Fantasy CEO – The Last Round Up

The final Fantasy CEO scores are published, and congratulations are due to Jeremy Fraser and commiserations to those who were slugging it out on the first page.

There were some high ranking folks who were missing in the last round or two, which probably helped the rest of us slither up the rankings. I’m curious about where the drop-outs were positioned in the league table at the time that they dropped out, but simply cannot bring myself to cut and paste the data from 70-odd web pages into Excel.

I’m better with numbers when they are presented visually, so forgive me the indulgence of the charts.

As you can see, my place in the ranks bounced up and down in the first few weeks but it improved gently through the second half of the game. However I can’t help wondering how much that is because others dropped out. Since I set out to learn stuff, the real question is whether or not I got better at playing the game, and my balanced scorecard results suggest that eventually I did. A bit. Maybe.

But what went wrong for me in Week 3? At first sight I thought that maybe other people got better at the game in Week 3, and I got worse. Looking at my Annual Report, Round 3 was the first round I played to the scorecard, so it’s ironic that my scorecard results were worse in Round 3. That was when I decided that I had to undo some of the decisions of previous rounds, though, which might explain it. Mistakes whiplash through the subsequent rounds and I suspect you cannot afford to make any mistakes at all if you are going to do well in a league-based game like this.  That said, even the winner got a visit from Big Al.

I would like to play the game next year, if they run it, and if I have the time. I’d like to see if I have actually learned owt.

Fantasy CEO – Round 8 Annual Report

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!

Fantasy CEO – Round 7 Annual Report

Fantasy going-to-work

I was chatting with someone who would be an ideal candidate to team up for Fantasy CEO next year, if the Times run it next year. He turned me down saying “fantasy football I can understand, but fantasy going to work?” Which is a fair point well made.

If you consider Fantasy CEO as a free training course, then the poor administration and lack of communication about the scoring would be just about ok. (I think there may be players who have no idea that you get your results on each round from three separate places, two published on Monday and the third on Thursday). The low numbers tell you that although it’s free it’s also exclusive.

Making a good thing even better

However, if you swing it through 90 degrees and consider it as a computer game, then there’s a lot that the Times could do better if they consider it worth doing again.

In no particular order:

1. Provide a forum or community space for players to ask questions of each other and discuss the game
   
2. Provide links in the same place on the page of every editorial piece – one to the league table and another to the data about personal results
   
3. Provide information before the close of Round 1 about the format of the scores and how to find them
4. Publish the league table in a simple, consistent and clearly explained format
5. Publish the league table on the same day as the personal scores
6. Simplify the players’ journey through the instructions – similar information was published in three different formats (a pdf file, a mini website and little movies demonstrating how to use the spreadsheet) – however each format included information not available in the others
7. Set expectations more clearly – particularly expectations about the time required to learn the game
8. Offer an optional Round 0 – to give people the chance to practice with the tool and to understand the scoring

In other words, take the players’ experience seriously, they aren’t passive readers or click-and-run commentators, they – we – will spend a minimum of 10 hours and more like 20 or more on the game by the time we’ve finished. Those hours can be impoverished by isolation and a lack of transparency, or they can be enriched by openness and the chance to compare notes.

An Online Community

I realised the other day that I’m not going to do Fantasy CEO again next year unless I can either find a partner to do it with or unless there’s a forum to discuss it in. After a while it becomes just too sterile an exercise, played in a vacuum.

The challenge of course, and I feel stupid not to have thought of it, is that The Times is too rich and gooey a target for opportunistic law suits for them to take the risk of running an open and unmoderated forum, and moderation is expensive. On t’other hand, the forum could be closed to anyone who was not a participant in the game, and of course the Times could accept comments at any time, but only publish them – say – twice a day. It can do anything it likes, really.

The big benefits of a dedicated forum – even one limited to players of the game – is that we could learn from each other. I’ve no idea if I am tumbling down the rankings because I’ve chosen a strategy which means that I will inevitably tumble down the rankings about now, or if there’s nothing wrong with the strategy and the problem is how I’m implementing it. I bet that some of my fellow players could tell me though. Likewise those who understand how balanced scorecards work, or the relationship between market cap and share value, or whatever, could share that knowledge with those of us who don’t. And no harm with diverting off onto conversations about the inherent conflict of interest between shareholders and corporate executives. The side issues discussed here have been one of the benefits to me of running this series of posts.

