June 7 (Bloomberg) -- When NetApp Inc. executive
Suresh Padmanabhan signed up for a class on honing management skills, he
expected whiteboards and PowerPoint presentations. Instead he found a
conference room full of board games.
“It did look a little bit silly,” said
Padmanabhan, senior director of the critical accounts program for the
Sunnyvale, California-based company, which makes data-storage
His impression changed fast. The games weren’t
checkers or Monopoly -- they were complex role-playing exercises where
each team ran a fictional company similar to NetApp. His group won the
game by increasing operating margins to 19 percent (NetApp’s real
operating margin was 15 percent last quarter).
“I’ve been at NetApp for 12 years, and I came
back from this more excited and stimulated than any other class I’ve had
here,” said Padmanabhan, 51.
NetApp joins Hewlett-Packard Co. and other
Silicon Valley giants in relying more on simulations and role play and
shifting away from lecture-led training sessions. The companies are
looking to avoid costly mistakes, encourage collaboration and help turn
pretend profit into actual earnings. Stockholm-based BTS Group AB, which
develops the customized simulations, also counts Cisco Systems Inc.,
Autodesk Inc., Salesforce.com and VMware Inc. among its customers.
The programs provide a more realistic and
relevant experience for participants than a lecture or reading
materials, said Mike Hochleutner, executive director of the Center for
Leadership Development and Research at Stanford University’s Graduate
School of Business. The risk is that students who thrive in traditional
settings may miss the point in cases where lessons aren’t spelled out
“While the learning may be deeper on average, you
could have some participants come out who didn’t grasp what you were
after,” Hochleutner said. Stanford itself has used a similar approach in
its MBA program’s core curriculum since 2007.
At Autodesk, sales teams use BTS Group’s games to
see the world through the eyes of their customers. Most of the
company’s clients have different business models, so it helps to
understand how they operate.
“It’s practical learning,” said Ken Bado,
executive vice president of sales for San Rafael, California-based
Autodesk, the top seller of engineering-design software. “You’re putting
emotional energy into it -- it’s not just pure intellect.”
Bado said the teams that didn’t perform well
tried to do too much without committing enough resources -- say, opening
an office in China with only a handful of employees. Seeing the
consequences of such actions in the simulation solidifies the lessons,
he said. Bado also encourages participants to bet real money on the
“I say, ‘You think you know what’s going on here, you’re confident? Put $20 in, put $100 in for the team,’” he said.
North American customers bring in the biggest
chunk of revenue for BTS, generating 46 percent in the first quarter.
Sales for the region increased 9 percent during the period, when
adjusted for changes in foreign exchange rates.
Dan Parisi, the director of BTS’s San Francisco
office, said companies that stopped spending on employee development
during the recession are starting to open their wallets again.
“If you’re in a cost-reduction environment, you
can cut some of this stuff,” he said. “You cut back for four or five
quarters on development of talent. There’s a point where it’s going to
affect a few things -- employee engagement, just general capability of
the organization -- if you’re not building it.”
Life Technologies Corp., a provider of
gene-analysis tools for medical research, had 80 of its vice presidents
take BTS classes. As a result, collaboration between employees has
increased, said Elsa Guynes, the Carlsbad, California-based company’s
director of global sales development.
“Even today, two years later, people that were in
classrooms together across countries and geographic areas --they still
maintain that relationship,” Guynes said. The company plans to use the
approach with its sales force too, she said.
NetApp’s Padmanabhan says the simulations were
thought- provoking and engaging. He also got free beer out of the
experience, thanks to bets he made with a losing team.
“It’s much better than sitting through a 100-page PowerPoint presentation,” he said.
--Editors: Nick Turner, Lisa Wolfson
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