It’s the last round. Do you play as if there’s no tomorrow?
Should you cut right back on investment to maximise short term profits, or should you assume that the business will continue and invest accordingly?
I compromised and made investments that would pay off this year (marketing, sales, quick and dirty rebuilds) but not ones which would pay off next year (automation). Even so, I rebuilt the products simply to bring their age down and make them more saleable.
Like David who commented on my Round 7 Annual Report, I was expecting the goal-posts to be moved half way through the game with a plunge in the stock market or a change in legislation or some other “external” factor which pushed us off course. In some ways I’m disappointed that this didn’t happen, in others it’s been fascinating to be able to play in such an stable environment no matter how artificial that is. But with hindsight, I could have been bolder and splashier in my early rounds, safe in the knowledge that nothing fundamental was going to change in this little world.
I am ending the game feeling mildly frustrated. I have no idea whether my performance is mediocre because I chose a mediocre strategy, or whether it’s because I implemented a good strategy too cautiously. I went for “a differentiation strategy, with a product life-cycle focus” assuming that I could save on R&D costs by letting my products age gracefully from one sector to another. However customers don’t like old products so you have to dicker with them just to keep them in the right age range. I suspect that all the strategies involve similar trade-offs but it would be nice to know.
Somewhere in the copious training material is the comment that many players make the mistake of seeing debt as a Bad Thing and lose out on the chance of making profits because they under-borrow and under-invest. On top of which the Balanced Scorecard loves it when you borrow. So I did borrow a bit, even though the sheet describing my strategy advised me to raise funds by selling shares. I know that one of the top 20 players borrowed copiously in the early rounds to fund massive investment. It worked for them so maybe my mistake was to be overly cautious. My frustration is that I don’t know.
Around Week 6 I got much more organised with my forecasting, but I never completely nailed it. I’d dearly like to know if anyone did get their sales forecasts right for all their products in every round. And if so – how?
The lonliness of the online gamer
This really is a repetition of the comments about the fact that we are playing very blind – with no forum to compare notes in, with weekly commentary from a journalist rather than a tutor, and opacity around the scoring. I will say once, here, that it’s really extremely poor that we have to submit our final round entries before the Round 7 league table is published. If it ever will be. If I was one of the top 10, I’d be livid. I’ve also seen nothing which explains the logistics of the last week. Will the league tables be published? If so, when? When will the winner be announced? Et cetera and so on. I’ll stop now, before I get any more whiny and shrill.
On the other hand, blogging about the game has made all the difference to my experience of it. There’ve been some interesting responses to these posts, and some thought-provoking debates.
What have I gained?
So, 8 weeks in, and what have I got out of it? In my first Annual Report, I said:
I want to do this for a variety of reasons … the first of these is bloody mindedness: it was making me nervous, therefore I have to do it.
Another reason is that I am enjoying using the simulator.. .
I’ll learn things I don’t yet know I don’t know …
It is … good practice for me to work with a P&L and a Balance Sheet rather than staring at them and saying “oh look – that’s a Profit and Loss Account and that’s a Balance Sheet”.
So all in all, my motives are not competitive. I am using this as a chance to study and learn … I’m just incredibly thankful I’m not having to discuss every single decision I take. It’s hard enough as it is.
I already knew that most things I find intimidating can be made familiar by practice, but it’s nice to have it confirmed.
As the game’s progressed I’ve come to appreciate the sophistication and complexity of the modelling behind it. One of the commentators in an early Times report said that in real life you don’t have such sophisticated modelling tools. Big businesses have modelling tools far more complex than this one of course, but in an entrepreneurial situation you don’t have these sorts of tools, and 8 rounds of Fantasy CEO would serve to tell anyone thinking of starting their own business that they really do need to understand how the numbers interplay with each other.
Yes, I have learned some stuff, but not as much as I’d hoped. If you don’t know what you are looking at, then no amount of looking at it will make you any the wiser. I could have got one of my books on accounting and really dived into the reports each week, and I chose not to. I think I just have to live with the fact that my instinct around beans is to sprout them or bake them but not to count them.
I was wrong to assume that the game would be less enjoyable played as part of a team. Now I think it would have been much more enjoyable played that way. I am really glad that I blogged about it. In fact I doubt I’d have had the stamina to play the game just for the sake of the scores each week. The comments here have hugely increased my enjoyment of the game, reducing my sense of competition in this thing and increasing my sense of community.
Other things I’ve learned:
At the end of Round 6 I noted down a couple of other things which I knew already but which the game confirmed:
Working the numbers out by hand may destroy your soul, but using spreadsheets for everything blunts your instincts
I semi-automated a lot of my analysis during Round 6. I lurve conditional formatting in spreadsheets. I love it when a cell changes itself from Red to Amber or Green when you change a number somewhere else entirely.
On the other hand, this reminded me of something I knew already: that when you are analysing something there’s an optimal level of automation which varies from person to person and dataset to dataset. Spreadsheets take the drudgery away, but automate too much and you miss out on the understanding you can only reach by getting down and dirty with the data.
I have a tendency to blank information I don’t understand.
This is most clearly shown in the way that I blanked the obvious sections in the reports referring to the recap scores, but I’m aware that I skipped blythely over the financial reporting pages of the FastTrack reports each week. On one level this means that I have the ability to focus on my own stuff and trust others to get on with their druthers which makes me a good corporate minion. I like minionhood, so that’s ok. On the other hand, to do my job well I really do need the self-awareness to notice when I’m ignoring something, the self-control to look at it long enough to find out if it’s ok to ignore it, and the self-discipline to get stuck in to learning about something I really don’t understand and don’t want to.
Round 8 Annual Report
Well, if I were only playing against the robots, I’d be feeling pretty chipper by now. My decisions have come good compared with those of my automated competitors, my share price has risen up and overtaken them all, I’ve got better market share, more profitability and so on. But once again I underestimated what I could sell, and ended up with empty shelves and disappointed customers which brought down my profits and earned me penalty points on my Balanced Scorecard.
If I could ask the top players one question, it would be how the hell do you get accurate sales forecasts?
My placing in Round 7 was decidedly average, and my placing in the game overall is brought down by noticeably poor performance in Round 3. That was the first round that I played using the Balanced Scorecard as a tool, and I like to think that I did poorly that round because of unfocused decisions the rounds before. Of course I did.
I’ll probably publish a “How was it for you” piece when the Times publish the final league tables. I do want to find out how everyone has done.
Thanks everyone for reading and commenting on this. It’s time to breathe a sigh of relief, crack open a bottle of wine and reclaim your Sunday evenings!