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14/12/2015 21:27, autor Mateusz Chołaściński

Imagine this: you are brave, you can take risks, play hard, and then you wake up and realise it was just one wild dream. Imagine you can be your own competitor or customer for a while, you can think like your competitor and return wiser, with your competitor’s insights. Imagine you can observe a potential employee's behaviour and decision-making style before you decide to hire them. Tempting? Absolutely. Considering the cost of real-life experiments of this kind such tests would simply be too expensive or even deadly for the business. No one is going to let that happen. In real life one is asked to take small steps in the wrong direction and pretend to be sensible, not to try hard and pay the cost of mistakes (but also expose the business to a potential breakthrough). Venture capital type decisions are okay as long as a business is operating from a garage, not necessarily from an A-class office space in the city. Businesses that hit a solid level of turnover and headcount simply imitate action and promote employees to imitate bravery.

If there's any doubt that the last statement holds true, it’s enough to compare two cross-sections of a mature business taken five years apart. The same overly conservative corporate superstars are to be in charge. The very same ones who had the strongest influence on the strategic plan at the time of the first cross-section. The exact same ones who so miserably failed to predict the future, and then completely failed to identify the right direction for the company to go in. They are still to be in position, as it's unusual to compare pictures separated by a gap of five years. For while you're slowly connecting the dots in between, the long-term dynamic visibility is strongly disturbed. The effects of a bad decision in year zero happen to be positive in year one, and in year two (when the negative effects emerge) they have already been confused with external factors, they're completely detached from their origin. A business pretending to be able to forecast 5 years into the future is not capable of finding links in the past. Or simply is not interested in doing so. Should the “influencers” be sacked for being so harmful to the business? Probably not, they were only doing what they had been asked to do. And they genuinely believed they were right. They never had the chance to observe (or better, be a part of) a company operating without the solid boundaries set by “common sense” built on past experience[1]. The same applies to employees across the entire organisational chart. If a company asks them to be innovative, the actual request is to get closer to the well-defined boundaries, but not to travel beyond. Dull reality.

Virtual reality games serve the purpose of entertaining people. They also are a good training platform for front line soldiers. Combat games mimic reality pretty well by introducing the randomness factor. Reality is random. And a good soldier would be prepared for randomness more than for anything else. It’s not an attack strategy sketched on charts that is to be applied here. Instead, a set of skills is being developed, to give an advantage in reality. Training in a virtual, risk-free environment. Without it, many soldiers are unable to pull the trigger when necessary and do not fire at the enemy. But coming back to our business realm, imagine you have an army of employees playing virtual business. They do not get used to firing a gun, but to making decisions. In virtual reality it's possible to be brave and play hard. Employees can be asked to work for the opposition, to come back later and share their experience. Future (potential) employees can be seen in situ before the permanent contract is signed. Virtual reality business simulations really can do the job. But they need to be as realistic as possible. It’s similar to developing combat and business skills. Reading a business textbook might support the acquisition of theory. Presentations or lectures might support better understanding of more complex business concepts. But it’s still more like reading a shotgun manual or watching other people shoot. Learning by doing isolated exercises, like calculating profitability, break-even points, price elasticity is okay, but it’s akin to shooting at a fixed target, good for getting the basics, but nothing more. The difference between the testing environment and reality are huge, the gap hard to tunnel through. It's necessary to shoot moving avatars in an unpredictable environment, and be ready for the unexpected.

To work well, for the purposes of training, recruitment or strategic analysis, virtual reality must mimic reality. Limiting the scope of decisions that can be made is not an option. Pricing, rebate policies, marketing investment, innovations, shelf allocation – it all adds (or even multiplies) up to whether a business fails or succeeds. The market cannot be oversimplified either. There is no such thing as a market where only manufacturers or only retailers operate. They all have to be present, as the customer-supplier relationship is often the heaviest element in implementing the desired strategy. Negotiations, agreements, individual solutions need to be there. Customers might support brand building or initiate brand destruction. Competitors are not going to go with the flow, they're going to react. Do you plan on gaining the market share? Your competitors have the same plan, and clearly, not everyone can do it.

This is why business simulation platforms have the (huge) potential to be THE right tools to simulate, test, predict, or learn the unpredictable in a business reality. [If you do not like the product placement type of advertising – stop reading now]. And - by the way - Netious Market Challenge has it all.

[1] I’m currently reading The Black Swan by Nassim Nicholas Taleb, and what I write here might be strongly influenced by this book, even if I do not realize. So I must acknowledge Mr Taleb’s contribution, without being more specific.

Image source: #19. astroMSgalseq_D_063 by Rich Murray