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Out of Control Exercise

The stock market rewards companies that consistently produce year to year revenue and profit increases. Conversely, it severely penalizes those companies who have erratic revenue and profit performance. As a result, there is a lot of pressure on companies to attempt to increase the predictability of the financial performance of their business units. This is usually attempted by the institution of an annual budget and financial forecast. During the planning phase of this annual exercise business units are given revenue and profit targets to achieve. This exercise simulates the behavior of business unit leaders as they attempt to meet their quarterly targets. Participants learn that the likelihood of hitting combined or overall organizational targets is reduced using the traditional target setting process. In the last phase of the exercise participants learn that open communication about where the overall goal stands increases the probability of hitting exact targets by the end of the year.

This exercise was inspired by the "Hive Mind" chapter of Kevin Kelly's breakthrough book: "Out of Control". Facilitators are encouraged to read this chapter as background for this exercise. The exercise is a little complicated to facilitate and should be practiced in advance with 6 supporters. However, the exercise is a real paradigm buster for many managers and its lessons can lead an organization to increased predictability of overall results.


Facilitator's Instructions

Purpose:

This exercise is designed to explain and teach participants that teamwork produces better results than command and control when it is important to exactly achieve a group target or goal.

Materials Needed:

  • (20) Poker Chips
  • (5) 8 1/2" x 11" pieces of cardboard
  • (1) Black magic marker
  • (1) Pad of 3"x 3" Post it Notes
  • (5) Chairs
  • (6) Participants
  • (5) 1 gallon zip lock storage bags
  • (X) any number of observers

Room Set up:

Arrange chairs in a 8'-10' semi-circle facing outward. That is, participants should be able to see the person's lab to their left or right, but not the lap of someone two people away.

Game Set-up:

Place a piece of cardboard and two (2) poker chips inside the bag and seal it. Fill each of the remaining four bags as follows:

insert 4 chips

insert 5 chips

insert 1 chip

insert 7 chips

In the two bags that have 4 chips and 7 chips, include the following note face up on top of the other materials in the bag:

Attention! Very Important!

Do this now!

As quietly and secretly as you can - remove

(1) chip and put it in your pocket or between your seat and the chair

also hide this note.

Round 1

Have 5 volunteers sit in the chairs. These will be playing the role of Account Managers. Have one participant stand to the side. This person will be the BUSINESS UNIT manager to whom the ACCOUNT MANAGERS report. Hand the BUSINESS UNIT leader his or her instructions and hand the seated ACCOUNT MANAGERS a bag of chips and in the case of the two that have the special note point to it as you hand them the bag.

Read the following instructions to the seated ACCOUNT MANAGERS:

Each of you are ACCOUNT MANAGERS who report to the BUSINESS UNIT leader standing over there (point), In a minute the BUSINESS UNIT leader will assign you targets for the coming quarter that you will need to fill from the supply of poker chips in your possession. You may not look at the supply of chips your fellow account managers are holding. You will receive your targets from your business unit leader and "when I tell you to do so", you will hand them to the BUSINESS UNIT leader.

  • You will be rewarded by your BUSINESS UNIT leader for meeting your target.
  • You will be rewarded, but less, for coming up short of your target.
  • If you exceed your target you will hurt the company. The BUSINESS UNIT leader needs each person to meet their assigned target. Exceeding the BUSINESS UNIT leader's overall target will cost us money.

Read the following instructions to the BUSINESS UNIT leader

As BUSINESS UNIT leader working together with your affinity group leader you have committed to deliver 16 chips this quarter. Your outstanding staff of account managers have a total of 17 chips in front of them. You need to tell each of them what contribution they need to make in order for you to achieve your overall goal of 16 chips. You will be rewarded for meeting your goal. You will be rewarded less, for coming up short. And you and the company will be in serious trouble if you exceed your goal.

Facilitator has the BUSINESS UNIT leader write and distribute the target for each account on post it notes.

At this point you tell the participants that the BUSINESS UNIT leader has been called away to Europe for 4 weeks and you walk the BUSINESS UNIT a short distance away and ask him or her to face away from the circle of account managers. You then enter the circle, remove 3 chips from the person with six chips and hand them to the person with 3 chips along with this note:

Important! This is a lot of extra chips! You may want to hide one of them for the next round.

Now have the BUSINESS UNIT leader return and visit each account for their contribution. Total will be 14 chips collected, 15 chips collected, if the person losing 3 chips pulls one out of their pocket. Ask the BUSINESS UNIT leader to talk with his account managers to determine why the total is short.