So I think that the Times could manage the risk of litigation fairly easily, and that it would be worth doing if only to find out if running a forum reduces the attrition rate.

Full marks to the organisers for some things though

First of all the simulation itself is excellent – the tool is good – the world it defines is elegant, comprehensible but nuanced. The tool appears robust. There is an abundance of help online, and the help desk are fabulous. If there’s a market for these things, then the Times done well when choosing which one to use.

Secondly, full marks to the Times for attitude.

It has been interesting and informative to have a different, themed story each week. As one of the commentators here has said, if the journalist was also a player then the stories would have been richer, but full marks for having them and including so many interviews.

The Times also wants to be transparent with the scores, and full marks for that. The mechanics were under-rehearsed, but the intention was there.

The reason I’ve been so hard on the Times is because it’s been such a good game. I’d love to see it run again next year, and the niggles listed above are easily sorted and would make a real difference – particularly a forum.

Aphra Inc’s results

My results for Round 6 were pretty disappointing, but I did much better in Round 7. The aggregate scores are only in for Round 6 so far, and I’ve fallen from being among the top 20% to within the top 25% and now to within the top 30%. This is not simply a result of the attrition rate: the absolute values of my scores mean I’ve slid from the second page to the third. As I’ve mentioned, I’m not entirely sure if this is because I am badly implementing a good strategy, or if it’s because I’ve got a bad strategy in the first place. I’ll admit that tumbling down the rankings has disenchanted me slightly with the game altogether. I remain determined to see this through to the end, but I am glad that the end is in sight.

Fantasy CEO – Round 6 Annual Report

In which the Times answers some questions…

I got a reply this week from the Times, explaining what appeared to be some anomalies in the scoring. It seems that there is a “recap” score which changes round by round as well as the scores we get for the balanced score card each round. If I understand it aright, the balanced score card assesses your decisions horizontally across a single year, and the recap assesses them based on outcomes vertically across a number of years. The recap score would account for the discrepancies in the published totals. The wheels of the Times may grind slow, but they are finally grinding smooth enough for me.

.. and I don’t!

No comments on how I’ve done in Round 6 – I am in another part of the forest on Monday evening and so this is a post that I prepared earlier. Normal service will be resumed in Round 7.

Instead I’ve asked others what they think:

As I mentioned last week, I thought it high time there were other voices here, and some players were kind enough to reply to questions I asked about the game.

Most of my respondents work in business one way or another, one mainly in small businesses, one clearly in very large ones. Interestingly, one respondent has no direct experience of business at all, being an Economist with a background in Academic Research.

All of them are playing alone, though one said: ... I have tried to involve a couple of colleagues who have a degree or one who is currently doing their CIMA exams but none have really shown interest in terms of delivering help, but what the heck, being a CEO is generally a lonely place in real life so that isn’t too bad an experience, is it?

Here are my questions and some of their answers:

Why did you sign up to play Fantasy CEO? What do you hope to get out of the game?

A couple of those replying wanted to get an insight into parts of a business which they wouldn’t otherwise see, in particular into finance and into the complexities of how large companies work. But that was not the only reason:

I was curious to see how this game would try to replicate reality…

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I have always fancied that I would make a good CEO and wanted to prove to myself that I could do this …. On a more serious note, I hoped to do very well at the game and use that to help boost my credibility as an independent provider of ‘C’ level consulting services …

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I … just fancied having a go; I have a business degree [and] … I just wanted to see if I could still ‘hack-it’. … I just enjoy the participation, the intellectual exercise.

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I love challenges and am keen to test yself all the time, well not the prize money (given progress so far) 🙂 But an insight into this type of training and how useful it is.

Is it what you expected? What are you getting out of it?

… I am now reaching the stage where I will have to push my learning to the next level by actively researching the balanced scorecard areas I am weak on.

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On the one hand, it exceeds my expectations. I love the competitive side of it and am surprised by how much I have been looking forward to 5pm on a Monday when the round results are published. … On the other hand, now in Round 5, I am finding the competition a little artificial.

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Yes in that it enables us to manage the model, albeit in a relatively simplistic manner. … For me it challenges my analytic abilities; there are nuances in each of the areas.

