Life As It Goes By

To be frank, I was and still am hit down with cold, sore throat and a bit of fever. They always come together, don’t they? I have fought them for the past 2 days and today I have finally succumbed to visiting a doctor. I believe I did well. In fact, I have never won a battle with sore throat. It makes you cough so hard at night that you can rest well to combat it. And worse still, its companion of cold and fever will give a harder time. Sometimes, you just forgot how sick you are when you look at the speed of your hands in covering the mouth, nose and every other part of the body that is feeling cold.
I am proud because I manage to survive my weekend class as well. To my surprise, my team (not that I am playing a dominant role here) emerged champions. This will be what I would like to talk about today.
Heard of this game, Topaz? No no no, it’s not a website for games, not the silicate mineral and definitely not the 1969 movie. Don’t blame you though. It’s first time for me as well and it took me a hard time to find it online as well. It ended up to be from a company named Edit 515 Ltd. Apparently, the company decided to do some website (www.edit515.co.uk) “maintenance” over the weekend and there’s no hints available while we play the game (nothing much as well though now that it’s up and running).
This is a management game which allows teams of 5 to compete. Each team acts as a company with roles in Marketing, Operations, HR (that’s me!), Finance and the Managing Director. Every team or company starts off with the same data and each team shall decide what to do next to improve the situation in the next quarter. There are only 5 deciding quarters before the champion is decided. The one with the highest share price at the end of the 5 quarters will be the winner. I must say the amount of data is handful for an amateur or even trained management student. Probably not for practical managers. But the rules and key indicators could be slightly different from the real world, so there are still some difficulties involved. To make the game more realistic, the outcomes of the data input by each team may not go totally in line. For example, if there is a request to purchase 2 machines in the quarter, there may only be 1 machine available. Based on quite a handful of formulae (I believe), the data from each team is calculated with the effect from one another and some injections of the surprise elements. But nothing drastic is observed and this keeps the game real.
So, the teams are basically competing with one another on resources such as people, market shares for the 3 different products in 4 different markets and share prices with the pressure to give dividends in the 1st and 3rd quarters.
We started off well by topping the others with the highest share price due to some tweaks we made on the marketing front as well as giving reasonable but good dividend. In the background, we are jumping up and down to solve our production problems to meet the required backlogs. We purchased 2 machines and only got 1. Backlog is still high. Marketing is complaining. Operations and me are at his mercy and the MD and Finance are at ours. So, we went on to buy the second the machine. As the machine will only arrive 2 quarters after purchase, we have to hire more and that’s where I have to come in. Oh shit! Job market has been shaken by competitor who raise wage by 50 cents per hour! No wonder my salespeople are leaving. I have no choice by raise wages across the board and try to recruit more. And then, I made a mistake. I recruited twice more than projected, having misunderstood the rules of employment. But I think it was a good mistake. It was enough to sustain the growth we need in boths sales and operations.
So, to cut it short, our share price dropped in the 2nd quarter and came in 5th place as our backlogs still creates problem for us. When the machine arrives in the 3rd quarter, we were in the 2nd position and with better financial position. We were fighting to purchase the 3rd machine but it’s dividend time and our overdraft amount is running low. We have to forgo the 3rd machine and stick to the 3 work shifts (part of the reason why my people are still leaving). The 4th quarter turned out to be a beauty as our share price rocketed to 172, beating the worst company by 117. We expected it as we knew this quarter (based on previous trend) will be the quarter with the most purchase. This is also when we have 8 machines and the most staff. But we still have backlog!! This still keeps us (Ops and HR) restless. We are already not having the largest market share in 1 or 2 products and half of the markets but there are still many orders to meet. And most importantly, it is time for final decision. So, we decide to hold our balls and give our best dividend payout and keep current staff strength. We raise our prices to keep our orders within what we can produce. FInally, I push for a raise in management budget (though only about 8 or 9%).
It turned out we survived the competition with the lecturer’s pick (team 5) falling behind to 5th position. We kept our reserves highest among them and we maintain the demand with less backlog. But our share price plumment 156, edging the seconds by 3. Maybe we have paid too high a dividend but our high reserve saves our ass.
The debrief was really good as well. We got to learn about what happened to the other teams and realized there are many ways to tackle the issues. There is always a risk in each decision. Some took it lightly and paid for it. Some are too adventurous while some are too cautious. Finally, there are also some where things really go haywire, are fighting their lives to get things back in shape. And it just gets worse.
On my part, I learn about how decisions are made in the management team. How these data are so critical and how scary they can be. When the panic button is pushed, many wrong decisions can happen and when everyone loses their instincts and their ability to stand up to defend their decisions, failures are not far away. And for those who are chasing, there is always an added pressure. This pressure will lead to the above situation and a supposedly good performing company will run into troubles of its own.
If you are interested in more of this, you may also visit the Global Management Challenge (GMC) website (www.worldgmc.com) for the annual event, held in April. The game is also designed by the same group of geniuses, just that it is more tailored to the current needs of the business environments.

(dated: 10/12/2007)