Business Management Simulation 3: Drill and Experience

In our previous article, we presented several examples of simulations throughout human history. We defined simulation as “designing or recreating something or an event as if it were real,” in other words, a kind of “drill”. The word drill often brings to mind the military profession and warfare. Of course, there are drills conducted for other purposes as well, such as fire drill. However, in our language, this term basically has two meanings: one is “military maneuver,” and the other is “practice”.

The earliest recorded military drills in written history date back to ancient times. During the New Kingdom period of Ancient Egypt (1550–1070 BC), the Egyptian army is known to have conducted war drills along the banks of the Nile River and in desert regions. While preparing for the Battle of Kadesh against the Hittites in 1274 BC, Pharaoh Ramesses II divided his army into two forces and had them carry out opposing maneuvers. Sun Tzu (544–496 BC), in his work The Art of War, emphasized the importance of military drills and advised generals to conduct regular drills during peacetime in order to strengthen the discipline of their soldiers. Indeed, historical records show that large-scale military drills were conducted in China at various times to ensure the coordinated movement of war chariots, infantry, and archers. “States that regularly carried out war simulations for their military staffs, officers, and soldiers during peacetime were able to gain military superiority over their rivals.” That does not sound surprising at all, does it? For example, in Ancient Greece there were around 1,000 independent city-states, known as poleis, each with its own government and administration. Apart from the five or six states remembered today for their achievements in seafaring, trade, philosophy, and science, the most successful were Athens and Sparta, the leaders of the rival alliances that confronted each other during the Peloponnesian Wars. A third prominent state was Thebes, which regularly conducted military exercises and kept its army in a constant state of readiness for war. In summary, the three states that left the greatest mark on Ancient Greek history were those that practiced war simulations during peacetime. The Roman Empire also developed a highly systematic approach to military training and drills. In addition to practices similar to the Spartans’ “Agoge” training system, Roman legions participated in large-scale military exercises at certain intervals and tested “advancing in defensive formations”—such as the “Testudo” (tortoise formation used to advance without suffering casualties from enemy archers)—on the battlefield. The Mongols and the Ottomans, two powers that profoundly shaped the Middle Ages—particularly in military affairs—also conducted regular military exercises. In the Ottoman Empire, the Talimgâh of the Janissary Corps operated continuously, providing training in close combat, swordsmanship, and archery on an almost daily basis. In the early nineteenth century, military drills and war simulations became increasingly common across Europe, particularly during the era of Napoleonic France, laying the foundations for the modern military drills of today. At the beginning of the twentieth century (on December 17, 1903), the Wright brothers invented the airplane. Admittedly, the first flight lasted only 12 seconds and covered a distance of just 36 meters. Yet, when it comes to reaching distant goals and ambitious dreams, is not the most important thing simply taking the first step? Only eleven years later, in the opening days of the First World War, all the major combatant nations were using aircraft to conduct aerial reconnaissance over enemy territory. After his aircraft was shot down by German soldiers during a reconnaissance mission in early 1915, French pilot Roland Garros sought a way to fight back. He mounted a fixed machine gun on his aircraft and, on his next flight, engaged enemy aircraft, becoming the first fighter pilot in history. In the same year, the Germans improved upon Garros’ idea by equipping the machine gun with a propeller synchronization system. The Fokker Eindecker thus became the first true warplane. This development led to the emergence of aerial combat, and warplanes rapidly evolved. Within just three years, by the end of the First World War, distinct categories such as fighter aircraft, bombers, and reconnaissance planes had already been established. These rapid and striking developments did not escape the attention of the great strategist and visionary Mustafa Kemal Atatürk. On May 15, 1925, in his opening speech for the Turkish Aeronautical Association, Turkish Aeronautical Association, he stated: “The future is in the skies. Nations that cannot secure their skies can never be confident of their future.” Compared to today, the production costs of fighter and reconnaissance aircraft were not particularly high; “the real challenge was training pilots”. Before ever taking off, how could pilot candidates be trained “safely” for the maneuvers they would perform in the sky? Edwin Albert Link—a civilian pilot who, having spent his childhood in his father’s workshop where pianos and church organs were made, had a thorough understanding of how pumps, valves, and bellows worked—solved this problem with the flight simulator he developed in 1929! Thousands of units of the first aircraft simulator in history, known as the Blue Box and Link Trainer, were produced, giving rise to an industry worth billions of dollars. So much so that pilots from nearly every nation that participated in World War II received training on these entirely mechanical simulators. More than “half a million” combat pilots serving in the U.S. Air Force alone have learned to fly aircraft safely “on the ground” thanks to this flight simulator.

