The word FINSIM stands for FINancial SIMulation.
In FINSIM managers and executives get an overview of how their whole organization functions. They are able to relate their daily actions and decisions to the company’s profit and loss statement, balance sheet and cash flow statement. The managers are able to SEE how every action of theirs’ impacts the bottom line of their company.
Managers and executives are grouped in teams which run one company each, competing with the other teams. To see if they win or lose, they have to complete the financial statements every simulated year.
The learning curve is steep and with their new insight, participants come up with ideas how to improve profitability.
A CEO wants his or her people to understand business basics, from cash flow, to ROI, to sniffing out new opportunities and eventually becoming more involved in the decision-making that leads to bigger profits.
Ram Charan
Managers and executives learn the fundamentals of cash, assets, liabilities, balance sheet, net worth, velocity, return on investment, growth etc. They develop their financial acumen. While these ideas may sound complex, they are not.
Think about your best teacher in a subject like chemistry. Once you understood that the atom was made up of protons, electrons, and neutrons, you then had the fundamentals to solve any problem in chemistry.
In FINSIM you experience the same with finance: When you know the fundamentals, you can “get” the basics for how business finance works. We take the complexity and mystery out of finance by focusing on the core fundamentals.
FINSIM is aimed at equipping critical non-finance functions like sales, production, operations, R&D, HR, IT, legal, etc., with financial acumen, required by companies to succeed in today’s dynamic environment.
FINSIM takes complex, intimidating financial concepts and jargon, makes them understandable and creates a set of fundamentals that can be applied to business situations every day, everywhere.
During the game play, people realize that they are interdependent on each of the departments to function optimistically. So instead of taking decisions locally or departmentally, they should collaborate and share responsibility, to achieve organizational systems and goals.
Participants measure the level of collaboration they have within the team. Are they are at level one? that is “speak only when needed” or at level 5 where they actually “plan jointly and share responsibilities”.
In the game the teams’ performance is measured on quality and financial parameters. The quality of decisions made by the team impacts the results. Some teams take decisions based only on their experience and perceptions. Very few teams take decisions based on the data, which is already available in the organization. And very rarely teams maintain the dashboard of key performance parameters to take decisions.
In the debrief session, participants experience ‘aha’ moments, especially when they realize the opportunities they missed for creativity and innovation. The opportunities were lying just under their nose, but they couldn’t see it because their thinking was obscured by their mental boundaries. They accepted the things at face value without challenging their assumptions, and organizational rules. Learning to challenge the mental boundaries, and organizational structure, is the beginning of innovation.
In FINSIM managers and executives have to manage an organization. In the game they have to perform activities like:
Attending FINSIM (finance simulation) is like putting on a pair of glasses— suddenly the fundamentals of finance are crystal clear.
FINSIM is played for 24 weeks. Each week takes around 30 minutes to complete.
At the end of first 4 weeks of game-play learners create their first cash flow statement. The formula they learn is Cash Flow = Receipts – Payments. The learners experientially understand what is their job with respect to their company’s cash flow.
At the end of 8th week of game-play the learners create their first profit and loss statement.
The formula they learn is Profit = Income – Expenses. They learn the P&L concepts:
At the end of 12th week of game-play learners find the networth and formula they learn is Networth = Assets – Liabilities. And so on participants learn as they move on to upcoming weeks.
Managers and executives are invited to experience business simulations. A business simulation combines immersive activities that mimic real-world challenges with a targeted debrief that connects the lessons learned with the reality of the workplace. It allows participants to learn by doing, and not by listening, reading, or watching. New competencies are developed, more information is retained, and individuals are more
likely to apply it to their real world back on the job. Business simulations are:
FINSIM captures precisely the kind of business thinking we try to cultivate. It’s a great way for leaders at any level to develop their financial sense.