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Cisco Systems Uses Games to Help Teach Employees

Posted on: Friday, 21 October 2005, 03:00 CDT

By John Murawski, The News & Observer, Raleigh, N.C.

Oct. 21--Cisco Systems has perfected the science of employee training by using tokens of capitalism: poker chips and play money.

Borrowing a page from game theory, Cisco employees hone their entrepreneurial skills on a board game loosely modeled on the classic Monopoly.

Unlike the toy-store version, the Cisco game is a marathon exercise that puts company-sales pros through a two-year business cycle and requires 1" days to complete. The team that ends up with the most Cisco currency -- called Ciscoleans -- wins.

"Everyone loves games," said Sam Barcus III, managing director of NewLeaf Partners in Nashville, the consulting and training firm that designed the Cisco game. "This is a business game that has the same energy and involvement as the games we grew up with."

The game was rolled out last month at the telecom gear maker's new education and training center in Research Triangle Park. It is one of several simulation exercises that employees and Cisco resellers complete during a two-week boot camp.

All are designed to teach through experience, rather than drilling rote memory, as PowerPoint-focused lectures often do.

The game is meant to help company sales reps understand the business from the perspective of its resellers -- the people who sell Cisco's products to phone companies and Internet providers.

In the game, the Cisco sales representatives, playing the role of reseller, bid on projects against other resellers.

Barcus, whose company has designed board games for other corporations, describes the Cisco game as harder than checkers, but easier than chess. It typically requires 16 players and a moderator who takes bids from four competing teams. The game depends on strategy and a willingness to take risks. The teams start out with equal assets and some debt.

The game proceeds as hundreds of bids to sell Cisco products. Most bids are rejected by the moderator, who calls the shots. Throughout the game, the teams plot strategy to win contracts.

First, players have to decide whether to diversify or sell Cisco gear to a market sector, such as financial institutions.

To broaden their customer base, the teams hire and train employees.

Lesson 1: Hiring and training employees costs money, up to $100,000 Ciscoleans per sales rep.

Lesson 2: A reseller can't recoup any investment for at least one quarter.

"I don't think I really understood how it all [was] interrelated until Q3," said Ronnie Harrell, a regional manager at RTP who played the game.

A team doesn't have to invest in new talent. But if a team has a limited customer base -- say, government contracts or manufacturers -- it's more likely to suffer during an economic downturn that sours a market sector. The moderator introduces economic trends that hurt or help businesses that shop for Cisco equipment.

A team that's dependent on one type of customer will likely have a lousy quarter.

Another issue is employee attrition.

A team may have invested $50,000 Ciscoleans to train a top sales representative, only to hear from the game's moderator that that employee has accepted a job from a competitor.

What to do?

The team huddles to consider options. Counter-offer? Train other workers? Hire a contractor? Lose that employee?

Each option costs money and eats up valuable time.

The teams are selling Cisco products and themselves. So while one team might undercut a competitor on price, the team that charges more can offer customer service. Teams can win contracts with low bids or through superior qualifications and services.

Because outcomes are never assured, teams have to revise strategies to adjust to changing market conditions.

Thus, Ciscolean fortunes rise and fall.

"Some of the good and the evils of the capitalist system showed up," joked Bruce Clounie, a sales engineering manager at RTP.

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CSCO,

Source: The News & Observer

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