The rapid advancement of technology driven by states’ and nations’ efforts to gain superiority over one another naturally also influenced commercial life. The first simulation used to train managers in the business world was the “Beer Game,” a supply chain management training exercise developed in the early 1950s. This simulation was created by the Massachusetts Institute of Technology (MIT) as part of its research on system dynamics and supply chain management. Participants who took on four different roles—retailer, wholesaler, distributor, and manufacturer—developed skills in managing “demand fluctuations” and “communication gaps” throughout the supply chain. (The game is still in use today; those interested can look it up.) Another early example of simulation used for executive training in business was the “Top Management Decision Simulation,” developed in 1956 by General Electric. This application was designed as the first computer-based simulation used to teach managers strategic decision-making skills and to help them understand the financial and operational consequences of their business decisions. By pioneering the use of technology in executive training, it revolutionized the simulation of decision-making processes in corporate education programs. Many of today’s widely used enterprise resource planning (ERP) systems and business simulations were inspired by this “Top Management Decision Simulation” developed by General Electric. Today, simulation has become not merely an analytical tool, but a decision-making mechanism in its own right. Across virtually every field—from production and logistics to finance and marketing—companies test different scenarios in digital environments in order to minimize risks worth millions of dollars. For example, many globally operating manufacturers are now able to replicate entire factories in virtual environments through “digital twin” technologies. Before a new investment decision is made, even the smallest change in a production line can be evaluated in terms of its impact on cost, speed, and efficiency. This not only enables managers to make more accurate decisions, but also increases their “confidence in decision-making.” A similar transformation is even more evident in data-driven technology companies; Netflix, for instance, analyzes the viewing habits of hundreds of millions of subscribers to predict in advance which content will be successful. In fact, this is less a matter of prediction and more a vast simulation process. Similarly, Uber dynamically sets its prices by simulating supply and demand balance across cities in real time. For these companies, simulation is not a tool for understanding the past, but rather a means of shaping the present moment and the future.

One of the most important contributions of simulation can be seen in leadership development processes. Traditional training methods tell managers “what they should do,” whereas simulations provide them with the opportunity to experience the consequences of their choices. Observing the impact of a wrong decision is often the most powerful form of learning. For this reason, today many of the world’s leading companies and business schools place simulations at the center of their leadership development programs. All of these developments tell us that effective management today is no longer only about analyzing the present situation, but about designing and testing different versions of the future. The most successful managers are not those who know the single correct answer, but those who have experienced the greatest number of scenarios. In the real world, every decision carries a cost, whereas in simulations, mistakes are merely opportunities for learning. Perhaps this is why the most critical competence in modern management is not foresight itself, but the ability to systematically test foresight. Simulation offers managers precisely this opportunity: to experience the future multiple times before making a decision, to make mistakes in a risk-free environment, and, most importantly, to transform uncertainty into something manageable. As a result, simulation is no longer a “luxury” or a “high-tech toy,” but a core element of competitive advantage. In the coming years, the managers who will make a difference will not be only those who make fast decisions, but those who test their decisions most effectively. Because in business, the new rule is simple: if you want to win in real life, you must first win in simulation.