For the last nine years, Printpack has utilized Income/Outcome simulations from Andromeda Training to help its associates understand Printpack's key financial measures. Talent Management (then TODD) partnered with Corporate Finance and other divisional controllers to find this learning experience that could help associates build skills and knowledge in the Commercial Orientation competency found in all of Printpack's job families. The pilot Income/Outcome class was held in October 2000, and Andromeda certified Printpack Talent Management, Finance, and Accounting professionals to facilitate the simulation internally. Talent Management also worked with other HR and accounting field associates to deliver a similar interactive simulation, called Business Basics, to manufacturing associates.
Clearly, the Income/Outcome simulations have been successful for Printpack: It held its 50th Income/Outcome Workshop September 23 to 24 in Guadalajara. "There is no substitute for the learning process Income/Outcome provides," notes Mike Hembree, vice president of Finance and Administration, Printpack, and tenured facilitator of Income/Outcome. "While part of the process is teaching some accounting and financial concepts, the more important piece is transferring those concepts to what we do at Printpack, and, ultimately, determining how each of our individual roles impacts our corporate objectives. It's a great way to better learn what goes on in other parts of the business and gives us a much better appreciation for the importance of other functions and blending those functions into a successful team."
What else is it?
Fun: Participants compete on teams while starting up and running a manufacturing business. Teams are evaluated at the end of the simulation for which team has the greatest business value. No one knows which team will come out on top until the end—not even the facilitators.
Interactive: Teams learn the basics of a business and the rules of the game for the first six months, and then they are on their own to make decisions and compete in a competitive market.
Impactful: Participants get to touch their assets, liabilities, and expenses on the game board. They get to visually see the impact of their business decisions on the team's monthly financial statements, and they are hands-on during the entire simulation. Those financial concepts and measures then are translated into Printpack's real and current financial results. Associates gain a new way of looking at Printpack's company performance, goals, and priorities. It's a vastly different approach from the way finance is taught in school.
What do participants learn?
- The difference between cash and profit
- The meaning of fixed and variable costs
- The value of budgets (yes, budgets!) and cash flow forecasts
- The impact of inventory buildup
- The need to control working capital
- The impact of investing in new plant equipment
- The struggle of succeeding in a competitive market;
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
- EVA (Economic Value Added)
- Business Value
What Is It Like?
An ideal Income/Outcome simulation consists of 18 to 24 participants with six teams of three to four associates. Participants are grouped into teams based on their functions, so a team could consist of an associate from Sales, Manufacturing, HR, and Accounting. Having perspectives from different functions ignites powerful discussions about business decisions that a team makes and the strategy it works toward.
Three certified facilitators typically lead the session, and lots of space is needed to accommodate the dynamics of the game. Participants move around the classroom to analyze supply and demand, deliver product to customers, receive payment from customers, get loans from the bank, and have a successful presence in the marketplace.
Carmen Ortiz, operations manager in Guadalajara was a recent participant in Income/Outcome. She characterizes it as "excellent, fun, and practical," adding, "The course is easy to learn. The concepts are complex but exposed in a simple way, and they are easy to understand. I could see what was happening in other departments and outside the company. It far exceeded my expectations."
Amy Stephens is the corporate training manager at Printpack. For more information on Printpack, click here. For more information on Income/Outcome, click here.