Santa Clara, Calif. -- For three days in mid-March, software-development manager Ted Tabloski got a taste of what it would be like to run his company.
Mr. Tabloski joined 25 colleagues in a game that made them top executives of an imaginary technology company modeled after their employer, NetApp Inc. Participants competed in teams to produce the strongest sales and operating profit. They were forced to quickly grapple with challenges such as balancing long-term investments against short-term results.
"You never have perfect information; you never have enough time," Mr. Tabloski said."That was particularly real."
That realistic feeling is a big reason companies such as NetApp use simulations to help train managers in complex subjects such as strategic thinking. Experts say adults absorb information better when they use it, not just hear it.
"It's a higher-impact way of learning," said Kellie McElhaney, a professor at the University of California, Berkeley's Haas School of Business. Ms. McElhaney employs hands-on components in all of her courses, following graduate work in experiential learning.
To make the simulation as realistic as possible, NetApp, a Sunnyvale, Calif., data-management company, hired BTS Group AB of Sweden. BTS staff spent months dissecting NetApp's business, analyzing financial statements and interviewing executives. They also reviewed a paper written by NetApp co-founder David Hitz, describing the actions he thought necessary to maintain rapid growth.
NetApp, with annual revenue of about $3 billion, first ran a BTS simulation last year for its top 100 managers in lieu of a traditional marathon PowerPoint session to explain corporate strategy. NetApp President and Chief Operating Officer Tom Georgens said he was initially skeptical but changed his mind after seeing managers' enthusiasm as they traded anecdotes from work to help solve problems in the simulation. By the end of the game, most players were on their feet, he said.
This year, NetApp expanded the game to its second tier of 300 managers as a leadership-development tool.
Mr. Georgens attended Mr. Tabloski's session to explain the challenge of building sales aggressively while generating enough profits to keep investors happy. "You're going to get a sense of what these decisions are like," he told the assembled managers.
Mr. Tabloski and the others were divided into teams of five and told to run an imaginary company called Pet-a-Toaster for three years -- with each year represented by one day in the simulation. Mr. Tabloski's teammates included another engineer, a sales director and a specialist in streamlining business processes. Mr. Tabloski was appointed CEO for the first year.
Like NetApp, Pet-a-Toaster was a fast-growing $3 billion data-management company. Mr. Tabloski and his teammates had to meet an annual sales-growth target of 35% while competing against other teams for market share and profitability.
Players received a booklet describing Pet-a-Toaster, including market analyses based on actual NetApp data, and a menu of 38 possible strategic initiatives such as improving college recruiting or bolstering sales-channel capacity. Teammates gathered to choose strategies and allocate people and money, by placing blue and white poker chips on a game board. Mr. Tabloski's team decided to invest heavily in technologies and services to attract big corporate clients and potential new users.
Then they had to respond to "events" posing tough choices, such as a big customer seeking last-minute features added to a product. Mr. Tabloski's team had to decide whether to add the features, and costs, or refuse and risk angering a key client. "This is my daily life," said teammate Troy Eberlein, a product-management and marketing director.
Mr. Tabloski's team declined to add the features. Then they learned the consequences: Customer satisfaction declined, hurting sales and market share. (The results were generated by BTS's analysis of NetApp's business.)
At the end, BTS workers totaled sales and operating profits for each team, and they analyzed the effect of different investment strategies. Teams with a good balance of investments into long- and short-term strategies tended to have stronger results, which in turn gave them an edge in finances and recruiting the next year. Mr. Tabloski's team placed second, with strong shares of the market for big corporate customers and smaller businesses.
Mr. Tabloski said the game helped him better understand the trade-offs NetApp's executives make in shifting people or money from one area to another. His teammates joked that he could keep his CEO job for one more year.