While finishing up the next book review, I thought I’d go ahead and share some lessons learned from running a business simulation last semester. This simulation was a three-credit, semester-long class that offered plenty of variety compared to the typical semester load. It offered the opportunity to launch a computer company (albeit in a world with no established competition), and served as an excellent tool for practicing teamwork. Of the three competing teams, our team (of four partners) started slowest but pulled out ahead at every level at the end. The reason for this success was because of several key lessons we learned early on.
Lesson #1: Pick your Business Partners Wisely
One of our key advantages was that our team worked well together. Our president, a friend of mine, and I sat down before teams had even been picked (even before we knew for sure we would be working together) and evaluated every person in the class to customize the ideal team. Of course, part of this was luck of the draw, as it sort of “just happened” that we picked a team that would learn to communicate well, work hard, and maximize each other’s strengths, but investing time up front to ensure that your team is able to rise to the level of your company vision is vital.
Lesson #2: Balance the “Manager” and the “Marketer”
While planning our final presentation and reflecting back on lessons learned, we realized that one of the vital things we had gotten right (again, without necessarily meaning to) was the ability to balance thinking like managers vs. thinking like marketers. The difference is that managers think short-term, about what needs to be done right now to keep the business afloat, while marketers think long-term, about what will bring the greatest benefit in the future. During our second year in business (the simulation was broken down into 12 quarters), we faced a crises. We couldn’t get our product design right (we spent four quarters fighting this battle), so couldn’t even begin to keep up with sales. We finally threw everything we had into fixing the product. But when we finally got that right, our cash was exhausted. We had hit a pit. Fortunately, our Board of Advisors (aka our professors) invested some funds in our company, but if we weren’t extremely cautious, it wouldn’t be enough to get us off the ground. The following two quarters or so were ones of extreme cash management; it was challenging, but thinking like managers saved our company.
Early on, we had set in place an overall strategy. At first, we slipped away from this strategy, but by the time we got our product development on track, we had figured out what we were doing. We planned long-term, and stuck to that plan. Sticking to the plan, despite the occasional temptation to try something different, allowed us to catch up and surpass our opponents both in product and market size. Thinking like marketers allowed our company to grow.