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Management Games No Laughing Matter

February 7, 1996

NEW YORK (AP) _ Nigel Downing regards business as little more than a game, so he figures people would be a whole lot better at it if they understood the rules.

And the British management consultant reckons that there is no better way to teach the game of business than with a game about business.

``It’s a metaphor that people seem to like _ particularly Americans,″ he said.

Downing is the creator of Enterprise Profit Ability, one of a number of games companies are using to teach their employees how business operates _ and ultimately, how to make decisions that will benefit the company.

Participants are divided into five or six teams and given a board like those used in any typical parlor game. Colored plastic chips represent money, products and debts. Board spaces correspond to equipment, inventories, payroll and other parts of the business.

The idea is to win orders while watching how money flows through the business from order to receivable to cash and then out again to cover expenses or expansion.

``You can tell people they won’t be getting a pay rise because profits are down, and that goes right over their head,″ Downing explained.

But teach them why cash orders are better than ones on credit or how high volume sales aren’t a good thing if there’s no profit margin, and workers can start helping to improve cash flow and earnings, he said.

Downing’s client list includes Hewlett Packard Co., AT&T Corp. and Chemical Banking Corp.

Abbott Laboratories used a version of the game to train 550 managers in the United States and Europe in the late 1980s and early 1990s.

``What we’re trying to do is to get people from different functions see how they can impact the commercial health of the company,″ said Barry Childs, director of learning for Abbott’s diagnostics division in Chicago.

``Usually financial training is kind of dry,″ he added. ``This is fun and exciting. People get to understand how they can impact the numbers.″

The latest version of the game, which costs companies about $100 per worker, has been available in Europe since 1992. But it wasn’t until corporate America started discussing the philosophy dubbed ``open-book management″ that the game caught on in the United States.

``Open-book management″ is the idea that, all things being equal, even employees at the very bottom of the corporate ladder would rather do a good job, said Gary Roberts, an associate professor of management at Kennesaw State College near Atlanta.

The turnaround of Springfield Remanufacturing Corp. of Springfield, Mo., helped popularize this philosophy.

Its chief executive officer, Jack Stack, led an employee buyout of the former International Harvester (now Navistar) subsidiary in 1983 and opened up the company’s books to all employees. The company went from a money loser to a $100-million-a-year corporation.

Many industry watchers looked to SRC success as a teaching tool for open-book management, and the company created a division called The Great Game of Business to teach others how to adopt such methods, said Charlotte Eckley, director of business development.

Enterprise Profit Ability incorporates some of that philosophy _ especially teaching employees how the business operates, Downing said.

But even if open-book management turns out to be a fad in the business world, Downing figures a market will remain for his game.

``In any business, you have to make a thing called profit,″ he said. ``And in any business, you are going to have a thing called cash. It’s always been that way and that’s not going to change.″


Eds: For information about Enterprise Profit Ability, contact 1-800-537-6256.

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