How can Business Simulations help in Solving the 70:20:10 Dilemma?

Recently I was engaged in an informal chat with a few colleagues, when the 70:20:10 model reared its head. Based on the various opinions on the subject, I did my own investigation. What really surprised me was that the 70:20:10 model has been around since the 1960’s.

However, my real concern surrounded the lack of details regarding a proper research study on the application of the 70:20:10 model. After some research and intense scrutiny on the web, it appears that Charles Jenning has the most research & methodology on the subject of the 70:20:10 model which to his credit, seems to be the most comprehensive explanation. In spite of the lack of empirical data, the 70:20:10 model in its simplicity has already been adopted by several South African and Global organisations.

So, what is the 70:20:10 learning model?

70: Refers to the 70% of the workforce who learn through experience and practice

20: Refers to the 20% of the workforce who are engaged in conversations with people who know the job, establishing networks and focussing on asking the right people

10: Refers to the 10% of the workforce who are engaged in structured formal learning, e.g. classroom courses/workshops

Learning professionals will admit that the effectiveness and efficacy of structured learning has diminished drastically over time as the workplace has evolved. It has been quite apparent that in an economic downturn, structured learning, like classroom-based courses, is the first to go. The risk of adopting a process that relegates formal learning to just 10% is that the foundation phase of development is overlooked. This also means that a lot more is riding on the ability of all employees, regardless of their learning styles on becoming competent through learning from others.

Businesses are constantly evolving into dynamic, creative entities pursuing any and all means of achieving the highest levels of effectiveness and efficiency in achieving its business strategies. So it makes some sense why organisations would consider the 70:20:10 learning model, especially since it addresses the 2 key issues facing organisations, cost and timeliness.

C. Jenning lists the Costs associated with structured, formal learning as: absent staff; technology & equipment, facilitators, travel expenses and Timeliness with reference to access to experts; finding the relevant knowledge; being able to commit to memory and apply knowledge. As Charles Jennings states, “Obviously business expects people to learn at the speed of business”.

As a result for this need for speed, the challenge of achieving the 70% goal (learning through experience & practice) is not feasible. There is very little chance that senior level executives and managers have sufficient time in the day to enable experiential and practical learning. Learning is very much a personal endeavour. We manage our own learning and all managers can do is to provide the necessary channels, opportunities and resources.

Research has definitely proven that experiential learning is the most effective way to increase knowledge and create a lasting change in behaviour.

So the question arises….how do we solve the challenges affecting the implementation of the 70:20:10 model?

Business Simulations have proven to be most effective active learning methodology which can certainly address some of the challenges of achieving the 70% goal and perhaps the 20% goal as well. A survey conducted by Faria (1998) found that 97.5% of accredited business schools include simulation-based training in their curriculum. 65% use simulation-based training in business policy courses, 63% in marketing, and 44% in management.

Have you ever tried explaining complex business and financial concepts to your employees? If so, you’ll know that it’s difficult because many of the realism and experience of business decision- making can be lost in translation. Many organisations face the challenge of conveying the understanding of their strategy to the workforce, which in itself is an impossible task. Employees need to construct their own understanding of the strategy and how it relates to their particular role. A lack of understanding of the organisation’s strategy will result in the lack of knowledge of the inter-relationship between strategic execution and business results.

So, what are business simulations?

Business simulations are activity-based learning intervention designed to provide a structured, risk-free environment in which to learn, apply and improve skills while engaging in strategic business decision-making. As a consequence of the simulation, participants will understand the impact of their actions and the inter-relationships between the various functional divisions within an organisation. There are many references to the simulation ‘game’ which can be construed as a source of entertainment or diversion. It is important that business simulations are positioned where the participants totally immerse themselves in the ‘simulation business’ to create the reality and sharpen their propensity to learn.

A distinctive feature of business simulations is the superior design, which enables the participants to build knowledge and experience over a short period of time, which would normally take years to acquire. Most effective business simulations place participants in team-based setting where they lead their business by making strategic, leadership, operational and financial decisions.

What’s in it for the participants?

Effectively developed and facilitated business simulations allow participants to experience the rewards of effective strategic & tactical decision-making, rigorous market and financial analysis and successful teamwork.

These types of simulations build organizational alignment on the key strategic imperatives of an organization. However critical these focus areas may be, the last thing you want to do is to subject a group of participants to another intense classroom intervention.

It is therefore imperative to enable experiential learning by providing participants with an incredibly engaging, challenging and fun experience, while equipping them with the skills and knowledge they need to succeed in the real-world.

There is no doubt that learning organisations need to create competence at the speed at which the business evolves. Business simulations have the benefit of enabling participants to immediately see the cause and effect relationship between business decisions and results. They are able to test strategies and tactics in a competitive and dynamic environment.

Participants are also able to experience the challenges and benefits of collaboration in high-pressure settings. To further enhance their learning experience, participants are placed in team-based settings where individuals are encouraged to take on functional roles in which they have little or no experience. The outcome is that they acquire a more realistic perception of how other roles function within the business, in addition to having an eagle’s eye view of the organization as whole.

Interacting with peers can be one of the most engaging and effective aspects of a successful learning experience. This is clearly evident in the 70:20:10 model, where 20% of the knowledge and skills is acquired through conversations with the right people with the right knowledge. Encouraging both individual and team learning in a safe ‘learning laboratory’ achieves this objective. What better learning opportunity than to allow your employees the opportunity to explore strategies, acquire skills and utilise new frameworks that prepare them to lead your organization into the future?

Business Simulations allow the participants the freedom to freely experiment with strategies and policies without jeopardizing the organization. As a result they are able to reflect, analyze and discuss their decisions, which unfortunately in the real world, the value of which will be diminished by time constraints.

What factors should you consider when deciding on business simulations?

There are many types of business simulations and games out there. A number of them are offered online as well as classroom-based. In accordance with the 70:20:10 learning and development model, organisations are driven by the need to develop their workforce in the most effective but efficient way. However, individuals need to take ownership of their learning and all that you can do is to facilitate, support and help make it happen.

In order to ensure that your business objectives are met, careful consideration of the business simulation partner you select is of paramount importance.

  • Select a business simulation partner who has the credibility (100% successfully run business simulations), expertise in various industries both nationally and globally and the experience to support the achievement of your goals.
  • Ensure that the business simulation platform is a robust and stable one, designed with maximum flexibility and ease of customization and compatible with other technology platforms. Thorough testing and debugging of the system should be done prior to a pilot programme being run, so that no manual adjustments are necessary.
  • There should be on offer; core programmes that meet the client’s needs cost-effectively and efficiently, as well as the option to customize as per your specific needs with a tailored pricing strategy.
  • Focus on the provider who looks at experiential learning from a business perspective, rather than a training perspective. This will ensure that the learning outcomes affect your bottom-line results. However, also ensure that there is a balance in terms of the approach to hard skills (technical and business acumen) and soft skills (interpersonal and leadership behaviors).

To achieve your business goals, you depend on the competence and the action of impassioned individuals within your workforce. By allowing them the scope to develop themselves, you ensure they have the ability to develop your organisation. You increase critical skills and knowledge and also improve productivity, retention and satisfaction, which in turn drive your business to greater heights.