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Overall it is what I expected but I would like to put more time into it to get more out of it. So far getting what I hoped out of it as well as some frustration.

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A couple of the correspondents are as interested – or more interested – in the game as a simulation as they are in what it is simulating – the equivalent of wanting to understand how flight simulators work by poking around the video screens and checking how the platform tilts and rocks:

… obviously the game creators keep lots of variables hidden from us (I suppose with the idea of a proper replication of the market place). In this order of ideas, these variables in the end will influence the outcome: this is what I call luck. … … my mind is not so much on the market as it is on the psychology of the game creators … the issue here is that rules are rules and therefore independent of the uncertainties that really occur out there in the real world. Therefore there could be some predictability somehow. … I guess you can spend endless hours trying to work out predictive ratios and all the other paraphernalia but in my view it’s still down to the creators market psychology how things occur…

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I remain unclear (yes we have all speculated, but it would be good to get something definitive from Timesonline or the game suppliers) of how the computer-generated competitors are programmed in order to keep the playing field even. eg. are all the decisions pre-determined, or do they respond to what I (as Andrews) decide to do? At this stage of the game, I am finding that I am so far ahead of the other players that they must have all been pre-programmed, which makes the game a little disappointing as it progresses.

How much time do you spend on it each week?

This is where I felt very stupid; I spend a good 4-6 hours on the damn thing each week, which may explain some of my frustrations. In comparison, after the first round, my respondents have been much swifter, spending 1 or 2 hours each week.

How do you make your decisions? Has your method changed as the rounds have progressed?

I usually take a look at the results right after they’re online at around 6pm every Monday. Within half an hour I’ve made a first assessment of the situation and of how to improve it in accordance with my strategy. However I let it rest for the week whilst pondering about my first impressions usually while in the shower. Then, on Sunday evening or Monday morning I implement my decisions and upload them.

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Deciding on a strategy was surprisingly easy and surprisingly isn’t one suggested by the game tutorials. Initially my decisions were based on the tutorials, the last two rounds I have based my decisions heavily on the balanced scorecard predicted in the software.

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I had a strategy and was sticking to it, then became obsessed with the scorecard in one round, disaster, I have gone back to my original strategy again, hopefully I can make up for lost ground.

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Decision making has changed as time as gone on. Beginning is very much looking at strategy now moving into more execution and tactical approach for end of game.

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… I was determined to try and hold the selling price and contributions high because I once did a sim where there were teams competing directly against each other and the tendency was for each team to discount the price – this meant that the winning team actually made less of a loss, not very satisfactory at all. I have now become very aware of the Balanced Scoresheet and that has altered my approach. … I have now got the numbers out into an excel sheet and analysing the market trend to the nth degree.

The interesting thing as well is at what point do we abandon any attempt at laying down a solid foundation for future rounds: i.e. will it matter that we just go gung-ho in rounds 7 and 8?

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One correspondent gave a very full step-by-step answer. First they analyse the competition from the Fast Track reports, then they predict how many units of each product they are likely to sell. They loop round the production and marketing decisions until they are satisfied, and then look at R&D and capacity decisions for future rounds. For this correspondent, finance “is just a matter of working out HOW to finance what I have already decided to do”, though they admitted “In the early rounds, my cash flow was always hugely negative [but] I never changed my mind about doing something for fear of debt or whatever.”

Have the scores you are getting changed significantly over the course of the game so far?

My scores have improved, especially as my finance decisions have got better.

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My scores steadily improved over the first few rounds. I am now finding it harder to improve them.

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Sadly not.

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Not really, dreadfully average, except of course for the scorecard round fiasco 😐

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42, 44, 46, 60 so probably not. Just solid around the same area. Like real life bad decisions come back to haunt.

Are you enjoying it?

Greatly.

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Yes I am enjoying it, especially now the times have sorted out their league table.

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Absolutely loving it.

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Absolutely.

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Yes most definitely.

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Yes although frustrated as I would like to commit more time to evaluate my results before next round of decisions.

Are there any other comments would you like to make about the game?

Comments clustered around the lack of a forum for players to compare notes, problems with the scoring and perceived failings in the reporting.

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TRANSPARENCY in the scoring system!!!!!!?

