Walk into the St. Louis headquarters of Ameren Corp. on any given day, and you’ll usually find employees gathered in large groups, staring intently at various computer monitors.
A big company announcement on the company intranet? Another stock market plunge? Collaborative commerce?
Hardly. These hard-working employees are, in fact, playing a video game. Yes, a video game. And while most companies go out of their way to keep workers from playing games on company time, Ameren management actually encourages the practice.
You see, the Ameren workers aren’t playing Spiderman or Halo or Grand Theft Auto. The game of choice here: “Race Toward Shareholder Value.”
No kidding. While “Race” has no digitized sound effects like the sucking pops heard when Peter Parker scrambles up a building, it is a genuine arcade-style video game, replete with digital graphics. Of course, these graphics don’t show Super Mario or legions of space invaders. Instead, they depict dry business concepts like depreciation, earnings per share, and free cash flow.
Nevertheless, employees get to role-play, assuming the persona — and checkbook — of a Warren Buffett-type executive. In that guise, workers can make big-ticket acquisitions or finance huge expansion projects to see how they affect long-term prospects, not to mention their own livelihoods.
It’s all part of Ameren’s goal to teach employees that the daily decisions they make ultimately affect corporate value. “They can play, say, with $175 million in cash or equity,” says CFO Warner Baxter, the man who plays with the real money at Ameren. “They can use the capital in various scenarios — build a plant, make an acquisition, or invest in new equipment.” (See how Ameren measures up against its peers with CFO PeerMetrix.)
Make no mistake, Ameren is no Silicon valley startup, no hippy-dippy dot-com. This is a blue-chip utility that generated $4 billion in revenues last year. This is a company orphans and widows invest in.
And that’s exactly why the company’s senior management enthusiastically encourages employees to play “Race.” Baxter says the game lets employees see first-hand how decisions drive value in the company. Conversely, they also see how leverage can come back to bite a company, or how bad decisions can lead to bankruptcy — not an uncommon occurrence in the utility sector these days. “Fortunately,” notes Baxter, “it’s only a simulated bankruptcy when we do it.”
What’s an ROA?
Remarkably, Ameren is not alone in pushing video games on its employees. Maumee, Ohio-based Root Learning Inc., a consulting firm, has developed interactive learning programs for corporations as diverse as Allstate, Boeing, McDonald’s, and Harley-Davidson.
Executives at Root Learning claim that companies can foster positive change-management practices — if not a whole new culture — by engaging managers and employees more dynamically. “I like to think we’re a combination of McKinsey, Microsoft, and Disney,” says Root Learning’s CEO, Jim Haudan.
Root Learning employs MBAs, information technology specialists, and creative artists in creating its finance games. The idea: to illustrate complex concepts succinctly and compellingly. “Their job is to demystify the financial levers of a business,” says Haugan, “to engage people in a language that previously was understood only by elite financial types.”
Such was the case at member-owned financial cooperative Kinecta Federal Credit Union, one of the largest credit unions in the U.S with assets of $2.9 billion. Says Brian Cote, senior vice president and CFO of Manhattan Beach, California-based Kinecta: “We wanted the staff to understand the financial dynamics of this organization.”
The Kinecta finance chief says senior management at the company is always imploring workers to cut expenses, launch new sales campaigns, or otherwise jump over hurdles. Getting them to understand why they should do such things can be a tough sell. “We tell them it’s to drive capital or build ROA,” says Cote. “They nod their heads, then look at each and ask, ‘What’s an ROA?’ “
Last year, Kinecta management decided to go the joy-stick rout, purchasing a Root Learning customized board game called the Learning Map (think Monopoly). Every one of the credit union’s 500-plus employees, from front-line teller to vice president, went through the Learning Map process.
“At the end of the day we all need to understand how we fit into the financial dynamics of the organization and why we’re asked to do certain things,” says Cote. “We all do better if we know why.”
How much better? So far, the company has not developed any metric to measure results (although “hostile takeover per employee” springs to mind).
But the Kinecta numbers chief says he’s seeing tangible results. “You look at someone playing the game and suddenly see the lights go on — ‘So this is why we’re doing that.’ What they thought was so mysterious they now understand as basic business concepts.”
Ameren also deployed the Learning Map before moving on to the more viscerally gripping electronic simulation games. Matt Herzberg, director of organizational development at the company, says Ameren conducted a series of three sessions with 35 employees from various disciplines within the company. Each group started with the maps and then moved on to the simulation tool.
Herzberg says the company deliberately created the cross-sections to break down the walls in the company. Employees at Ameren tend to work in specific business lines, he notes, and the company’s management worried that their limited perspective would inhibit big-picture thinking. “We wanted them to see the company holistically,” notes Herzberg, “so they could gain a better appreciation of the issues we face together as a business.”
Several scenarios were enacted by the groups, but most centered on Ameren’s need to grow the business. “They learned, for example, that timing issues are extremely important in financing an acquisition or in relation to free cash flow,” notes CFO Baxter.
In fact, Baxter recalls a conversation he had with one of the company’s operating vice presidents after the VP played the game. “He came to me and said: ‘So this is what we have to wrestle with in trying to grow the company — things like stock price and debt-to-equity ratio — just to make sure we’re not acquired.'”
That statement impressed Baxter. So, too, has the return on the company’s investment in “Race.” While he won’t divulge the cost of the video game — it’s not a quarter, that’s for sure — Baxter says the ROI has been in the millions of dollars. “That’s based on little things here and there rolling up into big dollars,” he explains.
One of those little things, for example, is the company’s ongoing purchase of Cilcorp, a utility based in Peoria, Illinois, from AES Corp. “Now that everyone here’s on the same page,” he says, “we can execute a much smoother, less costly integration.”
Indeed, deployers of simulation games like “Race Toward Shareholder Value” insist that the videos aren’t kids’ stuff. Still, designers at Root Learning are considering adding some boffo sound effects to their games. “We’re dying to do it,” Crawford grants. “There’s lots of simulated cars and trucks driving shareholder value in the game, so we have all sorts of aural possibilities.”
Up next: “Profit Driver Gets a Flat.”