Expected answers are:

  • I had 3 chips taken away
  • I received extra chips.

Facilitator asks is this a realistic occurrence...where the opportunity to contribute at the end of a period may not be the same as it appeared at the beginning of the period. If an ACCOUNT MANAGER with a "secrete" chip, contributed it. Did the BUSINESS UNIT leader notice this. If not, ask him how the person with 6 chips to start could lose 3 chips and still contribute 4 chips. If the BUSINESS UNIT leader doesn't ask, the facilitator should ask the individual who had 5 chips but only contributed 3 chip why he or she did not give all 5 chips.

Expected answer is that individual didn't want to overshoot the target.

Give the BUSINESS UNIT leader 15 M&MS to distribute to the account managers as he desires. Explain the BUSINESS UNIT leader will receive his reward later. The leader will either distribute the rewards equally (3 to each) or in proportion to each person's contribution. In either case ask why he chose to do it that way. If he chose equally. Ask the person who contributed 5 how he felt get the same as everyone else. Is he as motivated as he was before.


2nd Round

Set up:

Facilitator returns each persons contribution so that chips are distributed as follows:

2 - 5 - 5 - 1 - 5 = 18 ( note: the first person with 5 chips is holding two additional in reserve.

BUSINESS UNIT leader is told that his new goal is 17 plus the 1 he was short last time so the new goal is 18.

BUSINESS UNIT leader is asked to look at the contribution opportunity of each account and to assign targets for each by writing out each target on a post it note and handing it to the ACCOUNT MANAGER.

Facilitator announces that the BUSINESS UNIT leader has been called away to Mexico - Walk the BUSINESS UNIT leader away from the group and have him face away from the ACCOUNT MANAGERS.

Facilitator enters the circle and takes one chip away from the person with 2 chips and gives it to any ACCOUNT MANAGER with 5 chips.

BUSINESS UNIT leader is brought back and makes circles the group collecting on his targets.

BUSINESS UNIT leader counts his chips and reports the result.

Answer should be 17 chips received.

Facilitator asks how this could be happening.

Teaching points.

System of rewards and instructions are not flexible enough to adjust to changing conditions. But realistically, conditions do change

Only the BUSINESS UNIT leader knew the big picture goal.

Are ACCOUNT MANAGERS always forthright about revealing the opportunities available. If not why not?

What about the person holding chips in reserve. Why did you not play them. ans. no incentive to play them. or wasn't asked to contribute them.

Facilitator gives the BUSINESS UNIT leader 15 m&m's to distribute.


Third Round

Have the account managers turn their chairs around and face inward.

In this round you will be given a group goal to achieve.

You will be rewarded based on your individual contribution and will share a group bonus only if the target is exactly met. If the groups goes over the target the company will be hurt. If the group exceeds the group target there will be no group reward. If the group under achieves the target you will receive some individual reward but no group reward.

Facilitator redistributes the chips as follows

5 - 4 - 6 - 2 - 1 = 18 (note there should still be 2 extra chips in hiding.)

Facilitator gives the BUSINESS UNIT leader a new goal of 18 and asks him to share this with the group of ACCOUNT MANAGERS

BUSINESS UNIT leader communicates new goal to the account mangers.

BUSINESS UNIT leader is called away to Japan - Facilitator walks the BUSINESS UNIT leader away.

Facilitator takes 2 chips from person with 6 chips and gives them to person with 1 chip.

The team is instructed to discuss the group goal and each persons planned contribution.

BUSINESS UNIT leader returns and accepts contributions.

Quality check did we get 18, YES

Did we meet our goal ...YES

Do we get rewarded.... YES

Facilitator gives BUSINESS UNIT leader 18 m&m's to distribute. + 5 m & m's as a group reward.

Teaching Points.

Why did this approach work better

Communication freedom

No need to hold back

Can see overall opportunity.


Directions: Print and cut the page into individual message strips to hand out during the exercise.

Attention! Very Important!

Do this now!

As quietly and secretly as you can - remove

(1) chip and put it in your pocket or between your seat and the chair

also hide this note.


Attention! Very Important!

Do this now!

As quietly and secretly as you can - remove

(1) chip and put it in your pocket or between your seat and the chair

also hide this note.



Important! This is a lot of extra chips you may want to hide one of them for the next round.