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I wish there was a forum where people could swap ideas about the game. Even a bit of banter between closely scored rivals would add to the game… but that wouldn’t really be in the spirit of open competition, or would it?

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I have to comment on the running of the game. As others have commented, the Helpline are fantastic. Unfortunately the same cannot be said for whoever is responsible for the project overall. Some specific comments:

1. We are in Round 5 and the results tables are still not correct! …

2. The reporting has been very poor and lacking in insight. Times have really messed up here. They should have had a reporter playing the game (as you have done) and then commenting. To have someone gloss over the numbers and make random comments has simply exposed their lack of insight…

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Just that the Times could have been a bit more pro-active in reporting on it; not sure what they wanted or have got out of the deal.

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Good game. Obviously about fun and learning but it is easy to forget that and move into a more competitive mode. Ideally I would like to spend 6-8 hrs per week on it but do not have the time. I think it gives a taste of the breadth of the decision making that is required in running a business.

And Finally:

I’d like to thank those who took the time to answer my questions.

f you are playing the game and fancy answering the questions, or if I’ve quoted you and you fancy expanding on your answer, then please use the comments box. That’s what it’s for!

I’m away until Wednesday or Thursday, and will be frantically working on Round 7 when I get back, so you can have a free for all here while I’m away. 🙂

Fantasy CEO – Round 5 Annual Report

A number of the people who commented here have been kind enough to answer my questions about how they are playing Fantasy CEO, and I plan to write them up for the Round 6 Annual Report. I’ve been brutally short of time this week, or I’d be doing that now.

I ended up feeling rather sulky about this round. I couldn’t get the decisions to come good and I was working against the clock which added pressure. I pride myself on being able to track cause and effect across the width and breadth of complex systems so it is a bit of a blow to find that I can’t track the consequences of changing so few parameters in my head. Mind you, I thought we only had a dozen or so decisions to make but actually it’s about 50 – it seems I can’t add up either. As I said, ended up in a sulk with the whole thing. It seems I’m not the only one who’s willing to have a bit of a whinge about it all.

I’m finding it harder to stick to my strategy and I cannot tell if that is because it’s inherently flawed or if my early investment in new products, marketing, new plant and so on will in fact come good and start looking after themselves, making the next rounds profitable. I’ve been rattling around between the top 25% and the top 20% for most of the previous rounds, and I have a horrible feeling that I am about to slither down into the lower reaches of the league table. I am also aware that I am driving my strategy based on positioning my product in the market and then taking my financial decisions to pay for everything and so it’s not surprising that my financial outcomes such as stock price and bond price are all over the place. This is because I don’t really understand them and the game is ruthlessly exposing my ignorance.

As the game’s creator pointed out in the Times last week, being able to talk the thing through really helps, but like a lot of people I’m playing alone. In fact I feel like the Ancient Mariner, with wedding guests hurrying off as fast as they can when they smell the stench of albatross carcass. If you play this in a business school environment there would presumably be a session at the end of each round for discussion and analysis, and I know that I am missing out on lessons I could be learning because of that. It would help immensely if the Times had put up a discussion board at the start of the game.

Whinge, as I’ve already said. Moan.

I’m finding the complexity baffling, to be honest, and it is giving me a greater respect for the other functions in a business. For example, I absolutely see the necessity for 5 year plans, and this has increased my respect for those who run public companies and manage to balance the need for long term investment with throwing bloody gobbets of steak to the stock market in the short term.

All in all, when I hit “submit” at the end of Round 5 I just wanted to wail “it isn’t fa-ai-ai-air” and bugger off for a riotous weekend. In the end I did better than I expected: my balanced scorecard for this round was better than predicted though worse than last week’s and much worse than the game’s leaders are achieving. My forecasting was better too – I had a couple of dozen units left of one item, and only just sold out of the other three. Luck or judgement? I still have a horrible feeling it’s luck. I’ve still got a lot to read and get out of the reports we get at the end of the round, but I was interested to see that the stock market price of one of my robotic competitors has peaked and fallen, though mine is still gradually climbing.

In other news – I’m still not commenting on the scores as they compare against each other, because the Times’s published tables still seem very odd.

