NetApp Meets Monopoly and SimCity

Every year we get our top 100-200 people together for a three day Senior Leaders Offsite. The specific goals are different each year, but the general idea is to help people understand our high-level vision and strategy so that they can run their piece of the company more effectively.

Lately Dan’s staff has been working on our strategy to reach $6 billion and beyond, so this year’s goal was to help everyone understand the key success factors and pitfalls that we foresee over the next several years. We could have spent hours on stage with PowerPoint slides explaining our beliefs in gory detail, but we thought that letting people play a computerized business simulation of NetApp would give them a much more visceral understanding of the strategy. Think of it as NetApp meets Monopoly and SimCity.

Each team consisted of five people making the same sorts of decisions as our executive staff. Should they cut investment in new products to fund marketing? Should they increase the direct sales force or sign up more resellers? There were also confounding events like product delays and competition from disruptive startups. (We didn’t build the model ourselves – we worked with a company that specializes in business simulations.)

I didn’t get to play, since I helped design the game, but it was fascinating to watch and coach. I worked with one team that was trying to understand why their revenue had fallen behind, despite strong investments in new products. They had slashed their direct sales force, hoping to replace it with resellers, but they didn’t take into account the time it takes for new resellers to get up to speed. Because of the product investments, the few customers they did have were extremely satisfied. We could have PowerPointed till we were blue in the face about the tricky balance between direct and indirect channels, but nothing brings a lesson home like watching your market share plummet as a result of a bad decision.

Part of what made the simulation so interesting is that the teams weren’t competing against the computer, but against each other. There are no “right answers”, because what works best depends on what the other teams do. If you invest heavily in brand awareness, that might give you an advantage, unless everyone else does the same.

Early in the game, I noticed that engineers argued for more product investment, and sales people pushed for channel programs and marketing, but that changed as the game wore on. One sales VP told me, “My table didn’t have any engineers, so we completely underinvested in product development. Lots of sales people but nothing to sell.”

By the end, the discussions were much more balanced. Given that our goal was to help people understand the big picture, what made me happiest was hearing how much the arguments at all of the tables sounded like the arguments we have in Dan’s executive staff meetings.

Comments

[Rajesh Srivastava]

Impressive! I hope the exercise ended with some valuable lessons and innovative approaches.

[Ron Long]

Scenario based planning and cross functional integration will take us into the next wave of growth. Thanks for sharing this insight. Take a look at http://www.gbn.org for more thoughts on future based planning. Good Stuff.

[John McArthur]

Dave, Having recently spent a day with another company at their offsite planning meeting, I was struck by your last comment, "our goal was to help people understand the big picture." It's always a challenge to get people to look beyond their area of expertise or business unit to see the overall impact on the corporation. Your post made me think of an article on News.com I had read earlier this morning: a nearly-free way to generate some innovation and test business ideas using Second Life. Here's the link: http://news.com.com/A+winning+business+plan+for+
Second+Life/2100-1025_3-6160433.html?tag=nefd.lede

[Leis]

So a designer of the game can't play - interesting.

"what made me happiest was hearing how much the arguments at all of the tables sounded like the arguments we have in Dan?s executive staff meetings."

Why did you think different was possible?
They were trying to please the execs monitoring the game.

[Alex Gorbachev]

That sounds like really good fun learning. On scale of 100 people - it must be an impressive "game".

On the other hand, I would guess that simulated environment is limited as all cause and effect dependencies are predefined. That's why you can't play it - you know them by design.

Thanks for sharing this.