By: Fares Alzahrani, MEMP ’16
“Go Duke” were the last two words in the congratulatory email we received from the Master of Engineering Management Program director, Dr. Bradley Fox, for our selection to represent Duke University in the MEMPC PriSim Business War Games Competition. To me, his two words represented bestowed trust, serious competition ahead of us, and a request for a championship. I was honored to be part of an intellectually cooperative team representing our distinguished university in the Master of Engineering Management Consortium, which includes Northwestern, Cornell, Dartmouth, MIT, USC, Stanford, as well as Duke. We were further honored to be the first place winners in the competition. More importantly, the competition and simulation provided me invaluable lessons in applying what I have learned inside and outside the classroom.
The month-long competition consisted of 10 decision periods, each of which represented a simulated year. There were 11 teams, two of which were from Duke. Those teams were split into two automobile industries, and each team was made up of 4 students from the same MEMPC school. For more details on the competition case, visit here.
I was lucky enough to work with Saraswathi Gautham, Jun Yang, and Yijun Liu, each of whom brought outstanding intellect and personality to the team. At the beginning of the competition, we all realized two important aspects that we had to settle in order to win: team dynamics and the firm’s strategy. For team dynamics, our Management course, EGRMGMT 540, came in handy in solving two critical aspects for our success: team’s roles and responsibilities and managing conflict.
We had never worked with each other before, and given our busy schedules, there was little time to get to know each other well before we reached the performing stage. Therefore, we started sharing information about each other’s strengths and preferences on the roles to guide us during the meetings. However, in our first couple of meetings that were planned to define our team and firm, we had seemingly endless and unproductive discussions on the formulation of our firm’s strategy. We realized that our management education was useless if we could not turn around that situation and align our goals for better performance. At the end of the second 2-hour meeting, everyone at the table stated their goal for the competition, which primarily included winning and learning. Astonishingly, that short genuine discussion of our purposes and interests significantly boosted our team spirit as well as understanding and trust for each other. As a result, we were able to settle the firm’s strategy and team’s roles and responsibilities within 15 minutes.
The competition provided us an enduring and practical lesson on strategy that would have taken us 5-10 years to experience first-hand in the real world. Some of our members had taken the Competitive Strategy course, conducted various cases, and/or had practiced strategy formulation with a previous employer. We all have learned that strategy in the long run can provide powerful competitive advantage in the market place.
However, none of us had ever experienced the serious executive debates that go into approving and committing to a strategy. We had never been challenged with tough decisions that forgo market opportunities for the sake of better strategy alignment. We had never realized how powerful strategy can be in positioning our firm for long term success until we committed ourselves to test that essential strategy lesson in the simulation. The agreed-upon strategy truly served as a compass in all of our discussions and debates. Reflecting back on tough and long-debated decisions, the team is extremely happy on the outcome of those decisions that our competitors initially found strange or even stupid. The graph below shows our firm, Firm D, stock performance against the other firms in our industry:
The chart does not necessarily indicate that we had a superior strategy over other competitors, but it clearly shows that our team was focused on a strategy over the course of the competition. It demonstrates that the team made sound decisions that delivered significant value to the firm’s bottom line.
The simulation has cemented our finance and accounting lessons acquired during the fall and spring semesters as part of Duke MEMP’s core and elective courses. Those courses provided the basis for the discussion and analysis of our firm’s and competitors’ financial statements on each round. One important, yet subtle, lesson I learned during my Advanced Finance Course is that profitability and liquidity are inversely proportional to each other. This lesson allowed the team to make sound financial decisions which led to our winning the competition. Therefore, I also believe that the simulation and competition fostered our financial acumen.
Finally, I would highly encourage all MEMP students to apply for the competition next year as it was truly captivating and rewarding. There are innumerable lessons to be gained in different fields such as product development, marketing, finance, pricing, strategic thinking, and others. More importantly, I had the opportunity to try and validate hard-to-apply lessons in team dynamics and competitive strategy beyond just studying and discussing them in classroom cases.