Fantasy CEO – Round 4 Annual Report

Scores

The Times have improved the way they report the scores with separate tabs for each round. They are still not ideal in various ways – not least in that the 4th round results aren’t up yet – but I have spent too much time this week staring at spreadsheets and daring them to blink to comment on scoring this week. Shane has sent me the aggregated scores and I’ll send them to anyone playing the game who emails me at astrea_gw at yahoo dot co dot uk.

Fantasy CEO or Fantasy Marketing?

It occurred to me this week to wonder if this is a game of Fantasy CEO we are playing, or is it Fantasy Market Research?

The analysis you go through and decisions you make in Marketing and Finance are relatively detailed compared with what you do in Production. It is also glaringly obvious that IT is taken for granted. Now I find this interesting. This implies Marketing, Production and Finance strategies matter but that IT strategy is irrelevant, that it is not a business activity even. I live and work in IT so I find that rather depressing, and wonder if it’s a home truth.

There could be any number of reasons for this. Maybe business studies teachers and management lecturers don’t understand IT. Maybe market analysis can be simplified in a way that production can’t. Maybe MSI’s main customers in business schools are more interested in Marketing than in IT, Production, Engineering and the other Techie stuff. In fairness the Times haven’t enabled the Total Quality Management and concepts around production could be worked through there.

In the late1990s, the netgeist started claiming that IT strategy is the strategy: this can be argued very strongly in the case of companies like Amazon and eBay, and it is often forgotten that decisions around IT were a sub-plot in Enron’s final chapter. I get my veggies online from an organic farm and the rest of my groceries are delivered by Tescos  which shows the wide range of businesses who have moved into on-line sales. So I buy into the idea that IT strategy is the strategy, but I’ll admit that I’m biased.

A lot of IT decisions seem doctrinal anyway: some advocate getting all your software and hardware from one vendor such as, say, IBM, to pick the one remaining candidate at random. In theory everything works together and it’s the vendor’s problem if it doesn’t. Others believe you should cherry pick the best and then mix and match, getting your HR software here and your Financial software there and stitch it all together. Some believe in “off the shelf” and others believe in “bespoke”. Yes, in some circumstances one approach is better than others but you get my drift.

It is tempting to come to the judgemental conclusion that we are losing our manufacturing edge in the West because our business studies classes and business schools focus on Marketing at the expense of Production and we are turning into a hemisphere of shop-keepers. I think it’s got more to do with sweatshops and containerised shipping myself, but losing our expertise in Production does not help. We should be automating and manufacturing locally even if the factories are run by half a dozen people and we won’t be able to do that if all we know is how to spend a promo budget.

All of this is irrelevant to the Round 4 Annual Report, but having spent the first couple of weeks thinking how complicated and detailed the simulation is, I thought it worth noting some of its limitations.

This week

Well I was rather cocky when I pressed the “submit” button on Friday, but I’m feeling a lot less smug now I’ve got my reports for this round.  I’m still pants at forecasting it seems – so much so that failed to predict how much cash I’d need and ended the round needing an emergency loan.    Having been overly cautious in the first three rounds, I wasn’t cautious enough this round and I significantly over-estimated how many of my main Low Tech widgets I’d sell.  How annoyed am I?

I thought I’d pushed through a barrier this week. When I looked at the pro forma balanced scorecard I found that my predicted score was much better than before, based on sensible decisions on forecasts I had worked out rather painstakingly. It is frustrating to find I am actually less skilled at the process of analysis and decision-making than before.  I think it’s not just poor forecasting though, I think it is poor contingency planning too.  Hey ho.

So what else have I learned so far?

I think I’ve finally realised that the advice about forecasting is just that – advice. I was trying to follow it as a process and getting frustrated with the vagueness of it all. Once I realised that they describe an art not a science I felt happier.  Mind you it’s an art I obviously haven’t mastered. In real life I’d like to think it’s nearer a science, otherwise how can I possibly take people who work in Marketing seriously?

I’m getting more comfortable using the tool itself, which makes using it quicker and slicker.

More usefully, I’m getting a more intuitive understanding of the balanced scorecard, (see previous post) and beginning to understand the pros and cons of the different ways of financing a company.

Or at least I thought I was doing all these things until I got this rounds results.  Still, I’m buggered if I’m letting one bad round put me off.  It’s worrying that I am going to be so extremely pushed for time over the next two weeks.

