cash-flow.
During the course of
the simulation, You learn how to understand and use all of the basic
financial statements: Income Statement, Balance Sheet and Cash Flow.
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Course
Outline
There are many different
ways to implement Enterprise ProfitAbility. The following outline
has been found to work well and produces the maximum impact on achieving
the learning objectives..
Opening
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A
senior manager explains the importance of the course and
sets the expectations of what he/she wants the participants
to learn as a result of going through the course. If possible,
the senior manager would present unit specific financial
information. He/she could tell the participants that he/she
will review this information again at the end of the course
and discuss how the participants can contribute to specific
goals.
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Introductions
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Participants
briefly introduce themselves and state their expectations
for the simulation.
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Moving Balance
Sheet
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Facilitator
introduces the participants to the simulation by having
them build it up piece by piece and see the financial
impact of each change.
By the end
of this segment, the participants have a basic understanding
of the simulation rules and the balance sheet.
|
Run January
and February
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Each simulation
decision round represents a month of simulation time.
For the first two months, all teams make exactly the same
decisions. Six companies make up the simulation, each
company is run by a separate team, are competitors, the
emphasis at this point is not on the competitive aspect
By the end
of two months the participants understand all the rules
and understand the financial statements. At this time,
they do not as yet understand the whole picture: how their
strategic and tactical decisions affect the financial
results.
|
Run March,
April, June
|
At this point
in the simulation the participants make their own decisions.
From this point on the competition begins. (and the adrenaline
starts to flow!)
Starting in
simulation month April, the participants do a business
plan and cash flow forecast before implementing their
decisions.
Depending
on the time available, additional months can be run. At
the end of each decision round there is a debriefing and
discussion of how the learning applies to them. Also,
content pieces can be presented to complement the learning
in the simulation.
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Unit Financials
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Presentation
of a simplified financial statement for the participant's
units. Also, financial statements from competitors or
other industries can be presented and discussed.
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Action Planning
and Wrap-Up
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Through a
combination of structured individual and small group activities
participants apply the learning's to generate specific
suggestions on how to change what they (or others) are
doing back on the job. It is very helpful for the senior
manager that kicked off the simulation to be present for
the discussions and to give some feedback on the participant's
discussion. Participants would commit to implementing
one of their suggested changes.
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about Enterprise Profitability®
- Table of Contents)
1. What did you learn
from this session?
- how important it
is to know your customer/market/business
- how managing cash
flow/balance sheet is truly critical to managing the business
- key of pricing strategy
and knowing competition
- market dynamics and
importance of pricing
- being flexible and
taking some risks
- looking more at competition!
- importance of planning,
anticipating future
- how all things tie
together
- general business
practices and basics
- team dynamics and
profitability concepts
- the big picture of
business and finance
2. What will you take
back to the work place?
- ability to relate
balance sheet issues to others
- different ways to
explain expense
- how every dollar
spent impacts customer
- pricing a major issue
of importance
- importance of planning
for successful business
- knowledge relating
to achieving increased profits
- a better understanding
- understanding my
impact to company performance
3. What was the most
useful part of this session?
- emphasis on projecting
cash flow
- balance sheet management
- cycles of simulation-going
step by step
- simplicity of how
finance can be taught
- useful for personal
and job related goals
- strategy as part
of the planning
- competition amoung
groups; seeing business results
- seeing the big picture
of business; not just my role
- communication/insights
shared within group
- business concepts
- how balanced scorecard
ties to business mission
4. Who else would benefit
from this experience?
- all employees
- sales, marketing,
r&d, manufacturing
- entire organization
- all levels
- salespeople particularly
- other employees in
the division
- all personnel but
especially higher level management
- all members of organization:
customer service, production, sales, r&d, technical service,
marketing, secretarial staff
- non-financial people
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about Enterprise Profitability®
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