Automotive company uses simulation to build commercial acumen in managers

Background to the customer:

Jaguar Land Rover is a global automotive company with an enviable brand and customer loyalty in all its markets, including luxury and SUV (sports utility vehicle) segments.

Customer needs:

Like all its major competitors, the company operates in a highly competitive and regulated global market and, as a result, it needs to ensure that its community of managers are performing at their peak in terms of their commercial acumen. HR, in consultation with other business departments, designed and commissioned an integrated portfolio of taught and experiential learning sessions on this topic. These were aimed at different manager grades, each addressing a different horizon – operational/near-term, operational/medium-term and strategic/long-term. Each session runs for one or two whole days, which is a significant commitment in terms of manager time spent away from the job.

The solution:

The company commissioned a custom business simulation.

The simulation allows teams to manage sales, market shares and profits for a representative portfolio of company products across different markets for four periods, which can be quarters, years or longer – all within a single day!

Core features include organisational decisions such as corporate branding and marketing, plus product-in-market decisions such as price elasticity and supply and demand balancing.

The simulation was customised with particular features of importance to the customer such as:

• CO₂ emissions with national targets and penalties
• The impact of foreign currency movements on sales and costs within different markets
• “Variable marketing” support to dealers and its impact on the sales of different vehicle types depending on their maturities and market positions
• Special projects which could be commissioned to impact the brand or dealer channels
• Market updates at the start of each round covering key competitor activity such as new models and promotional price campaigns
• Global updates covering relevant economic factors and government policy changes
• These market and global updates were delivered by professional actors in the form of BBC/CNN news bulletins to maximise their impact and realism

Participant feedback:

Below are some direct quotes from the company managers about what they learned from the simulations:

• Working in cross-functional teams means you think in a wider business context, and learn from each other
• Teaches how quickly market conditions can change, through using market updates
• Simulation teaches you how to react to market conditions and that you don’t need to react to all market updates – it’s better to stick to a good strategy and follow through on it!
• Amazed at how nimble you have to be to stay above the game, as market conditions can go wrong so quickly
• Learnt you need to pay attention to all data that is available and not just what you think is important – e.g. look at customer satisfaction as well as financial performance
• Simulation enables delegates to link to the bigger picture

Overall conclusions and value:

We designed the simulation in close partnership with a senior company director who also acted as both sponsor and lead subject matter expert. They also introduce each session and act as the “CEO in the simulation”, judging the final results, performance and presentation of each team of managers. The winning team is presented with a Commercial Acumen Trophy at the end of each session, and all teams’ scores are recorded in an online league table which all previous teams can see.

The fact that a senior sponsor is happy to invest half a day's time every month to support the Commercial Acumen Simulation with the manager community pretty much says it all in terms of the value of the simulation!