Next Week

Next week I plan to email some of the visitors to this site and asking them how they play the game – how long they spend on it, how much relevent experience they already have, how much is new, stuff like that.  If I get any replies I’ll pull out some extracts and publish them here, though possibly not until the week after next depending on other commitments and time.

Fantasy CEO – Round 3 Annual Report

How worrying is it that I was exchanging emails and spreadsheets with a complete stranger called Shane at 5.50 on Saturday morning? Hopefully he was emailing from Hong Kong or Sydney. He has harvested the first two rounds of results from the Times website. (Only registered players can log in – everyone else is limited to the table of averages).

A couple of unexpected things appear to come out the data.

Firstly there were only about 470 participants in Round 2, but not everyone who dropped out of Round 1 did badly: the drop-outs are spread remarkably evenly throughout. The chap who had over $5m profit in the first round has left us – maybe he decided to take the virtual dollars and run. I’m curious why people who were doing well dropped out – didn’t they realise how well they were doing, or did they decide their time was better spent being good at their real businesses? Or maybe their partners had had enough and unplugged their PCs.

Also, scores can go down as well as up: the people in the top 10 places at the end of Round 1 who are still in the game scored as follows in Round 2:

Round 1 Place	Round 2 Place	Dropped out
1st	191	–
2nd	39	–
3rd	1	–
4th	458	(dropped out)
5th	463	(dropped out)
6th	55	–
7th	75	–
8th	466	(dropped out)
9th	3	–
10th	16	–
11th	20	–
12th	51	–
13th	468	(dropped out)
14th	467	(dropped out)
15th	44	–

From 1st to 191st is a pretty dramatic drop, and you see what I mean about the drop-outs being evenly spread? The top 10 scorers in Round 2 came from all over the field and their scores in Round 1 were:

Round 1 Place	Round 2 Place
3	1st
47	2nd
9	3rd
63	4th
152	5th
18	6th
132	7th
290	8th
190	9th
100	10th

The ranking in the early rounds may be volatile but it’ll stabilise pretty soon I’m sure. If it was actually raining outside I’d be tempted to analyse the data to find out what the average change from Round 1 to Round 2 was, but there are weeds in the garden which need pulling up by the roots.

I’m not saying where I am in this whole thing, but I went into Round 3 feeling rather pleased because my ranking in the league had improved even though I’d fallen behind one of the five robot players I’m competing with in the simulation.

The Times tell us the final league table will be based on the Balanced Scorecard, which is how Shane and I have been ranking the players.

A brief aside here: the Balanced Scorecard was devised by Robert Kaplan and David Norton to help companies tune and track their progress in ways that aren’t just dollars and cents. For example, if being green is important to a company and it uses recycled paper even though it is more expensive, then its “sustainability” score goes up balancing out the fact that the “profitability” score goes down. The Balanced Scorecard is there to stop the lunatics, sorry, to stop the accountants taking over the asylum. In practice, I think it may just give them a wider range of beans to count.

So I spent most of Friday plonking my way through the tutorial to discover how to predict which way my customers will jump. In the end it still seemed to come down to licking my finger and holding it up in the wind so I am not convinced they were hours well spent, though I may have been using better informed lick.

Then on Saturday I checked my decision-making against the Balanced Scorecard. This forced me to undo various decisions I made last week – for example I’d made the production lines too big and I’m clearly not going to sell all the product I can currently make. I’m glad I’d doing this on my own, I’m not fond of recriminations and acrimony. I reached the point a couple of times where my decisions all seemed to balance out – if I spent more on marketing my “awareness” score went up but my “profitability” score went down. After bringing it up from about 34, I stalled with a predicted score of 43 until I realised that borrowing is good so long as your profits outweigh the interest charges, (think “buy-to-let”) and after that my predicted score climbed to the mid 50s where it stalled again.

One thing this has reinforced is the danger of relying on assumptions and not planning for things to go wrong. If you assume you will sell 1000 widgets and leave no room for selling fewer or more, then you’ll end up in deep doo-doo if your customers only want 500 or if they want 1500. It’s intuitive enough that you’ll be stuffed if you make 1000 widgets and only sell 500 because your fixed costs like staff, rent and insurance stay the same and your income’s gone down. However it’s not as intuitive that only having 1000 widgets if your customers want 1500 will stuff you too, in this case over-time will eat up your profits and if you run out of stock completely as I did in Round 1, you’ll just hand your competitors over to your customers on a plate – in real life you’d never get them all back.

