At Kimberly-Clark's biannual CEO Forum — a gathering of the company's 100 top executives in January 2007 — the CEO wanted to improve his executives' understanding of the importance of Total Shareholder Return. While tradition suggested a talking-heads approach to the agenda, Lesley Hoare had another idea.
Hoare, vice president of talent development, diversity and inclusion, had joined the company in 2005 and in 2006 took responsibility for the CEO Forum. “When I first came on board, it [the forum] was primarily presentation-based. We were really looking for different ways to do things.” Hoare didn't want to tell the executives about TSR, she wanted to immerse them in it.
Enlisting the services of BTS USA Inc., San Francisco, a consulting company that specialized in creating highly customized business simulations, Hoare went to work. The simulation — analogous to a board game — was structured so players essentially had to run Kimberly-Clark. They had to allocate financial and human resources, react to market conditions, forecast, and, ideally, improve market share.
BTS split Kimberly-Clark's 100 attendees into four “worlds,” with five five-member teams that competed in each world. They began the simulation before discussing TSR, but over the course of the meeting introduced the concepts and expected attendees to adapt their simulation play. “The measure [of success] was TSR; they had to work to understand it,” says Hoare, who was impressed with how engaged in the experience the attendees were.
“They were totally immersed in running a company. Immersed in a competition. It felt like Kimberly-Clark,” says Hoare. “They could really experience the levers that move TSR.” They were so engrossed, she said, that the office that Kimberly-Clark had set up to allow attendees to answer their e-mails — usually a hot destination — was practically deserted.
To get it right, BTS had interviewed Kimberly-Clark's CEO, CFO, and business heads to understand the company and its market dynamics. The customization is a “rigorous process,” says BTS senior vice president Dan Parisi, who notes that the interviews help to create buy-in for the on-site experiential learning.
Hoare also says that having a key strategy or business concept to get across in the simulation is critical; it allows you to focus your efforts and evaluate your effectiveness. Kimberley-Clark plans to bring the game to the director level over the next few years.
Hoare's use of the BTS simulation earned her the honor of finalist for the 2007 Chief Learning Officer magazine's Learning in Practice Awards in the category of innovation.
According to Parisi, BTS' customized simulations cost between $100,000 to $150,000, plus facilitators' fees.