NEWS

How did BorgWarner transform itself from debt-bound to profit-laden with ProfitAbility?

FINDING A SOLUTION
So BorgWarner engaged a consulting company to test the available educational tools. “We wanted something that was visual and understandable, something that was proven, with no real element of chance,” explains Cline, adding that the visiting trainer would naturally have to be a seasoned professional. The search company returned with its best pick: Corporate ProfitAbility®. Today, nine years later, with nearly 40 ProfitAbility® programs under its belt and more than 560 employees trained, BorgWarner is in an excellent position to offer a testimonial. “We could have bought a Monopoly board and saved a lot of money, but one of the beauties is that our lead instructor, Nigel, was one of the original developers of the game,” says Cline. “He’s excellent.”

PROFITABILITY® SOLUTIONS
Nigel Downing still attends the company’s training sessions, but he’s more of a coach than an instructor. These days the controllers of the business units lead much of the training— and they do a bang-up job. In fact, they’re required to teach up to two programs a year as part of their performance review and the company’s overall succession plan. Cline teaches one to keep fresh and to discover new ways to enhance the learning environment.

This fall the controllers and members of the HR team will sit down and map out the training calendar for 2006. So far they’ve played ProfitAbility® on three continents in four languages—English, German, Chinese, and Japanese—and interest in the simulations continues to grow. Cline figures the company spends about 15% of its annual training budget on ProfitAbility’s offerings and that his team has been “very pleased” with the return on investment. (The company’s stock price has quadrupled since they started playing. Coincidence?
Not likely.)

Corporate ProfitAbility® covers everything BorgWarner needs and then some. Employees learn how business finances really work, the importance (and cost) of cash, how strategic direction affects daily operations, and what they can do to move their numbers in the right direction. “We’ve played the standard game for about seven years, and more recently we BorgWarner-ized it,” notes Cline, explaining that the customized module teaches the company’s specific success drivers, notably economic value, which drives the bonus plan. Players learn the components of revenue and costs and what they can do to influence them. They see the difference between short-term spending and long-term investing and how to balance the two.

PROFITABILITY® BEST PRACTICES
Through years of playing the business simulation, BorgWarner has developed some best practices. The controllers discovered, for example, that they could easily run it at every organizational level, so long as players work in different units and have similar levels of financial knowledge. (It’s even easier for small and mid-size companies to stage an excellent learning environment.) The cross-business approach gets different types of people mixing it up, revving up the play, says Cline. “The simulations can get cutthroat, but people walk away with ideas they can readily take back to their jobs.”

Those take-aways are plentiful, limited only by the creativity of the instructor. At the end of sessions, the controller leads players through a few exercises—some suggested by the game’s designers, others completely homegrown. One called My Job encourages players to reflect on their game experience and brainstorm new ways they can influence economic value, the critical number. Those scribblings ultimately become personal action plans.

Teams also pick the session’s winning company—and rate the performances of the others—by investing play money in the one that created the most value in two days. “The
teams have $100 to invest in one of the other companies. They just can’t invest in their own,” explains Cline. “It’s interesting, they always seem to agree with our [the controllers’] assessment and pick the best, most valuable company we’d invest in. They’re obviously learning how to value a company as a whole, and that’s very encouraging.”