So how did Aphra Inc do in Round 3? AT first sight it looks as if I’ve been over-cautious again; I am certainly solvent, but I could have sold more widgets than I made. This is often described as “a nice problem to have” but in reality it’s still a problem and it means I’m not accurate enough with my forecasting.

My investment in marketing and sales activities is paying off, and the decisions I make are doing a good job of making my original strategy happen. I am pleased to know that I can have a vision of what sort of company Aphra Inc should be, and make the decisions that makes that happen in our little simulated on-line world.

The differences between my predicted results and my actual results this Round show that my financial decisions and marketing decisions were better than predicted, but running out of stock damaged my overall score. The Times have not yet updated the scores published on their results page, so it’s impossible to tell where I rank among the remaining players.

The phrase “could do better” is ringing in my head.

Onwards and onwards.

PS – I’m not the only one focussing on the Balanced Scorecard, The Times today have written up the Balanced Scorecard up in today, with a mention of this very blog!

Fantasy CEO – Round 2 Annual Report

First of all, Aphra Inc. very nearly didn’t make it into this round. There was a power cut in the middle of the final “board meeting” (me, my PC and a bunch of printed spreadsheets) and the lights were still out when I got up on Monday.

An emergency board meeting was convened on Monday morning (me, my work PC and the faithful printouts) but it was uncertain if the board were going to be able to implement their decisions (the security guys at work have implemented fearsome controls over downloading and installing stuff). In the event the disaster recovery plan operated smoothly (it was ok, the Excel file is only a file so it made it past the security policies) and the board communicated its decisions successfully. Less flippantly: a word of praise is due here to the help team at MSI – I emailed them in a panic about the power cut and they said they would enter my decisions for me. This is the second time I’ve contacted them and I am genuinely impressed.

I’m nowhere near as far in front of the notional pack this time, but that is not such a surprise. (Remember “the pack” comprises the five dummy hands being played by the computer simulation). I am the third most profitable, in a field of six.

My strategy is to match the products very closely to the customers’ needs, and new products take a while to develop so I was without a High Tech offering until “November”. For the rest of the time I was making do with only one product which was de-tuned especially for the Low Tech market. As a result, I lost market share this round because I missed out on almost all the High Tech market sales. To be honest, that was no surprise – and hopefully it will be worth it to have perfectly pitched products. However, I also underperformed against my potential market share in each segment, which suggests that I missed a trick and should have spent more on marketing and sales.

The main thing I’ve learned so far is the importance of accurate sales forecasting – there’s a limit to how much you can protect yourself with decisions such as how many widgets to make, how much to invest in your factory or in marketing, how much to borrow and where. It’s really clear that if you get your sales forecast wrong you’ll either be deep in red doodoo, or you’ll not manufacture enough and miss sales that way.

Despite these good sales in the Low tech sector, I was the third most profitable company in the group because I invested so much time and money on developing the perfect product for each sector. Next round is key – I really do need to maximise sales and start reaping the rewards.

One good thing about the kerfuffle with the power cut is that I have discovered a whole extra set of results on the Times website. I’m not doing very well on the balanced score card – my scorecard score was 42 out of a possible 82 in Round 1 which is a slither above average and considerably lower than the front runner who’s score was 52. In round two I got 46 out of a possible 89. It is the balanced score card which is used to determine the final results, so in these terms I am depressingly average.

I can see that if I am going to gain real insights then I am going to have to get stuck in to forecasting sales properly and also make the effort to understand how the decisions I make play out against each other and against the balanced scorecard.

In the meantime, here is the Times’s own commentary on the results of Round 1:

The good news is that most people have made a profit. In some cases, quite an impressive profit – the top of the table goes to a player whose $5,209,959 is more than $1,000,000 ahead of the next in line. Towards the bottom end of the table, a handful of people earnt less than $100,000 while one player scraped together only $31,343. Almost a quarter of players went into negative numbers, with the worst loss being $14,201,485

Well, I wasn’t the one who cleared $5,209,959 profit in Round 1 or the person who made over $4 million either, but I did scrape in $2.5 or so which has kept me at the table. Incidentally the field appears to have dropped to about 630 from the 3880 who signed up. Many thanks to “Shane” for converting the Times’ Round 1 spreaddie into something sortable, informative and useful and then emailing it to me.

Fantasy CEO – Round 1 Annual Report

I posted my final decisions last night with a sense of relief and anticipation.

The manuals tell you to decide on a strategy and stick to it and helpfully offer six to choose from. Presumably you could devise one of your own if you had the time and the inclination. I chose the one which suits my temperament best and was fascinated to find that most of the others rubbed me up the wrong way one way or another. Left to myself I wouldn’t have thought of them or else would have dismissed them out of hand. I have decided to sell the customers what they want and to hang on to ageing product lines so that they drift into the low tech end of the market. Other strategies focus on price, or on keeping internal costs low, or on servicing one specific market sector. You have no idea how glad I am that they provided pro-forma strategies to work from!

I don’t appear to have done badly but I am playing one hand in a six hand game but “the others” are just dummy hands being played by the computer. I’ve no idea how well I’ve done in comparison with the other 3879 actual players, or even how many of the other 3879 started. The Times today is noticeably silent on that.

So my products have sold well – more than anyone else’s. In fact I could have sold more if I’d made them which is not so good. Not only is it an opportunity wasted that won’t come again, I could have spent less on advertising and marketing to make the same number of sales and more profit. I’m also cash-rich at the moment which sounds nice but I’ve borrowed more than it turns out that I need, so I’m paying interest unnecessarily. All in all, I’ve wasted money, and it doesn’t feel so good when I put it like that. I was afraid of the sales not coming in, so I borrowed money and limited my manufacturing runs based on pessimistic forecasts. If I’d not borrowed money and I’d over stocked the product and the sales hadn’t come through, I’d have been deep in the doodoo.

Interestingly, though I sold the most, I’m not the most profitable. “Digby” made more money and spent less cash doing it. Not surprisingly, “Digby’s” share price is better than mine, though I am a strong second in the field of six; I issued shares to raise money and he didn’t, and I’ve got the highest total value in the stock market (market cap).

But those lost sales and that over-borrowing is annoying me. I was too cautious this round. Let’s hope I don’t let it go to my head.

(PS – sorry for the ruthless self-promotion with the Digg doo-dad, but I am trying it out to see how it works. Nothing attempted, nothing learned).

Fantasy CEO – Round 1

This is really hard work! I know that business is complicated but it is another thing altogether to get your head around an entire (simulated) manufacturing company in a weekend, and around the skills that are usually spread right across the marketing, operations and finance functions and beyond. I know it’s my own blame that I’m cramming this weekend, and that I am doing it on my own, but I’m still feeling a little cabin crazy.

I’ve asked myself a few times, ‘why bother?’ It was a lovely day this morning – I really fancied going for a walk. I’ve concluded that I want to do this for a variety of reasons. As I mentioned yesterday, the first of these is bloody mindedness: it was making me nervous, therefore I have to do it. Call it personal growth: feeling the fear and doing it anyway.

Another reason is that I am enjoying using the simulator – it’s the most sophisticated set of spreadsheets I ever expect to come across; it’s so sophisticated it doesn’t even look like a spreadsheet. There’s no getting away from it, the simulation and the training material are cool.

I am also aware that as I work my way through the eight ‘year’ cycle I’ll learn things I don’t yet know I don’t know; things about how decisions are made in each function, about how tipping a lever here will impact on the figures over there, about just how important good data really is, and that will be interesting. It is also 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; as a training course provided courtesy of the Times. I know that the Times have set it up as a competition and there will be some immensely competitive folks doing exactly the same thing as me this evening, and I suspect that they will be taking better decisions. This simulation was developed for use in Business Schools where each “company” is played by a number of students each of whom takes a different role – marketing manager, production manager, finance director, etc. I’m just incredibly thankful I’m not having to discuss every single decision I take. It’s hard enough as it is.

So although it’s hard and there have been several times today that I’ve really wanted to stop, I’m carrying on. Besides which, I think the attrition rate will be pretty high; I very much doubt there’ll be 3880 of us by 5.01 pm tomorrow, when we should all have pressed “enter”. But I don’t submit my decisions tonight I’ll lose the chance to participate over the next few weeks, and that would be a shame.

I suspect my decisions are pants, though.